[Senate Hearing 105-393]
[From the U.S. Government Publishing Office]
[DOCID: f:39827.xxx.done]
S. Hrg. 105-393
AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR
FISCAL YEAR 1998
=======================================================================
HEARINGS
before a
SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE
ONE HUNDRED FIFTH CONGRESS
FIRST SESSION
on
H.R. 2160/S. 1033
AN ACT MAKING APPROPRIATIONS FOR AGRICULTURE, RURAL DEVELOPMENT, FOOD
AND DRUG ADMINISTRATION, AND RELATED AGENCIES PROGRAMS FOR THE FISCAL
YEAR ENDING SEPTEMBER 30, 1998, AND FOR OTHER PURPOSES
__________
Commodity Futures Trading Commission
Department of Agriculture
Farm Credit Administration
Food and Drug Administration
Nondepartmental witnesses
__________
Printed for the use of the Committee on Appropriations
Available via the World Wide Web: http://www.access.gpo.gov/congress/
senate
U.S. GOVERNMENT PRINTING OFFICE
39-827 cc WASHINGTON : 1998
_______________________________________________________________________
For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
ISBN 0-16-056316-X
COMMITTEE ON APPROPRIATIONS
TED STEVENS, Alaska, Chairman
THAD COCHRAN, Mississippi ROBERT C. BYRD, West Virginia
ARLEN SPECTER, Pennsylvania DANIEL K. INOUYE, Hawaii
PETE V. DOMENICI, New Mexico ERNEST F. HOLLINGS, South Carolina
CHRISTOPHER S. BOND, Missouri PATRICK J. LEAHY, Vermont
SLADE GORTON, Washington DALE BUMPERS, Arkansas
MITCH McCONNELL, Kentucky FRANK R. LAUTENBERG, New Jersey
CONRAD BURNS, Montana TOM HARKIN, Iowa
RICHARD C. SHELBY, Alabama BARBARA A. MIKULSKI, Maryland
JUDD GREGG, New Hampshire HARRY REID, Nevada
ROBERT F. BENNETT, Utah HERB KOHL, Wisconsin
BEN NIGHTHORSE CAMPBELL, Colorado PATTY MURRAY, Washington
LARRY CRAIG, Idaho BYRON DORGAN, North Dakota
LAUCH FAIRCLOTH, North Carolina BARBARA BOXER, California
KAY BAILEY HUTCHISON, Texas
Steven J. Cortese, Staff Director
Lisa Sutherland, Deputy Staff Director
James H. English, Minority Staff Director
------
Subcommittee on Agriculture, Rural Development, and Related Agencies
THAD COCHRAN, Mississippi, Chairman
ARLEN SPECTER, Pennsylvania DALE BUMPERS, Arkansas
CHRISTOPHER S. BOND, Missouri TOM HARKIN, Iowa
SLADE GORTON, Washington HERB KOHL, Wisconsin
MITCH McCONNELL, Kentucky ROBERT C. BYRD, West Virginia
CONRAD BURNS, Montana PATRICK J. LEAHY, Vermont
TED STEVENS, Alaska
ex officio
Professional Staff
Rebecca M. Davies
Martha Scott Poindexter
Galen Fountain (Minority)
Administrative Support
C. Rachelle Graves
C O N T E N T S
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Thursday, February 27, 1997
Page
Department of Agriculture: Office of the Secretary............... 1
Tuesday, March 4, 1997
Department of Agriculture:
Animal and Plant Health Inspection Service................... 137
Agricultural Marketing Service............................... 137
Grain Inspection, Packers and Stockyards Administration...... 137
Food Safety and Inspection Service........................... 137
Tuesday, March 11, 1997
Department of Agriculture:
Food and Consumer Service.................................... 275
Center for Nutrition Policy and Promotion.................... 275
Tuesday, March 18, 1997
Department of Agriculture: Natural Resources Conservation Service 369
Tuesday, April 8, 1997
Department of Agriculture:
Farm Service Agency.......................................... 441
Foreign Agricultural Service................................. 441
Risk Management Agency....................................... 441
Tuesday, April 15, 1997
Department of Agriculture:
Rural Utilities Service...................................... 571
Rural Housing Service........................................ 571
Rural Business-Cooperative Service........................... 571
Alternative Agricultural Research and Commercialization
Corporation................................................ 571
Tuesday, April 22, 1997
Department of Agriculture:
Agricultural Research Service................................ 661
Cooperative State Research, Education, and Extension Service. 661
Economic Research Service.................................... 661
National Agricultural Statistics Service..................... 661
Thursday, May 1, 1997
Commodity Futures Trading Commission............................. 1041
Department of Health and Human Services: Food and Drug
Administration................................................. 1065
Material Submitted by Agencies Not Appearing for Formal Hearings
Department of Agriculture:
National Appeals Division.................................... 1167
Office of the Chief Economist................................ 1169
Office of the Chief Financial Officer........................ 1176
Office of the Chief Information Officer...................... 1182
Office of Communications..................................... 1201
Office of the General Counsel................................ 1203
Office of Inspector General.................................. 1207
Office of the Secretary and Departmental Administration...... 1223
Office of Small and Disadvantaged Business Utilization....... 1228
Related agency: Farm Credit Administration....................... 1230
Nondepartmental witnesses........................................ 1235
AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR
FISCAL YEAR 1998
----------
THURSDAY, FEBRUARY 27, 1997
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:05 a.m., in room SD-124, Dirksen
Senate Office Building, Hon. Thad Cochran (chairman) presiding.
Present: Senators Cochran, Specter, Bumpers, Kohl, Byrd,
and Leahy.
DEPARTMENT OF AGRICULTURE
Office of the Secretary
STATEMENT OF DAN GLICKMAN, SECRETARY OF AGRICULTURE
ACCOMPANIED BY:
RICHARD ROMINGER, DEPUTY SECRETARY
KEITH COLLINS, CHIEF ECONOMIST
STEPHEN B. DEWHURST, BUDGET OFFICER
Opening Remarks
Senator Cochran. The meeting of our agriculture
appropriations subcommittee will come to order.
Today we are pleased to begin the first in a series of
hearings to review the President's proposed budget for the
Department of Agriculture and related agencies for fiscal year
1998. We are very pleased to begin our hearings with the
distinguished Secretary of Agriculture, the Honorable Dan
Glickman. We appreciate your presence this morning and we also
appreciate the presence of your colleagues, the Deputy
Secretary of Agriculture, Richard Rominger; the economist for
the Department, Keith Collins; along with Stephen Dewhurst,
Budget Officer for the Department.
As we all realize, this subcommittee has jurisdiction over
the activities and programs of the Department of Agriculture,
with the exception of the Forest Service. The President's
budget request for the activities under the jurisdiction of
this committee totals $51 billion for this next fiscal year.
This is a net decrease of $1 billion from the fiscal 1997
enacted level of funding.
Three-fourths of this request is for mandatory programs,
so-called because the law directs that payments be made by the
Department of Agriculture to beneficiaries of programs and for
program activities. This year's level of mandatory spending is
$1.7 billion less than it was for fiscal year 1997.
The President's proposed total discretionary appropriations
request for the Department of Agriculture is $13.2 billion,
which is an increase of about $640 million above the enacted
level for fiscal year 1997.
Mr. Secretary, we appreciate your being here to further
describe and explain the President's budget request for this
next fiscal year. We know that you have prepared a statement
for the hearing, and we encourage you to proceed to summarize
that. We will make it a part of the record in full, so we will
have an opportunity to ask you questions about it.
You may proceed.
Statement of Secretary Glickman
Secretary Glickman. Thank you very much, Senator, Senator
Kohl, Senator Byrd. It is an honor for me to be here.
You did introduce my partner, Deputy Secretary Rominger,
who is well-skilled in budget and management issues. I have two
of the finest career employees in Government with me as well,
Steve Dewhurst, our Budget Officer, who has probably been
before here more times than he would like to acknowledge, but
for many, many years, and Keith Collins, our Chief Economist,
who has also been at the Department many, many years. And they
are here to bail me out when I cannot answer your questions
very well, but they also have a good historical understanding
of our operations.
I will summarize my statement, and have my complete
statement submitted for the record.
This budget was developed under tight constraints. There
are four priorities in this budget, and I thought I would list
those and talk a little bit about them. One is expanding
economic and trade opportunities. Two is ensuring a healthy,
safe, and affordable food supply. Three is managing our natural
resources in a sensible way, recognizing that part of that
budget is within the confines of another subcommittee because
of the Forest Service. And four is reinventing Government and
saving taxpayer money.
As part of this budget, we have had to make some difficult
decisions. Some of you are probably hearing about some of those
decisions in terms of closing offices out in the country. In
some cases, those discussions are premature. But, the fact of
the matter is that we are an agency in a steep reduction mode.
And I will talk about that.
At the same time, we are also an agency in which the laws
have been changed which changed our jobs. The farm bill reduced
budgetary exposure by providing payments to farmers, which are
set by law over a 7-year period. We do not propose changing
that at all. However, that changes a lot of our job
responsibilities. In addition, implementation of the USDA
portion of welfare reform is projected to save nearly $3.5
billion this next fiscal year, and $21 billion over 5 years.
Balanced Budget Amendment
I would point out, and I mentioned this at the House
hearing yesterday, that while we are clearly doing our part, in
terms of budget reduction and staff reduction, I will indicate
some concerns about the potentially adverse effect on the
Department's clientele of an inflexible approach as part of the
balanced budget amendment. My concern is natural disasters,
which occur every year. We had them in California, we had them
in the Dakotas, and they require a great deal of expendable
resources.
I am also concerned that the amendment could result in
reductions in farm program payments under the 1996 farm bill,
as well as the Conservation Reserve Program [CRP] payments.
Another concern of mine is the rural constituency is much
smaller than the urban constituency, and that rural programs
could be particularly vulnerable when those kind of priority
decisions have to be made.
Discretionary Budget
The current request before this committee for discretionary
budget is about $13.2 billion. It is about one-half of a
billion above the level for 1997. We are also proposing
legislation which would increase user fees and limit
reimbursements to private insurance companies. With the effect
of this legislation, the discretionary budget is pretty flat,
about $12.7 billion.
I would also note that the total number of employee staff-
years associated with the budget are down substantially. We are
projecting staff-years of about 110,000 for 1998. That compares
to nearly 130,000 staff-years in 1993. We are down 20,000
staff-years in 5 years. That is as large a reduction, I
believe, as any Federal Government agency has taken. And we are
looking, based on the budget numbers, at further staff-year
reductions projected for the year 2002. And I will talk a
little bit more about that later.
1997 WIC Supplemental
Also associated with this budget, we are requesting a 1997
supplemental of $100 million for the Women, Infants, and
Children [WIC] Program, to prevent a large drop in
participation and to ensure a smooth transition between 1997
and 1998.
Let me start with the major priority areas, in terms of
economic and trade opportunity. The new farm bill brings new
challenges to American agriculture. The legislation provides
farmers the flexibility to plant for the market rather than
Government programs. This is for the major row crops. To deal
with the added risk of farming brought about by this
legislation--and there will be added risks as we have increased
price volatility already occurring in major commodities--we are
expanding crop insurance tools as part of our commitment to
maintain a safety net for producers.
Revenue Insurance Pilot Program
Last year we worked with the private insurance industry in
developing a pilot program for revenue insurance, which
protects farmers against price declines as well as production
losses. Right now, insurance, to the extent that it works,
deals with catastrophes, acts of God. We are proposing
expanding this to include price/revenue insurance. We are
proposing that this program be offered nationwide this next
year.
This will be a budget-neutral proposal and provide for a
comprehensive set of improvements in the crop insurance
programs. My statement talks a little bit about the
improvements in administration of it. But of particular
interest to the Appropriations Committee, is the proposal would
change both the amount of discretionary funds needed to operate
the program and the range of expenses that would be paid with
such funds.
Safety Net
As part of our safety net proposals, the committee should
be aware that we are requesting the authorizing committees to
give us authority to extend commodity loans beyond their 9-
month levels, in certain circumstances where there is great
price volatility, allowing for managed haying and grazing of
CRP acreage, increased planting flexibility, and providing for
flexibility in the timing of production flexibility contract
services. We are also proposing changes in the farm credit
area.
Also, to help farmers deal with the added risks of farming,
we are requesting appropriated funds to expand the collection
and dissemination of weather data for agricultural areas. We
are concerned that we need more accurate weather forecasting,
which would help producers mitigate the adverse impacts of
weather-related events.
The most recent one was the freeze in south Florida, where,
what we are seeing is that the agriculture component of the
National Weather Service is basically being reduced in terms of
the separate reporting stations and operations. We think that
we need to augment some of those in our budget as well.
On the area of farm credit, we continue to provide
essential financial support for those who cannot obtain credit
elsewhere. We are proposing these programs be funded at about a
level of $2.8 billion in loans and guarantees. Portions of both
direct and guaranteed farm operating and farm ownership loans
will be targeted to beginning and socially disadvantaged
farmers.
Socially Disadvantaged Farmers
We are also requesting that $5 million be appropriated for
fiscal year 1998 to continue the outreach program for socially
disadvantaged farmers. Only $1 million was appropriated in
1997. We have allocated a little bit extra from our fund for
rural America, but we believe it is very important to ensure
that members of these groups receive the training and
management assistance necessary to remain in farming.
In the area of trade we have had some great success. Last
year we had a record level of nearly $60 billion in exports
that we achieved. We believe trade is the ultimate safety net.
One of every two acres of production in America goes for
products that go overseas. It is critical that we continue our
trade expansion efforts.
U.S. Exports
Changes in the domestic farm programs have made America's
farmers and ranchers more dependent than ever on exports. In
addition, although many tariffs and trade barriers have been
lowered, we continually face new challenges in our efforts to
access new markets, such as phony sanitary or phytosanitary
measures that are not based on sound science, as well as,
concerns about genetically engineered products. Competition
remains keen.
Our budget proposals continue our strong commitment to
export promotion and growth. They provide a total program level
of just under $7.7 billion for the Department's international
programs. Funding for most of these programs is either
maintained at the current levels or increased.
In the case of the Export Enhancement Program, the budget
provides funding at the maximum level permitted by the 1996
farm bill.
In the area of rural development, portions of rural America
continue to face persistent poverty, lack of basic amenities,
and limited economic opportunity.
Empowerment Zones/Enterprise Initiative
The budget provides funding for several key administration
initiatives to address these problems, including the
empowerment zone/enterprise initiative, the water 2000
initiative, the President's national homeowner initiative, and
the administration's national information superhighway
initiative.
The budget provides for about $9.1 billion in loans and
grants under our rural development programs, which is about $1
billion more than can be supported with the 1997 appropriation.
This includes $1 billion for single family housing direct
loans.
Further, we are proposing that $689 million of the budget
authority for rural development, which is enough to support
about $2.5 billion in loans and grants, be provided under the
Rural Community Advancement Program [RCAP] authorized by the
new farm bill. That will give greater flexibility for the
States to set priorities and allow some limited block granting
as well.
Fund for Rural America
As most of you know, we have a Fund for Rural America,
which was established in the farm bill, which provided up to
$100 million a year in additional funding for critical rural
development and high-priority research. We are proposing a
technical correction in that bill, which we will be glad to
talk about later.
In the area of research, we are proposing $1.8 billion for
research, education, and extension. I will not go into that in
great detail, other than to say, that the priorities in that
area, including promotion of development of sustainable farming
systems, long-term global competitiveness, and new and improved
products, are all the things that will be part of that. Also,
Congress will have to reauthorize the research title of the
farm bill this year.
In 1998, we will also conduct a census of agriculture for
the first time, and thereby expand significantly its role as an
information provider. Although we were appropriated funding for
the census in 1997, the authorization legislation to transfer
the function from Commerce to USDA has not been passed. I urge
you to see if you can do that.
Marketing and Inspection
In the marketing and inspection area, we are making
excellent progress in combating many plant and animal pests and
diseases, such as brucellosis. The 1998 budget also provides
funds for pest detection activities, such as Karnal bunt, a
wheat fungus, and agricultural quarantine inspection along the
borders.
In addition, we have several proposals regarding packer
market competition and poultry industry competition and
compliance recommended by the Advisory Committee on
Agricultural Concentration. We believe very strongly that the
increased concentration in agriculture, particularly in the
livestock industry, is a threat to family farm operations. This
is an area that we are looking at very closely.
So that covers the area of economic opportunity.
Quickly, I would like to turn to the area of healthy, safe,
and affordable food supplies. Obviously, the main part of that
is completing our implementation of the Hazard Analysis and
Critical Control Point [HACCP] System, which is a performance-
based system to inspect meat and poultry. We are requesting a
current law budget of $591.2 million in that area, to inspect
meat and poultry. That is a $17.2 million increase over the
1997 level, to maintain inspection and continue making
investments in technology, training, and science.
User Fee proposal
Legislation will be proposed, I should reinforce this
because it is very controversial, to recover the direct cost of
providing inspection to slaughter plants. In-plant inspection
we are asking this to be provided for by user fees which is
estimated at $390 million in 1998. This user fee proposal
assures that the resources will be available to provide the
level of inspection necessary to meet the demand for such
services without being subject to annual budget pressures. This
action will also reduce the pressure to trade off investment
and improving inspection with the need to meet legislative
requirements for providing information.
I might also mention this little side note. Livestock is
one-half of the gross sales of American agriculture. Fifty
percent of everything we sell in American agriculture, from
farmer to rancher, through value added, is in livestock. It is
billions of dollars a year. Half of that, by the way, is in the
cattle industry.
Our point is that we have to continue to convince the
American consumers, which we have successfully done, that their
meat and poultry is safe. One outbreak of a problem causes a
great reflection of fear on the part of the consumer. We have
been lucky that we have not had the problems nor the resistance
to good science, as we have seen in other parts of the world,
particularly with Western Europe, where we saw meat consumption
in Germany fall 50 percent the month after the BSE or mad cow
incident came up, and there was not one reported case of BSE in
Germany.
We do not have it in this country. We have safe meat and
poultry. The public is convinced that we do. And we have to
make sure that we continue to fund this meat and poultry
inspection operation to continue that consumer confidence.
We worry that there may not be enough funds in the budget
without some form of user fee, but I recognize the
controversial nature of this particular proposal.
Research
As part of the President's recently announced food safety
initiative, we are also requesting $9.1 million for research,
education, and improved inspection systems, working with
cooperative research land-grant universities, tracing foodborne
illnesses. We are requesting an increase of $10.2 million be
made available to the Agricultural Marketing Service [AMS] to
administer the pesticide data program. We believe that funding
for this program within USDA is preferable to the current
funding arrangement through the Environmental Protection Agency
[EPA], because we are largely the ones involved in the issue of
application of pesticides.
Food and Nutrition
In the area of food and in the area of nutrition programs,
we are proud to say that WIC has grown to full participation,
achieving a longstanding bipartisan goal. A budget request of
$4.1 billion is proposed for 1998, to provide adequate
resources to support full funding for WIC at 7.5 million
participants. We will continue to work with the States to
improve caseload management and to operate the program within
available funds.
We have also requested $7.8 billion for the School Lunch
and Child Nutrition Programs, and we have stepped up our
nutrition education activities, designed to help schools serve
more nutritious meals and to teach children healthier eating
habits. We are also requesting $12 million for a new human
nutrition initiative in 1998, with increases each year until
the initiative reaches $53 million in the year 2002.
Virtually all the human nutrition research in Government is
conducted by the Department of Agriculture. The main centers
you may have heard of are at Tufts and at the Texas Medical
Center in Houston. But we have centers at the University of
Arkansas, where we do a lot of human nutrition research. And we
believe this is important to understand better the relationship
between diet, cognitive development, and health, particularly
for infants and children.
In the area of nutrition assistance, we are working
actively with the States to implement welfare reform. We plan
to offer modest legislative changes to the authorizing
committees to moderate the harsher aspects of welfare reform,
to provide a softer landing and extend a helping hand to anyone
able to and willing to work but unable to find a job. This
legislation would add some money to the budget, and it is
something you may want to ask me about later.
Food Rescue
I also want to call your attention to a nonbudget item, but
USDA, in the last few years, has adopted a major initiative in
the area of food rescue and gleaning. Congress passed the Bill
Emerson Good Samaritan Act this past summer, which relieves
people of liability in most cases for donating surplus food.
We estimate that, institutionally in this country, we throw
away 15 million meals a day of perfectly healthy food. And we
are trying to facilitate, through food banks and through
community operations, of not wasting good food. USDA happens to
have the only cafeteria in Government which routinely donates
our surplus food to the D.C. Central Food Kitchen.
As a result of this bill, several American companies now
donate several hundred thousand sandwiches a month into the
community food bank operation that was otherwise being thrown
away. And this is an area where Government can be a
facilitator, without costing any money. It is something that we
think is part of the community spirit of this country. The Bill
Emerson law had a lot to do with that.
Conservation
The third priority is sensible management of natural
resources. The 1996 farm bill extended the Department's
conservation responsibilities by creating new programs.
Actually, if one were to look at the 1996 farm bill, you would
say it was largely a conservation farm bill. It included a lot
of new programs.
We face a critical year in deciding the fate of 21 million
acres that are coming out of existing CRP contracts. The
revised CRP will target only our most environmentally sensitive
lands, so that we get the maximum environmental benefit for
each dollar spent. Less environmentally sensitive land, better
suited for planting crops, will be returned to production.
Using Commodity Credit Corporation [CCC] funds, our goal is
to reach and then maintain the 36 million-acre maximum
enrollment established by Congress. Although it will take us
some time to get there, this is probably the most significant
part, conservationwise, of the last farm bill.
In addition, in association with CRP, CCC funds will be
used to enroll an additional 212,000 acres into the Wetlands
Reserve Program [WRP], which would bring total enrollment to
about 655,000 acres in 1998, and reaching a goal of nearly 1
million acres by the year 2002.
Finally, we are requesting appropriated funds of $821
million for our Natural Resources Conservation Service [NRCS]
to carry out its work.
Reinvention
The final area is reinvention and saving money. USDA
continues to implement the reorganization which was authorized
by Congress in 1994. We have already consolidated agencies and
restructured the headquarters field offices. Our initial
streamlining efforts have resulted in substantial reductions in
employment, and indicate a savings of more than $4 billion by
the year 1999, and nearly $8 billion by the year 2002.
We are continuing to close and collate field offices to
streamline operations, to provide more efficient services.
Further streamlining and downsizing, as well as better
management of technology services across the Department is
underway.
USDA's total Federal and county employment in 1996 was over
16,000 below its 1993 levels. And by the year 2002, it will be
more than 26,000 below the 1993 levels. USDA's employment today
is lower than it has been at any time in the last 30 years.
When we were asked to streamline and downsize, and this of
course started before I got into this job, we are doing just
that. I also want to point out something that many of you have
told me individually. There are a lot of rumors out there about
further closings of offices. Kentucky is one State that I have
heard from a lot of folks out there. I sent a letter out,
saying that I have not approved any additional plans to close
field offices beyond the level of 2,500 field offices that we
had agreed to as part of the reorganization. We are about 2,650
now, down from about 4,300.
Senator Cochran. Mr. Secretary, since you specifically
mentioned Kentucky, I know Senator McConnell has the obligation
to chair an appropriations subcommittee at 10:30. If you would
permit me, I am going to yield time for him to ask you a
question on that.
Secretary Glickman. That is why I referred specifically to
you. Because I knew you would have an interest in this.
Senator Cochran. Senator McConnell.
FSA Field Office Closings
Senator McConnell. Thank you so much, Senator Cochran. I
really appreciate this. I will not take but a moment.
As you know, because we talked about this, the State
executive director in Kentucky is running around saying that 50
offices are going to be closed. You had told me and told
Senator Ford previously that this was a work in progress.
Secretary Glickman. That is correct.
Senator McConnell. That nobody was to make announcements
yet.
Secretary Glickman. That is correct.
Senator McConnell. This fellow seems to me to be totally
out of control. I mean Senator Ford, who is obviously not of my
party, said to the Farm Bureau just this week that he has told
you all you ought to either shut him up or fire him. And my
concern is this fellow is sort of running amok across our
State. Does he have the authority to do that?
Secretary Glickman. Let me speak to this in a little more
generic way, without talking about any individual. I have
talked to this particular gentleman, because he is not totally
out of line. He got information from the national office to
prepare projections of closings based upon a hypothetical plan.
Let me just explain it briefly.
Our goal was to get down to 2,500 offices, service centers.
These would be combined with USDA offices throughout the
country. We are close to that. The President's budget, as
proposed, has dollar numbers within the USDA request that would
require us to get down to 2,000. That is presuming that you all
adopt an appropriations bill that is compatible with his total
budget, which you may or may not do.
There was some discussion by some State executive directors
[SED] around the country, and I was aware of it, which assumed
that if we were going to go get down to 2,000 offices, that
would mean some field offices with fewer people. Therefore, you
would have to lay off more people in the process, because you
would have these offices with fewer people. So some of them, I
suppose you could call it a rump group of which I was aware,
decided to come up with an option by which we would reduce down
to a level where we could keep much more of our staff
functioning, helping people, but we would not have as many
offices. So that was the option that surfaced from the rump
group.
Now, what happened inside the Department is that the
directive went out to some of the SED's to determine how they
would handle this, ``option'' of going down to 1,500, which, by
the way, is 500 more than is proposed in the President's
budget. Once I heard about it I sent out a letter last week to
all of you which basically said there is no plan on paper to
close further offices. I happened to see a wire story about
Kentucky concerning something that the State executive director
had said. Just let me say, it has happened in other States as
well, Senator, besides Kentucky.
Senator McConnell. Mr. Secretary, I do not want to belabor
this, and I really thank Senator Cochran for giving me a couple
of minutes here. I got your letter. The point is he is still
doing that. I strongly recommend that if he does not have the
authority to be saying what he is saying, you, as his boss,
ought to tell him to quit saying it. We understand that some
offices are going to be closed. You are not going to get a
wholesale complaint from me about that. I understand the
budgetary needs. But he has been just bouncing off the walls,
running around the State. We have a turmoil, a general turmoil,
down there on this. And I really think you ought to shut him up
until you finish your work.
Secretary Glickman. Message heard.
Senator McConnell. Thank you very much, Mr. Chairman.
Senator Cochran. Thank you, Senator.
Secretary Glickman. Thank you.
Senator Cochran. Mr. Secretary, you may complete your
testimony.
Electronic Benefit Transfer Card
Secretary Glickman. Besides talking about that issue, I
want to talk a little bit about efforts in the reinvention area
to combat fraud and reinvent administrative processes. We are
working to complete the Electronic Benefit Transfer [EBT]
Program in food stamps. The debit card, we believe, will
significantly save taxpayer dollars and reduce fraud. This
program is operational in 18 States, and in development in all
other States. We are also stepping up our management and
integrity efforts in child nutrition and WIC.
In the area of single direct family housing, we have moved
to a program called dedicated loans, origination and servicing
[DLOS], which is a centralized servicing system of housing. We
expect that to save $400 million over the next 5 years, while
providing better service to our borrowers and reducing
delinquencies.
I have talked to you a little bit about the potential
impact of the budget on USDA service center locations. I know
that this creates some hardship in certain places in the
country. There is no question we are going to have to probably
continue to reduce, but I assure you that we will create no
plans on further reductions without notifying you and having
you participate in that process.
I do think, in this era of computers, fax machines, and
electronic communications, that we do not need the same field
office structure we needed in 1935. We have begun the process
of reducing it. But, above all, we have to always keep in mind
that how we serve farmers and ranchers, how we serve the people
who need our programs, is the key point in terms of that field
office structure.
Civil Rights
Finally, Mr. Chairman, I want to mention civil rights. Your
committee, last year, helped to provide some additional money
to strengthen staff resources in the area. We have many
activities underway now to reduce the embarrassing backlog of
equal employment opportunity and program discrimination
complaint cases in USDA. A few months ago, I created a civil
rights action team to do a thorough audit of USDA civil rights
issues and provide me with recommendations for improvements.
We held a series of listening sessions around the country,
to hear from employees and program participants. Deputy
Secretary Rominger and I attended most of them. I have received
a copy of this report, which we will get to you. Tomorrow I
will announce some steps that I am going to take to try to make
it clear that our Department ought to be viewed in a positive
way, not a negative way, in terms of how we treat our employees
and how we treat our customers.
In addition, I have directed the agencies that serve
farmers to establish special outreach offices in the field. I
am committed to making positive changes to USDA to ensure that
both our employees and our customers are treated fairly and
with dignity.
Finally, let me just thank you for your help. It is no
secret that our committee's budget was one of the few that
passed on time, the USDA's budget. And in some cases, we were
the only agency in Government operating when there were
shutdowns. And I would like to think it was because of the
cooperative help with which we have worked together, as well as
the bipartisan spirit in agricultural programs.
So I thank you very much, and look forward to your
questions.
Prepared Statement
Senator Cochran. Thank you very much, Mr. Secretary. We
appreciate very much your cooperation with the committee and
your helpful description of this budget request. We have your
complete statement, and it will be made part of the record.
[The statement follows:]
Prepared Statement of Dan Glickman
Mr. Chairman, Members of the Committee, it is a privilege to appear
before you to discuss the 1998 budget for the Department of Agriculture
(USDA).
I would first like to express my appreciation for the hard work of
this Committee last year that resulted in the timely enactment of the
1997 Agriculture Appropriations Act. We are grateful for your efforts.
The budget again this year was developed under very tight funding
constraints. It includes savings that are required to meet the
President's objective of balancing the budget by the year 2002 while
positively addressing strategic goals for programs that meet the needs
of people and protect the Nation's natural resources. There are four
fundamental priorities that we focused on in developing our budget
proposals for 1998. These include: expanding economic and trade
opportunities; ensuring a healthy, safe, affordable food supply;
managing our natural resources in a sensible way; and reinventing
government and saving taxpayer money.
In order to meet our budget priorities, it was necessary to make
hard decisions to restrain, reduce, and redirect spending in a number
of areas; to include some new user fee proposals; to require employment
cuts in many of our major agencies; to absorb part of the increased pay
and inflation costs; and to change the way we do business. I should
also point out that through recent changes in legislation, USDA also
contributes to balancing the budget through reductions in mandatory
spending. The Federal Agriculture Improvement and Reform Act of 1996
(the 1996 Act) reduces budgetary exposure by providing fixed and
generally declining market transition payments over a 7-year period.
Also, implementation of the USDA portion of welfare reform is projected
to save $3.4 billion in 1998 and a total of about $21 billion over 5
years.
The President's budget proposes $60.3 billion in budget authority
for 1998 for the Department of Agriculture compared to a current
estimate of $60.6 billion for 1997. The staff year level associated
with the proposed budget is also worthy of mention. USDA is ahead of
schedule in reducing employment based on the original reorganization
and streamlining plan. By the end of 1996, we reduced our total staff
years including Federal and non-Federal to 113,000--a reduction of
8,000 below our original estimate and more than 16,000 below the 1993
level of 130,000. Those reductions were primarily achieved through
normal attrition and the use of early outs and buyouts.
I would like to mention also that, while the Department and its
clientele will make the necessary sacrifices to meet the needs to
balance the budget, we believe the economy will benefit in the long
run. However, I would like to register some concern about the
potentially adverse effects on the Department's clientele of the
inflexible approach pursued in the balanced budget amendment, which
could limit our ability to respond to natural disasters, reduce food
stamp benefits in times when the need is greatest, and create intense
pressures to reduce valuable programs for our farm and rural clientele.
The request before this Committee for discretionary budget
authority is $13.2 billion. However, the budget proposed legislation in
several areas of the Department that if enacted would reduce
discretionary budget authority to $12.7 billion, the same level as
1997. The legislation includes new user fees for the Food Safety and
Inspection Service, the Agricultural Marketing Service, and the Grain
Inspection, Packers and Stockyards Administration; and legislation to
limit reimbursements paid to private insurance companies in the crop
insurance program.
Also associated with the 1998 budget, we are requesting a 1997
supplemental of $100 million for the WIC program to prevent a large
drop in participation and to ensure a smooth transition between 1997
and 1998. We are also requesting a $6.2 million supplemental for the
Nutrition Education and Training (NET) program to restore funds lost
when the Welfare Reform Act removed the direct funding mechanism of
this program, leaving it with no funds. NET provides State level
technical assistance for nutrition education throughout the Child
Nutrition Programs. The Administration's supplemental proposals are
fully offset including a rescission of $50 million in budget authority
for the Public Law 480 Title I program.
farm and foreign agricultural services
A fundamental goal of the Farm and Foreign Agricultural Services
mission area is the expansion of economic and trade opportunities to
further income growth and development throughout rural America. How we
accomplish our mission will in large part be determined by the new
policies set in place by the 1996 Act, and one of our primary tasks
this past year has been to implement the policy and program changes
provided for in the 1996 Act. As a result of our efforts, nearly 99
percent of eligible producers entered into production flexibility
contracts.
Although the 1996 Act has provided much greater flexibility to our
farmers in their production and marketing decisions, it has also
increased the risks inherent in farming by reducing the Government's
role in supporting incomes and managing supply and demand. As a
consequence, we remain concerned about the adequacy of the safety net
for our producers and have been working diligently to expand and
improve programs which help producers manage their risk.
In this regard the Committee should be aware that we will be
proposing legislation to the authorizing committees to improve the
safety net for farmers. Our legislation provides discretionary
authority to extend commodity loans, allows managed haying and grazing
of Conservation Reserve Program acreage, increases planting flexibility
and provides for flexibility in timing of production flexibility
contract payments. Legislation will also be proposed to expand revenue
insurance coverage nationwide, improve farm credit services, and make
other technical adjustments to improve farm programs.
At the same time, we will continue in our efforts to reduce
expenses, improve efficiency, and provide improved service to our
customers. A major focus of these efforts is the establishment of Field
Office Service Centers and associated steps to enhance services in the
field.
Farm Service Agency
The Farm Service Agency (FSA) administers the farm credit programs,
commodity programs, several conservation programs, and activities of
the Commodity Credit Corporation (CCC). The consolidation of staffs and
county offices under FSA continues to be a major focus of our
streamlining efforts.
FSA staffing has changed dramatically as a result of these
streamlining efforts. FSA Federal and county staffing is projected to
be down from 19,008 staff years at the end of 1996 to 17,875 staff
years at the end of 1997 as a result of buyouts, RIF's, and attrition.
The 1998 budget for FSA salaries and expenses proposes a program level
of $954.1 million, estimated to support a ceiling of 15,756 staff
years, suggesting further separations in 1998 of approximately 2,119
staff years.
Farm Credit Programs
The farm credit programs administered by FSA continue to serve as a
vital source of credit for our Nation's farmers and ranchers. Over the
last two decades or more, these programs have changed significantly.
Guarantees of loans made by private lenders now comprise the bulk of
activity. A portion of the direct loans are targeted to beginning and
socially disadvantaged farmers and ranchers, and far more attention
than in prior years is being paid to repayment ability and adequate
security.
The 1998 budget provides for a total of about $2.8 billion in farm
credit program loans and guarantees, which is about $300 million less
than the amount supported by the 1997 appropriation. Of the reduction,
approximately $200 million is related to the guarantee portion of the
farm ownership loan program. The $400 million guaranteed farm ownership
program provided for in the 1998 budget reflects the actual demand for
the program in recent years. The remaining farm ownership and operating
programs are generally funded at the 1997 supportable levels with a
modest increase for the credit sales program. In addition, the 1998
budget proposes to maintain the emergency disaster loan program at $25
million.
Commodity Credit Corporation
The Commodity Credit Corporation (CCC) programs are carried out by
a number of agencies. It is the source of funding for most of the
conservation programs administered by FSA and the Natural Resources
Conservation Service (NRCS), commodity programs administered by FSA,
and most of the export programs administered by the Foreign
Agricultural Service (FAS). The CCC is also the source of funding for
certain administrative support services associated with delivery of
these programs.
Provisions of the 1996 Act limit CCC expenditures for computer
equipment and cap reimbursements to agencies for administrative support
services at 1995 levels. These provisions impose significant
restrictions on the availability of CCC funds for transfers and
reimbursable agreements used to fund conservation technical assistance
and other support services for the conservation, commodity, and export
programs.
The request for 1998 appropriations to reimburse CCC for net
realized losses will cover the amount of the loss incurred 2 years
earlier which has not been previously reimbursed. The 1998 budget
requests $0.8 billion for the balance of 1996 losses not reimbursed
through appropriations in 1996 and 1997. Appropriations to reimburse
CCC for net realized losses incurred in 1997 will be requested in the
1999 budget.
Reflecting the pattern of outlays for the commodity programs, total
CCC outlays have declined from a peak of $26 billion in 1986 to less
than $5 billion in 1996. Including conservation programs and other
programs for which CCC funding was authorized by the 1996 Act, CCC
outlays are projected to total $7.8 billion in 1997 and $9.9 billion in
1998, and decline to about $7.6 billion by 2002.
Conservation Programs
The Conservation Reserve Program (CRP) is the major conservation
program administered by FSA. The 1996 Act reauthorized the CRP,
switched financing for the program from appropriated funds to CCC, and
set maximum enrollment at 36.4 million acres. The 1998 budget assumes a
competitive bid process will be used to enroll nearly 19 million acres
of new and expiring acres in 1997. Enrollments in subsequent years are
assumed to gradually increase total enrollment to 36.4 million acres by
2002.
The budget also reflects provisions of the 1996 Act authorizing CCC
funding for a number of new conservation programs most of which will be
administered by the NRCS in cooperation with FSA.
The Agricultural Conservation Program, the Colorado River Basin
Salinity Control Program, the Water Quality Incentives Program, and the
Great Plains Conservation Program were replaced by the Environmental
Quality Incentives Program. The Flood Risk Reduction Program provides
incentives to move farming operations from frequently flooded land, and
the Conservation Farm Option gives producers incentives to create
comprehensive farm plans. The Wildlife Habitat Incentives Program
provides cost-share assistance to landowners to implement management
practices improving wildlife habitat. The Farmland Protection Program
provides for the purchase of easements limiting nonagricultural uses on
prime and unique farmland.
The 1998 budget does not include a request for funding the
Emergency Conservation Program (ECP). Under this program, the
Department has shared the cost of carrying out practices to assist and
encourage farmers to rehabilitate farmland damaged by natural
disasters. ECP received emergency funds of $25 million in 1997. The
President's Budget, however, proposes the establishment of a new $5.8
billion contingent reserve for emergency funding requirements for
various disaster assistance needs. This fund would be available to the
President for disaster relief purposes including use in the
Department's emergency conservation activities.
CCC outlays for CRP and other conservation programs are projected
in the 1998 budget to increase from negligible levels in 1996, when
rental payments were funded through appropriations, to $1.9 billion in
1997 and to $2.2 billion in 1998.
Commodity Programs
The 1998 budget projects CCC outlays for commodity price and income
support programs administered by FSA will increase from about $5.0
billion in 1997 to $6.2 billion in 1998, and then decline again to
about $4.0 billion by 2002. These projections largely reflect the
pattern of expenditures established in the 1996 Act, with payments for
production flexibility contracts increasing between 1997 and 1998 and
declining thereafter.
The 1996 Act fundamentally restructured income support programs and
discontinued supply management programs for producers of feed grains,
wheat, upland cotton, and rice. The income support programs were
changed by replacing the deficiency payment program, which was tied to
market prices and was in place since the early 1970's, with a new
program of payments that generally are not related to current plantings
or to market prices. The 1996 Act also expands planting flexibility and
suspends the authority for the Secretary to require farmers to idle a
certain percentage of their cropland in order to be eligible for income
support payments.
Dairy policy also is changed under the 1996 Act with phaseout of
price support and consolidation of milk marketing orders. The new law
also alters the sugar and peanut programs.
These changes have diminished the traditional role of the farm
programs as a buffer against fluctuations in production and commodity
prices. Our greatest challenge from the 1996 Act is to find new ways to
help farmers thrive in an increasingly risky environment, and yet not
be involved in the micromanagement of agricultural decisions. That is
why risk management has become a top priority, and why the President
and the Department attach such importance to enactment of legislation
designed to improve the programs that help farmers better manage
production and market risk.
Risk Management Agency
The 1998 budget provides funding for the crop insurance program
administered by the Risk Management Agency (RMA) under both current law
and new legislation to be submitted to the authorizing committees to
improve the safety net for farmers by establishing a nationwide program
for revenue insurance. Revenue insurance protects producers' income
against shortfalls due to either price or yield fluctuations. Our
legislative proposal is budget neutral overall. However, it provides
for a reduction in the discretionary spending portion of program
expenses, which is likely to be of particular interest to the
Appropriations Committees.
Under current law, funding for sales commissions, which have been
treated as mandatory spending, shift to discretionary spending in 1998.
The budget provides $203 million for this expense. Further, it provides
$68 million in discretionary spending for Risk Management Agency's
(RMA) own administrative expenses. All other expenses of RMA are
treated as mandatory, although subject to appropriation, for which the
budget provides ``such sums as may be necessary.'' The 1996 Act created
RMA to administer the crop insurance program and to carry out other
risk management functions. Previously, the crop insurance program was
administered by FSA, which retains responsibility for the Noninsured
Assistance Program (NAP).
The Administration's proposal to establish a nationwide program for
revenue insurance reflects the strong demand among producers that we
have seen for new revenue insurance products such as Crop Revenue
Coverage (CRC), Income Protection (IP) and Revenue Assurance (RA).
Current law, however, limits RMA's authorities in the revenue insurance
area to pilot programs. In implementing the revenue insurance programs,
no additional premium subsidy has been paid, and the expected 1996 loss
ratio experience is within the statutory limits and comparable to RMA's
standard multi-peril production risk coverage. The only additional cost
to the Government has been a modest increase in delivery expenses,
including underwriting gain paid to the insurance companies.
To offset the additional delivery expenses and the expected growth
in market penetration involved in expanding revenue insurance
nationwide, the Administration's proposal provides for a change in the
administrative (delivery) expense reimbursements paid to private
insurance companies, as well as an incremental reduction in the loss
ratio. The Administration is proposing that the reimbursement rate for
delivery expenses be reduced from 28 percent under current law to 24.5
percent of the premium for multi-peril coverage. This reduction is
based on extensive analysis conducted by RMA and the General Accounting
Office. It will reduce discretionary spending for delivery expenses
from $203 million under current law to $149 million under the proposal.
Further, our proposal would make a portion of the overall reimbursement
rate discretionary and subject to appropriation whereas current law
treats only the sales commissions portion of the reimbursement as
discretionary. We believe this change offers insurance companies more
flexibility for adjusting to the reduced reimbursement rate.
Finally, the legislative proposal will provide more flexibility for
determining subsidy amounts and establishing pilot programs. It will
also require a processing fee for RMA's review and approval of industry
requests for new insurance products, and make certain changes in
program compliance requirements. None of these changes is expected to
have a budgetary impact.
International Trade and Export Programs
Exports of U.S. farm and food products achieved a second straight
year of robust growth in 1996 and set another record at just under $60
billion. With the strong, back-to-back gains of the last 2 years, U.S.
agricultural exports have increased by nearly $22 billion or over 50
percent since 1991. As a result, agriculture led all U.S. trade
categories as the most significant contributor to the U.S. balance of
trade and supported one million jobs both on and off the farm, one-
third of which were in our rural areas.
These strong export gains provide convincing evidence that American
agriculture is reaping the benefits of the North American Free Trade
Agreement, the Uruguay Round Agreement on Agriculture, and the more
than 200 other trade agreements the Administration has successfully
negotiated. As a result of these agreements, we now have the most open
world market of this century and enormous opportunities for additional
export growth.
Further progress on the trade front is crucial to American farmers
and ranchers. Changes in the domestic farm programs made by the 1996
Act have made U.S. producers more dependent than ever on exports to
maintain and expand their income. It is critical, therefore, that we
continue our aggressive trade promotion efforts to help U.S. producers
and exporters take full advantage of emerging export opportunities. At
the same time, we must continue to adapt and improve these efforts to
meet today's challenges and keep pace with the competition.
The 1998 budget continues the Administration's commitment to export
promotion and growth by providing a total program level of just under
$7.7 billion for the Department's international programs and
activities.
For the CCC export credit guarantee programs, the budget provides a
total program level of $5.7 billion, an increase of $200 million above
the 1997 level. The increase consists of export credit guarantees which
will be made available to emerging markets for U.S. agricultural
products. This complies with provisions of the 1996 Act which require
that $1.0 billion of export credit guarantees be made available to
emerging agricultural markets during the 1996 to 2002 period; these
guarantees will be made available in annual installments of $200
million beginning in 1998.
The budget also continues two other export credit initiatives.
Included within the overall program level for CCC export credit
guarantees are $350 million of supplier credit guarantees, an increase
of $100 million above the 1997 level. These guarantees, which were
first made available in late 1996, allow exporters of U.S. agricultural
products to obtain CCC guarantees for short-term credit extended
directly to foreign buyers. Supplier credit guarantees are expected to
be particularly useful in facilitating sales of processed and high
value products.
The budget also includes $100 million of facilities financing
guarantees, unchanged from the current estimate for 1997. Under this
initiative, CCC will provide guarantees to encourage the establishment
or improvement of agricultural related facilities and/or services to
address infrastructure barriers to increasing sales of U.S.
agricultural products in overseas markets.
The budget provides higher program levels for our two export
subsidy programs in 1998, the Export Enhancement Program (EEP) and
Dairy Export Incentive Program (DEIP). In the case of EEP, we propose
to make available $500 million, the maximum level permitted by
provisions of the 1996 Act and a $400 million increase over 1997. As
you are probably aware, EEP and DEIP program activity was reduced in
1996 as a result of world commodity supply and competitive conditions.
The higher program levels established for 1998 will allow for increased
sales under the programs in response to changed market conditions.
For the Market Access Program (MAP), formerly the Market Promotion
Program, the budget continues funding at its maximum authorized level
of $90 million. During the past year, changes have been made in MAP to
make it more targeted and more friendly to small businesses. In 1996,
56 percent of the funds for promotion of branded products was made
available to small entities, up from 41 percent in 1994, and another 20
percent was made available to farmer cooperatives. Additional program
improvements have recently been made which are designed to broaden
participation, clarify program participation criteria, strengthen
evaluation and accountability, and simplify program requirements for
participants.
For the Public Law 480 foreign food assistance programs, the budget
proposes a total program level of $990 million. This is expected to
provide for approximately 3.2 million metric tons of commodity
assistance, unchanged from the level currently estimated for 1997.
I would like to highlight one component of our Public Law 480
budget proposals in particular. It transfers the budget and
expenditures for the Title I concessional sales program from the
international affairs function to the agriculture function of the
Federal budget. This proposal is an outgrowth of recent changes in the
Title I statutory authorities which have placed a much greater emphasis
on the program's market development objectives. With these changes, the
role and importance of the Title I program in the Department's overall
long-term market development strategy has increased. Shifting Title I
to the agriculture function will allow the program to be managed and
budgeted as part of a consistent package of agricultural export
programs; all of our other export programs are presently included in
the agriculture function. I urge your favorable consideration of this
proposal.
For the Foreign Agricultural Service, which administers the
Department's important trade, export, and international cooperation
activities, the budget provides appropriated funding of $151 million,
an increase of $15 million above the 1997 level. Most of the proposed
increase will be used to help meet the costs of several FAS activities
which are currently supported with CCC funds made available to FAS
through reimbursable agreements. The budget proposes that future
funding of these activities will be included in the FAS appropriation;
with this change their funding will no longer be subject to the annual
limitation on CCC reimbursable agreements established by the 1996 Act.
These activities include the Emerging Markets Program, under which
technical assistance and training are provided to promising, overseas
growth markets where there is potential to increase U.S. exports
significantly over the long term. They also include the operating costs
of the CCC Computer Facility, which serves as the Department's
collection point for international production intelligence and crop
estimates, and for other, related FAS Information Resources Management
costs.
The budget also includes two innovative proposals to assist FAS
address variability in the annual operating costs of its overseas
offices. This variability can result from a number of factors,
including exchange rate fluctuations. The FAS budget provides an
advance appropriation of $3 million for 1999 to offset wage and price
increases that occur at its overseas posts in 1998 and that the agency
is able to document. In addition, the budget includes language that
will allow funds appropriated to FAS to be obligated over 2 years
rather than 1 year; this will allow savings that may be realized in the
cost of overseas operations to carry over for use in the following
year. These savings generally result from exchange rate gains.
rural development
Overall, the 1998 budget reflects the Administration's strong
support for ensuring that rural Americans have the ability to take
advantage of the same opportunities for economic growth that exist in
urban areas. It supports the Administration's Water 2000 initiative
which targets resources to the estimated 2.5 million rural residents
who have some of the Nation's most serious drinking water availability,
dependability, and quality problems. It continues support for direct
and guaranteed loans to help meet the Administration's National
Homeownership initiative. It provides additional support for the
Administration's National Information Superhighway initiative. It also
targets resources to those rural residents and communities most in need
of assistance through the Empowerment Zones and Enterprise Communities
(EZ/EC) initiative.
The 1998 budget provides $175 million more budget authority for
Rural Development than was provided by the 1997 appropriation. The
increase is expected to support $1 billion more in loans and grants
than is currently estimated for 1997.
The 1996 Act authorized the delivery of the Department's rural
development programs under provisions of the Rural Community
Advancement Program (RCAP). RCAP allows the Department to manage a
portion of its current array of rural development programs through an
integrated initiative that: (1) increases flexibility to more
effectively meet local needs; (2) reinvents program implementation and
increases reliance on performance measures; (3) ensures participation
in the development of State strategic plans from State and local
officials, the non-profit and private sectors, the State Rural
Development Councils, and others involved in the rural development
process; and (4) targets a portion of the rural development funding to
Native Americans. The 1998 budget fully implements RCAP, including the
creation of block grants to the States for the administration of
program activities similar to those conducted under the Department's
ongoing rural development programs.
The 1996 Act also authorized the Fund for Rural America, which made
$100 million available for rural development and research in 1997. We
are proposing a technical correction to this Act to correct a drafting
error in order to move up the release date making another $100 million
available in 1998.
Rural Utilities Service
Without the Department's rural utilities programs, much of rural
America would have been unable to obtain, at reasonable prices, basic
infrastructure such as electricity, telephone, and water and waste
disposal services. In earlier times, progress was measured in terms of
the number of farms and rural households receiving any level of
services. Today, the primary need is to assure quality infrastructure
and service at a reasonable price so that rural America can keep pace
with modern technology and clean water requirements.
The 1998 budget provides for $1.5 billion in electric and
telecommunications loans, approximately the same level as 1997. Within
the total, the 1998 budget provides for an increase of about $56
million for 5 percent electric loans, and for reductions of $56 million
in direct municipal and $35 million for 5 percent telecommunications
loans. Electric and telecommunications loans made through the Federal
Financing Bank and Treasury rate telecommunications loans would be
funded at their 1997 levels.
There would be $175 million in loans made by the Rural Telephone
Bank (RTB), the same as the 1997 level. The Administration continues to
work with the industry towards the goal of privatizing the bank on a
reasonable schedule. The equity of RTB continues to grow and by the end
of 1998 we estimate sufficient funds would be available to retire the
Government-owned stock in the bank and, thus, achieve privatization
under current law. The Administration is in the process of developing
proposed legislation to facilitate privatization.
With regard to the distance learning and medical link program, the
1998 budget includes about $21 million for grants and $150 million in
loans at the Treasury rate, which requires budget authority of $21
million for both programs. In 1997, Congress provided budget authority
of $9 million which the Department converted into a grant program of
about $7.5 million and a loan program of $150 million at the Treasury
rate. This program encompasses two of the most useful applications of
modern telecommunications--education and medical services. Applications
for this program are well in excess of current funding. The increase in
grant funding will provide vitally needed assistance to some of rural
America's most remote and poorest communities.
The water and waste disposal program is one of the Administration's
highest priorities. A program level of $809 million in loans and $484
million in grants will allow the Department to continue making
significant progress towards meeting the goals of the Administration's
Water 2000 initiative. Water 2000 targets resources to the estimated
2.5 million rural residents who have some of the Nation's most serious
drinking water availability, dependability, and quality problems--
including the estimated 400,000 rural households lacking such basic
amenities as complete plumbing.
Rural Housing Service
For rural housing, the 1998 budget supports almost 120,000 housing
units in rural America, compared to about 104,000 in 1997. It provides
for about $3.0 billion in guaranteed single family housing loans, and
$1.0 billion in direct single family housing loans. Interest rate
adjustments in 1997 reduced the direct loan program to $585 million.
Restoring the $1.0 billion program level in 1998 will require $45
million in additional budget authority. These loans go to low and very
low income families. Families with higher incomes are served through
unsubsidized guarantees of loans made by private lenders. To further
the President's National Homeownership initiative, which seeks to
increase the rate of homeownership in the U.S. to an all-time high, the
budget provides for $3.0 billion for unsubsidized guarantees of loans
made by private lenders, $300 million more than the 1997 level. The
budget includes an additional $100 million to be set aside for current
direct loan borrowers who can afford to obtain private credit for
refinancing. The budget also provides for $25 million in direct loans
for the sale of inventory property.
The rural rental housing program would be maintained at the 1997
level of about $150 million, and the budget request reflects proposed
legislation to shorten the loan terms from 50 to 30 years while
amortizing the loan over 50 years. Rental assistance payments, most of
which is needed for the renewal of expiring contracts, would be
increased from $524 million to $593 million. This amount includes $52.5
million in funding to replace expiring HUD Section 8 rental assistance
contracts with less costly RHS rental assistance. The HUD budget
request has been reduced by a corresponding amount, reflecting this
transfer of responsibilities to USDA.
Rural Business-Cooperative Service
Jobs are the cornerstone of all economic development--rural as well
as urban. The Department's role in creating jobs and improving the
infrastructure in rural areas is both financial and supportive. Despite
budgetary pressures, it is important that the job creation and
retention programs of rural development remain adequately funded.
The business and industry loan program has been expanded over
several years from a relatively modest $100 million level to about $700
million in guaranteed loans in 1997. In 1997, Congress provided for a
$50 million direct loan program to augment the guaranteed loan program.
The 1998 budget maintains the direct loan program at $50 million, the
guaranteed loan program would be funded at $611 million.
The Alternative Agricultural Research and Commercialization program
would be increased from $7 million in 1997 to $10 million in 1998. This
program in particularly useful in meeting the needs for capital to
commercialize innovative value-added products from agricultural and
forestry materials and animal by-products.
The budget also proposes a change in the method of funding for the
rural economic development loan and grant program. This program
provides financial assistance to Rural Utilities Service (RUS)
borrowers who use the funds to provide financing for business and
community development projects. In 1997, the Department used interest
generated from the voluntary cushion of credit account of RUS borrowers
to fund a $20 million grant program, and Congress appropriated funding
for a $12.8 million loan program. In 1998, the budget proposes to use
the cushion of credit account to fund both the loan and grant programs.
The budget also proposes a $2 million increase in the level of
funding for research on rural cooperatives. This increase is provided
within the salaries and expense account to fund cooperative agreements.
Finally, I would mention that about $135 million of the rural
development program funding would be targeted to EZ/EC. The EZ/EC
initiative reaches communities with the most persistent poverty and
other economic adversity, which have developed strategic plans for
development.
food, nutrition and consumer services
While USDA farm and food safety programs help ensure a safe and
affordable food supply, the nutrition programs help to ensure that food
supply is available and affordable to low-income families. The Food
Stamp, Child Nutrition, and WIC Programs are the Department's primary
vehicles for carrying out this Nation's food assistance policy. Our
goal is to help ensure that no low-income child goes to bed hungry. We
also seek funding to provide nutrition information and dietary guidance
to all Americans in our continued long-term efforts to reduce the risk
of diet-related health problems.
The Food Stamp Program is estimated to cost $25.1 billion in 1998
under current law. In addition, we are proposing a $2.5 billion
contingency fund to cover unforeseen needs. We project that some 23.4
million people will still need food stamps to maintain or improve their
nutritional status during 1998. Although this number is still high, it
is down substantially from the peak of 28 million food stamp
participants reached in March of 1994, thanks to an improving economy.
The budget also includes several proposed legislative changes to
permanent food stamp law that would add an additional $0.8 billion to
this estimate in 1998, and $3.3 billion over 5 years. We believe these
changes are necessary to moderate the harsh effects last year's Welfare
Reform Act are having on some food stamp eligibles.
The Administration's proposal would extend the time limits on
unemployed adults with no dependents from 3 months out of every 3 years
to 6 months out of every year. At the same time, stronger penalties are
proposed for individuals who refuse to accept employment, or fail to
comply with work requirements. The proposal also would provide relief
to households with high shelter costs by increasing the amount they may
deduct from their income when applying for food stamps; and it would
delay implementation of the ban on aid to legal immigrants for up to 5
months while these individuals seek naturalization. Meanwhile, we
remain committed to working with the Congress and the States to
implement the new welfare reform provisions. We are also committed to
modernizing benefit delivery via nationwide use of Electronic Benefit
Transfer; and we are continuing our efforts to root out food stamp
fraud by cracking down on retailer and participant abuses, as well as
reducing program errors causing overpayments.
For the Child Nutrition Programs, including the National School
Lunch, Breakfast, Child and Adult Care Food Program, Summer Food
Service, and Special Milk Programs, we are requesting $7.8 billion,
about $0.9 billion less than the 1997 appropriations. Our request
assumes continued full funding for all of these programs, as well as
better targeting of funds in the family day care program as required by
welfare reform. Within this budget, the funds requested to support Team
Nutrition are very important because the National School Lunch Program
touches almost all school children during the year. This program works
with schools to help them serve meals that meet the 1995 Dietary
Guidelines for Americans and to help schools teach children about
nutrition. This is a critical component of the Department's commitment
to improve the health and welfare of children by promoting food choices
for a healthy diet.
Our WIC request for 1998 of $4.1 billion, an increase of $0.4
billion above the 1997 appropriation fulfills the President's
commitment to fully fund WIC. As indicated, the Administration is also
proposing a supplemental of $100 million for WIC in 1997. Without the
supplemental many States will have to cut participation significantly
in 1997. With several new initiatives to improve program management, as
well as careful food and formula cost containment, the 1998 request
should be adequate to support all eligibles who choose to participate.
WIC eligibility is based on household income and individual nutritional
risk. With this now mature program, we will work with the States to
improve program management and operate the program within available
funds.
The budget proposes increases in several of the commodity
assistance programs. Increases for Food Distribution on Indian
Reservations and the Commodity Supplemental Food Program are necessary
to maintain program levels. Because of the large increase in mandatory
and discretionary funding for TEFAP in 1997, we believe discretionary
funding can be brought down by $45 million leaving a program that will
still total $145 million.
For the Center on Nutrition Policy and Promotion, our budget
proposes $2.5 million, an increase of $281,000 over 1997. This will
enable the Center to continue to help all Americans reduce their risk
of nutrition-related disease.
Finally, let me say just a few words about the Administration's
commitment to food recovery and our efforts to expand food recovery
through volunteerism. Food recovery allows us to share, at virtually no
cost to the taxpayer, part of the immense food resources that Americans
otherwise allow to go to waste. As the recently enacted Good Samaritan
Act demonstrates, there is widespread, bipartisan support for food
recovery. No one wants to see food go to waste. The hard part is how to
get organized to avoid the waste. Since the food is available for the
giving, new governmental organizations are not needed. Volunteerism
needs to be encouraged to identify donors, organizations that can
adequately store and transport recovered food, and organizations that
can distribute the food to needy people. While our budget does not
propose any new spending on food recovery, we are working within the
Administration on a proposal to promote food recovery through creation
of a non-governmental, charitable foundation. You will hear more about
this proposal shortly.
food safety
Last July we reached a milestone in our strategy for making
significant gains in improving the safety of America's food supply. We
published the final rule for Pathogen Reduction and Hazard Analysis and
Critical Control Point (HACCP) Systems for meat and poultry products.
This rule modernizes a 90-year-old inspection system and lays out the
Administration's commitment to ensure a healthy, safe, and affordable
food supply.
On January 27, 1997, we reached our first implementation date. All
meat and poultry establishments now have in place standard operating
procedures for sanitation to ensure they are meeting their
responsibility for maintaining sanitary conditions, thereby reducing
the potential for contamination. In addition, slaughter establishments
have begun testing carcasses for generic E. coli to ensure their
processes are under control with respect to prevention of fecal
contamination. Next January 26 the largest establishments will be
required to have the HACCP systems in place. The largest slaughter
establishments and those producing ground product will have to meet
Salmonella performance standards, thereby implementing a major portion
of the science-based inspection system. By January 25, 2000, all the
provisions of the rule will be implemented.
The final rule sets an important framework for change, but by no
means is it the culmination of our strategy. Much more needs to be done
to ensure that we can meet today's and tomorrow's food safety
challenges.
The 1998 budget proposes an increase of $17.2 million under current
law to maintain inspection and to continue making investments in
technology, training, and science. It is expected that the
implementation of the HACCP rule will generate the efficiencies
necessary to maintain the level of inspection necessary to ensure the
safety of the growing supply of meat and poultry products with the
current level of inspectors. Our 1998 budget request builds on the 1997
budget approved by Congress, which maintains a frontline workforce
capable of providing rigorous science-based inspection. Furthermore,
our budget request reflects a 1997 budget decision by the
Administration and Congress to reallocate inspection resources from
traditional in-plant settings to high risk food safety areas beyond the
confines of the plant.
As part of the President's Food Safety initiative, we are proposing
to provide HACCP training to State and local food regulatory officers
to ensure proper handling of meat and poultry products after they leave
official establishments and make their way to consumers. Under the
initiative we are also proposing to expand our work with the Centers
for Disease Control and Prevention and other public health agencies to
identify sources of foodborne illness attributable to Campylobacter.
This pathogen has been identified as a growing threat to the safety of
our food supply.
Legislation will be proposed to recover the direct cost of
providing inspection to all meat, poultry, and egg products
establishments. Under this proposal the industry will be asked to pay
for only the cost of inspection personnel. We estimate that this
proposal would generate approximately $390 million in new revenues.
Approximately $201 million in appropriated funding would be sought for
administering the program, including critical food safety initiatives,
such as establishing inspection methodology and standards,
microbiological testing, technology development, animal production food
safety, and epidemiology and emergency response functions. States
administering their own inspection programs would continue to be
reimbursed by the Federal government for up to 50 percent of the cost
of administering their programs.
This user fee proposal assures that the resources will be available
to provide the level of in-plant inspection necessary to meet the
demand for such services without being subject to annual budget
pressures. This action will also reduce the pressure to trade-off
investment in improving inspection with the need to meet legislative
requirements for providing inspection. As a greater share of agency
resources have been allocated to keep pace with the growing demand for
inspectors, investment in new inspection systems designed to increase
safety and productivity has been hampered. Separating the cost of in-
plant inspection from the cost for administering the program will
permit the agency to focus more on the investment in science and
technology to improve the effectiveness of the program. This proposal
has the benefit of providing establishments requiring an intensified
inspection presence the added incentive to improve operations in order
to avoid higher inspection fees. The proposal is expected to add less
than a half a cent per pound to the cost of meat, poultry, and egg
products.
natural resources and environment
The 1996 Act provides the necessary tools that will enable the
Department to play a major role in meeting the President's commitment
to protecting our natural resources as well as to helping foster a more
common sense approach to their overall management. The 1996 Act not
only established several new incentive-based programs including the
Environmental Quality Incentives Program (EQIP), the Wildlife Habitat
Incentive Program, and the Farmland Protection Program but it also
reauthorized and refocused two of our most successful conservation
programs ever: the Conservation Reserve Program (CRP) and the Wetlands
Reserve Program (WRP).
The funding request for the Natural Resources Conservation Service
in 1998 totals $821 million which includes $549 million for
conservation technical assistance. These funds are needed by NRCS to
maintain the viability of its base program which are those activities
that support locally led, voluntary conservation through the agency's
partnership with conservation districts. It is this base program that
also provides the foundation upon which the agency will carry out the
important new mandates called for in the 1996 Act. However, while these
new programs are now funded through CCC and are therefore considered
mandatory, their technical support is not and will impose an especially
heavy new workload on NRCS that can only be addressed with appropriated
funds. To counter the effects of this new workload and to strengthen
the agency's base program, the budget includes a $15 million increase
for geographic information systems and related technology to help in
further modernizing USDA field service centers and a $4 million
increase for training in rangeland conservation and improving
conservation district skills.
In addition to the new demands imposed by the 1996 Act, the
Department's reorganization authorized by Congress in 1994 led to
significant changes in how NRCS delivers its conservation services to
the field. The agency is now able to provide higher levels and more
valuable technical assistance to farmers and other clients with
proportionately fewer management and support staff. Field staff are
moving to service centers where farmers and government officials can
conduct their business more efficiently. Decision-making
responsibilities previously centralized in Washington are now assigned
to regional and State level officials who are in closer contact with
agency clientele. Maintaining our technical assistance workforce in the
upcoming years becomes even more critical as farmers take advantage of
increased global demand and the new program flexibility that will allow
them to farm more land more intensively.
Another high priority activity supported by this budget is the need
to target adequate levels of assistance to small and minority producers
who need help in maintaining their financial viability. A total of $5
million is being requested for the Outreach for Socially Disadvantaged
Farmers program, a program recently transferred to NRCS from FSA. This
request is $4 million over the level appropriated for this activity in
1997. To support the program in 1997, the Department has apportioned an
additional $4.5 million in funding from the Fund for Rural America.
These funds will help support our cooperative agreements with 28
entities, including 1890 land grant institutions and Native American
community colleges, through which we provide training and management
assistance to small or minority farmers and ranchers.
In the watershed planning and construction area, the Department
will continue efforts to make the best use of limited resources. Only
the most cost effective and environmentally beneficial projects will be
funded with an emphasis on nonstructural management systems. We will
also continue to closely examine approved watershed plans and de-
authorize infeasible projects in order to reduce the backlog of
unfunded work. Beginning in 1998, technical support for NRCS' watershed
planning and construction activities will come from the agency's
conservation operations program which will improve overall
administrative efficiency. Also, we will try and help sponsors with
implementation costs by allowing up to $15 million to be used to
subsidize rates of municipal loans administered by the Rural Utilities
Service.
Finally, the Department's 1998 budget continues its support of the
289 authorized Resource Conservation and Development (RC&D) areas. In
addition, an increase of $18 million is requested to fund local, non-
Federal watershed coordinators to assist in watershed planning for a
wide range of environmental purposes such as the salmon recovery
efforts in the Pacific Northwest.
research, education, and economics
The budget recommendations for the programs administered by the
Research, Education, and Economics (REE) mission area agencies reflect
the importance of investments in scientific, technological, and
economic knowledge for future performance of the agricultural sector in
the U.S. economy. Driven by publicly funded research, agricultural
productivity has grown at an annual average rate of 1.8 percent over
the past 45 years. There is a critical need to maintain the overall
level of scientific and technological expertise to support key
Departmental objectives related to expanding agricultural-based
economic and trade opportunities; ensuring a healthy, safe, and
affordable food supply; and protecting public and private natural
resources for the benefit of current and future generations.
The ability of U.S. agriculture to meet the growing worldwide
demand for food will require that the research pipeline continue to
provide knowledge which will maintain productivity growth, protect the
natural resource base, create a safer food supply, and address critical
human nutrition needs. Continued support for research and education
also will lead to a better understanding of how agricultural production
impacts the environment and how effective management practices can be
applied to avoid or mitigate harmful effects. Federal support for
research conducted in universities and private laboratories encourages
these institutions to invest in technology at levels beyond what they
would invest on their own. Publicly supported research provides the
scientific foundation for and complements much of the work carried out
in the private sector.
Current research activities will be further strengthened through
the Fund for Rural America. On January 17, 1997, the Department
announced plans to allocate $46.1 million of the $100 million fund for
research, education, and extension activities. Of this $46.1 million,
$33.3 million will fund projects that address international
competitiveness, environmental stewardship, and/or rural community
enhancement, and $12.8 million will be used to address key priorities
including livestock concentration, food safety, nutrition, food
recovery, and telecommunications. Grants will be awarded on a
competitive basis for multi-disciplinary projects.
Total funding requested for REE agencies in 1998 is $1.8 billion,
which is about the same as the 1997 appropriation. Within this total,
the Agricultural Research Service (ARS) would receive an increase of
$10 million, about 1.4 percent above the 1997 appropriation. The agency
would redirect $23 million from ongoing research projects to support
programs of high national priority.
The budget includes an increase of $12 million for a new Human
Nutrition initiative. Half of the total would support activities
carried out at ARS human nutrition research centers which examine the
impact of nutrition on health of individuals representing diverse
population groups in terms of age and ethnic background. The remainder
would fund surveys to collect data on food intake by infants and
children which will, in turn, be used by the Department and the
Environmental Protection Agency to assess pesticide residue levels and
establish tolerances in accordance with the Food Quality Protection Act
of 1996. The budget also includes a $5 million increase for Emerging
Diseases and Exotic Pests to control the spread of non-native diseases
and pests.
Both ARS and the Cooperative State Research, Education, and
Extension Service (CSREES) have important roles in the Administration's
food safety initiative. The ARS budget includes an increase of $4.1
million for pre-harvest food safety research to develop new
technologies for detection and control of pathogens and for post-
harvest intervention strategies needed to support the HACCP approach
used by the Food Safety and Inspection Service.
The CSREES components of the food safety initiative consist of: (1)
a $2 million increase for research focusing on pre-harvest issues
related to detection and control of pathogens, and post-harvest issues
related to production, processing and handling practices, and (2) an
additional $2 million for education programs related to HACCP
implementation, including compliance education, quality assurance, and
State food handler certification.
An increase of $4 million is proposed for ARS pest management
research, including support for large scale Integrated Pest Management
(IPM) projects, host-plant resistance, and for biological control of
plant pests. Other increases are proposed for preservation of plant and
microbial genetic resource collections and for development of methods
for more efficient management of grazing lands.
ARS also plays an important role in the Administration's initiative
to restore the South Florida Everglades ecosystem. The budget includes
a $2 million increase to develop mechanisms to control the spread of
invasive Melaleuca trees and to conduct research on ways to reduce the
environmental impact of agricultural production in the Everglades. An
increase of $4 million for construction of a quarantine facility to
house the study of biological control agents is also proposed.
Construction of this facility was designated by the Administration's
South Florida Ecosystem Task Force as a top priority to ensure prompt
restoration of the Everglades National Park and other fragile
ecosystems in South Florida.
The budget also includes $59.3 million for facility construction
and modernization projects. An increase of $23.4 million is proposed
for a replacement laboratory in Parlier, California, used to conduct
horticultural, irrigation, and post-harvest research. Funding in the
amount of $3.2 million is proposed for continued modernization of the
agricultural research center at Beltsville, Maryland. Other increases
provide support for Federal regional centers, including $8 million for
research carried out by the National Center for Agricultural
Utilization Research at Peoria, Illinois, and a total of $6.3 million
for modernization of the Eastern and Southern Regional Research Centers
located in Philadelphia, Pennsylvania, and New Orleans, Louisiana.
Funds are also recommended for modernization of the National
Agricultural Library at Beltsville and for the foreign animal disease
facility at Plum Island, New York. An increase is also proposed for
construction of new facilities for the European Biological Control
Laboratory at Montpellier, France. The mission of this laboratory is to
discover, research, and introduce natural enemies of domestic insect
pests and weeds.
The budget request for CSREES calls for a reduction of about $69
million, about 7.6 percent below the 1997 appropriation. Funding for
formula programs is held constant at the 1997 appropriated level. An
increase of $36 million is proposed for the National Research
Initiative (NRI), the competitive grants program which funds merit-
reviewed proposals open to participation by Federal laboratories,
public and private universities, and other research entities and
individuals. It is especially important that the Federal government
support this meritorious program which supports both fundamental and
mission-linked research. Estimated returns on research funded through
the NRI are among the highest in the portfolio of programs and this
work provides technology used by other public and private sector
researchers. The budget continues to reflect the Administration's view
that the Federal government should not be financing research projects
and facility construction activities on university campuses through the
Congressional earmarking process. Proposed reductions in these two
program areas total over $100 million.
The budget includes increases for CSREES and other participating
agencies to move forward on the IPM initiative. This initiative has the
ambitious goal of increasing the adoption of IPM practices to 75
percent of the Nation's crop acreage by the year 2000. Strategies for
IPM implementation are based on input from growers, scientists, and
other stakeholders who serve on regional and State teams and are
involved in program planning and implementation. A proposed increase of
about $13.2 million above the 1997 appropriation for IPM research and
education programs will allow us to: (1) support regional IPM
development and implementation projects, (2) fund a special grants
program devoted to pest management alternatives to replace pest control
technologies under consideration for regulatory action by the
Environmental Protection Agency (EPA), and (3) fund additional area-
wide projects by ARS. We are also requesting a $5 million increase to
support data collection activities for registration of minor-use crop
pesticides.
CSREES conducts several relatively small, but important higher
education programs to encourage both graduate and undergraduate
students to pursue careers in agricultural and food sciences. We are
seeking a small increase in support for the highly successful
Institution Challenge Grants program and continued funding for the
Graduate Fellowships Grants program. Both programs focus on recruiting
diverse and talented students and enhancing the quality of education
necessary to strengthen the Nation's scientific and professional
workforce.
Efforts are made through these programs to reach out to population
groups who are under-represented in many agriculture-related fields to
enable all young Americans to have opportunities for successful careers
in agriculture. The 1890 Capacity Building Grants program, which is
funded at the 1997 level, is the cornerstone of the Department's
successful partnership with 1890 land grant universities. In the 7
years from 1990 through 1996, over $60 million has been awarded for 305
research and training projects, each of which features an active,
cooperative relationship with one or more USDA agencies. The agency
plans to continue supporting construction, renovation, and upgrade of
facilities projects at 1890 universities. We have encouraged
Departmental agencies to build on partnership relationships with 1890
institutions to establish centers of excellence which are on-campus
entities devoted to addressing specific USDA agency tasks. The budget
also includes proposals for continued support of Hispanic-serving
institutions, and the 1994 Native American institutions.
Finally, CSREES continues to support ongoing extension projects of
high national priority and carries out education and technology
transfer activities in the areas of food nutrition and education, water
quality, and sustainable agriculture. The budget includes an increase
for the Children, Youth and Families at Risk program with a specific
amount designated for use by the 1890 institutions. A reduction of
about $19 million below the 1997 appropriated level is proposed for
several extension programs which could potentially be supported with
formula funds and State and regional resources.
The Economic Research Service (ERS) is an important source of
analytical information on food and agricultural related issues, and the
economic and social science research conducted by ERS supports better
decisionmaking in both the public and private sector. The budget
request for ERS is $54 million, which includes a modest increase to
conduct analysis focusing on the costs and benefits of resource
conserving production practices, such as IPM and conservation tillage.
This initiative supports our goal of improved harmony between
agriculture and the environment. This research would provide
information which would help producers make profitable and
environmentally conscious choices and help policymakers direct
resources to the most cost-effective conservation programs.
Like ERS, the National Agricultural Statistics Service (NASS) is
also an important source of information. The estimates and forecasts
that NASS produces are used by all participants in the agricultural
economy, and NASS has earned and maintained an unmatched reputation for
accurate, unbiased, and timely information. In addition, the
implementation of the 1996 Act has made reliable and timely information
about production, supply and prices even more critical. Within the
total budget request of $120 million for NASS, an increase of $18.5
million is requested for conducting the Census of Agriculture. The 1998
costs of the Census are higher than any year in the 5-year Census
cycle, because it is the year the Census is scheduled to be conducted.
Last year, the Census of Agriculture was transferred from the
Department of Commerce to USDA. Although USDA received funding through
appropriations for the Census in 1997, the authorization legislation to
transfer the function has not yet been passed. I urge you to support
the swift passage of this legislation.
The Census is the main source of local level data about American
agriculture, the only complete enumeration of farmers, and an important
benchmark for USDA's current program which uses statistical analysis to
produce national and State estimates. The Census of Agriculture is
taken every 5 years, and in 1998, USDA will conduct the Census for the
first time, expanding significantly its role as an information
provider. By changing the way the data are processed, NASS plans to
complete the collection and processing of the approximately 2.5 million
census report forms in 25 percent less time than the previous
agricultural census.
marketing and regulatory programs
The Marketing and Regulatory Programs contribute to increased
domestic and international marketing of U.S. agricultural products by:
(1) reducing international trade barriers and assuring that all
sanitary and phytosanitary requirements are based on sound science; (2)
protecting domestic producers from animal and plant pests and diseases;
(3) monitoring markets to assure fair trading practices; (4) promoting
competition and efficient marketing; (5) reducing the effects of
destructive wildlife; and (6) assuring the well-being of research,
exhibition and pet animals. Consumers as well as the agricultural
sector benefit from these activities.
Beneficiaries of these services already pay a large percentage of
the program costs through user fees. And, we are proposing legislation
to recover over $38 million in new user fees from those who directly
benefit from USDA services. New license fees are requested to recover
the entire cost of administering the Packers and Stockyards Act.
Expanded user fees are requested for developing grain standards, for
certain animal and plant inspection activities, and for Federal
administrative costs for operating marketing orders and agreements.
The budget includes an increase of $11 million for the Agricultural
Marketing Service (AMS). The 1998 budget includes modest increases for
expanding foreign market news reporting and expanded reporting of
livestock and poultry markets in accordance with recommendations set
forth by the Advisory Committee on Agricultural Concentration. We
expect to have a proposed rule to implement the Organic Foods
Production Act issued this year. In order to implement the program we
are requesting additional funds to accredit organic certifiers. We plan
to recover the full cost of the program through user fees. For 1997,
the Pesticide Data Program (PDP) was funded through EPA. The
Administration believes that funding for PDP within AMS is preferable
to funding the program within EPA. AMS is in a unique position to
conduct the program in cooperation with State departments of
agriculture. It has the agricultural marketing expertise to develop a
statistically reliable testing system.
For the Animal and Plant Health Inspection Service (APHIS), the
current law budget contains a $6 million reduction below the 1997
current estimate. This reduction reflects program successes in many
pest and disease management programs such as the eradication of
brucellosis. It assumes increased cost sharing from beneficiaries of
Animal Damage Control activities and from cotton producers for
eradicating boll weevil. It maintains funding for our important data
gathering and risk analysis used in negotiations concerning sanitary
and phytosanitary trade barriers and restrictions on genetically
engineered products entering world markets. Funding increases are
provided for Pest Detection activities such as Karnal bunt and
Agricultural Quarantine Inspection at the borders. Finally, this budget
proposes to fund architectural and engineering work for a sterile
screwworm rearing facility to be built in Panama.
The current law budget proposes $2.6 million of increased funding
to strengthen the Packers and Stockyards programs of the Grain
Inspection, Packers and Stockyards Administration (GIPSA). The
increased funding will enable GIPSA to address more of the
recommendations of the Advisory Committee on Agricultural
Concentration. Specifically the agency would: (1) hire additional staff
to monitor and analyze packer market competition and implications of
structural changes and behavioral practices in the meat packing
industry; (2) expand poultry compliance activities; and (3) install
electronic filing equipment to reduce financial reporting costs for
stockyard owners and packing house operators. Legislation is proposed
to authorize a dealer trust similar to that of the existing packer
trust. Dealers would be required to establish a trust covering the
value of livestock inventory and accounts receivable due from the sale
of livestock. This proposed trust would be a valuable tool in assisting
the recovery of payments for unpaid sellers.
departmental management activities
Reinventing government and reducing costs is one of my major goals
for the Department. A great deal has been accomplished already. The
Department's reorganization reduced the number of agencies from 43 to
30 and over 13,500 staff years have been eliminated. As a result of
these changes and further downsizing, savings of more than $4.0 billion
are projected by 1999 and $8.0 billion by 2002. Further streamlining
and downsizing as well as technological, financial, and administrative
improvements are underway and will continue.
Also currently underway in the Department is the implementation of
the Government Performance and Results Act of 1993 (GPRA). The agencies
and mission areas are in the process of preparing 5-year strategic
plans, and a Departmentwide strategic plan is currently in draft form.
USDA plans to begin consultations with Congress after the
Departmentwide plan is completed and reviewed by OMB. In addition, the
explanatory notes for the fiscal year 1998 budget include the mission
statements and goals for each agency, as well as performance measures.
Currently we are working to refine these performance measures and to
develop annual performance plans for next year's budget. A great deal
of time and effort has been spent on implementing GPRA, and the process
is helping us improve program effectiveness, service quality, and
customer satisfaction. We look forward to working with Congress to
fully implement GPRA.
In light of existing and proposed reductions of staff and funding
for the Farm Service Agency and other county-based agencies we have an
urgent need to determine ways to increase efficiency and improve
coordination. Therefore, the Department will study the administrative
and other functions of the county-based agencies and will re-examine
our plans for county office based service centers to identify and
examine opportunities for further streamlining of program delivery and
administrative support for these agencies.
Several offices are responsible for Departmental management
activities. These offices provide leadership and administrative support
to USDA agencies and coordinate many of the reinvention efforts in the
Department. The 1998 budget provides the resources necessary for these
offices to enhance their leadership, coordination, and support
activities and as a result, improve the overall delivery of the
Department's programs and services.
One of my priorities is to reduce the existing backlog of equal
employment opportunity and program discrimination complaint cases in
the Department and to improve the systems in place to ensure that the
same situation does not recur in the future. In 1997, the Congress
increased funding in this area to enable the Department to reduce the
backlog and we are working to accomplish that goal. This funding level
is maintained in the 1998 budget request to continue these activities.
In addition, I have created a civil rights action team to do a thorough
audit of USDA civil rights issues and provide me with recommendations
for improvement, directed agencies that serve farmers to establish
special outreach offices in the field, and personally attended a number
of listening sessions across the country to hear the concerns of
employees and program participants. I am committed to making positive
changes at USDA to ensure that both our employees and customers are
treated fairly and with dignity.
As required by the Clinger-Cohen Act of 1996, USDA has established
an Office of the Chief Information Officer (CIO) to oversee the
management of the Department's information technology (IT) resources.
This request includes an increase to fully fund the CIO's immediate
office. We are funding these activities within available resources this
year. However, in order to provide adequate resources to improve the
planning, acquisition and management of USDA's IT resources, we believe
these funds are necessary to strengthen the CIO's office.
This request includes funds to continue the implementation of the
Strategic Space Plan for the Washington Metropolitan area. This plan
has been tailored to meet the needs of USDA based on the projected
reductions in staff at the Washington Headquarters and to provide a
safe efficient work place for our employees. The Beltsville Office
Facility is scheduled to be completed by December 1997 and should be
ready for occupancy by January 1998. This proposal includes an increase
to provide necessary operations and maintenance for the new facility. A
contract for the overall concept design of the South Building
renovation and specific design for the first phase of construction was
awarded in January 1997. We expect to award the contract for the first
phase of construction in September 1997. The funds included in this
request will be used to continue the renovation effort.
The budget proposes an increase for the central hazardous waste
management account. These funds are used to meet requirements of the
Comprehensive Environmental Response, Compensation, and Liability Act
and the Resource Conservation and Recovery Act. The additional funds
will be used to be more aggressive in our efforts to cleanup sites that
have been previously identified. Specifically, we will target those
projects with the highest risk to public safety and those with overdue
compliance deadlines.
An increase is proposed for the Office of the Chief Economist (OCE)
for agricultural weather-related services. OCE is responsible for
weather monitoring and agriculture related weather analysis and houses
the Joint Agricultural Weather Facility, co-staffed by USDA and the
Department of Commerce. The funding would provide USDA with the
capability to coordinate, implement, and utilize a national
agricultural weather and climate data system to expedite decisions at
the Federal level affecting agricultural commodity trade and markets,
fire weather management and ecosystem conservation. For example, lack
of observational data in agricultural areas and a breakdown in the
dissemination of forecasts played a significant role in the destruction
caused by the recent Florida freeze. The proposed increase would expand
the collection of weather and climate data in agricultural areas and
result in improved dissemination of observations and forecasts to
producers. This would help producers mitigate the adverse impact of
weather-related events. In addition, the National Weather Service (NWS)
has recently undergone a major restructuring and modernization
initiative. Funding is proposed to provide for compatible technology to
allow the Department to continue to directly access the NWS data needed
to carry out its weather and crop surveillance mission.
Funding is also included for the Commission on 21st Century
Production Agriculture. This Commission, established by the 1996 Act,
will produce two studies. The first study, due June 1, 1998, will be a
comprehensive review of changes in the condition of production
agriculture in the U.S. since the date the 1996 Act was enacted and the
extent to which the changes are the result of this Act. The second
study, due January 1, 2001, will be a comprehensive review of the
future of production agriculture in the U.S. and the appropriate role
of the Federal government in support of production agriculture. The
Commission will be made up of eleven members, selected by the President
and the House and Senate Agriculture Committees, who are to be
appointed by October 1, 1997.
An increase is proposed to provide the National Appeals Division
(NAD) with adequate resources to fulfill its statutory requirements and
ensure fair and equitable treatment for USDA program participants. NAD
was established to provide an impartial appeals process for adverse
program decisions. Financial constraints in fiscal year 1996 as well as
reduced funding in 1997 have impeded NAD's ability to obtain needed
automated information systems and provide employees with necessary
training.
An increase is proposed for the Office of the Inspector General.
These funds will be used to enhance the audit and investigative
functions of the office by providing funds for additional FERS costs
for investigators, additional training, ADP and personnel support. This
will support the Department's overall goal of improving the way USDA
works.
The Office of the General Counsel (OGC) provides critical legal
support and advice to the Department and its agencies. Recent budget
austerity has eroded OGC's resources. An increase necessary to maintain
appropriate staffing levels is proposed. This will enable OGC to handle
more effectively the expanding number of legal issues confronting the
Department, especially those related to trade, food safety, welfare
reform, civil rights and the management of the National Forests.
Although the Department has made significant progress in
implementing the Chief Financial Officers Act (the CFO Act), much work
still needs to be done. An increase is proposed to provide the Office
of the Chief Financial Officer with additional resources to facilitate
the full implementation of the CFO Act in the Department.
Finally, the budget includes a small increase for the Office of
Communications (OC) to conduct an outreach program to bring information
about USDA programs to underserved groups through various media
sources.
That concludes my statement. I am looking forward to working with
the Committee in the months ahead in reviewing these budget proposals
as we work to meet our common objectives of serving our customers and
controlling Federal spending.
New Subcommittee Member
Senator Cochran. I am very pleased we have such good
attendance at our subcommittee this morning. I am going to
defer my questions until other members of the subcommittee have
had an opportunity to make comments or ask you questions about
the budget request. I have to be here this entire hearing. None
of them is required to be. So, I am going to defer my
questions, and will be happy to do that.
The distinguished ranking member of this subcommittee is
the Senator from Arkansas, Senator Bumpers. I want you to know,
though, that the former chairman of this committee was the
first Senator here at this hearing, and I was going to call on
him, assuming you were going to be here as promptly as he was.
Senator Bumpers. I have never crossed him one time in my
life. [Laughter.]
Senator Cochran. Senator Byrd is not only a new member of
the subcommittee, but he is also a prompt member of the
subcommittee, and we want to welcome him. We certainly
appreciate his presence and his participation in the work of
this subcommittee.
If you have no objection, I would call on him.
Senator Bumpers. No objection, Mr. Chairman.
Senator Cochran. Senator Byrd.
Senator Byrd. Mr. Chairman, as one who believes strongly in
the rules with respect to seniority, I am going to say thank
you for your deference, your kind deferential treatment, and
also a thank you to Senator Bumpers. But I will not run afoul
of the rules of seniority. I am going to stay around a while,
and I am going to be listening with interest to Senator Bumpers
and others who have seniority over me. And I will wait until my
turn to make any further comments.
Thank you very much.
Senator Cochran. Thank you, Senator Byrd.
Senator Bumpers.
Prepared Statement
Senator Bumpers. Mr. Chairman, first of all, I ask
unanimous consent my opening statement be inserted in the
record.
Senator Cochran. Without objection, so ordered.
[The statement follows:]
Prepared Statement of Senator Bumpers
I want to welcome Secretary Glickman, Secretary Rominger,
Mr. Collins and Mr. Dewhurst to our subcommittee and I look
forward to their statements. I also want to express an
additional welcome to our new subcommittee members, Senator
Byrd and Senator Leahy. The experience and expertise they bring
will be most helpful as we work through the budget difficulties
posed by the challenges of increasing demands and declining
resources.
Secretary Glickman, by all measures and various reports,
the optimism we expressed upon your confirmation as Secretary
appear to have been understatements. These have, indeed, been
trying times for rural America and for the many men and women
who serve at the Department of Agriculture. In spite of the
multitude of difficulties you and all of us have faced, you
have exhibited unfailing leadership and confidence in executing
your duties as Secretary. You have reminded us all that, as
President Lincoln declared, USDA is the ``Department of the
People'' and one in which all the people may feel served.
Speaking on behalf of the entire subcommittee, I want to thank
you for your untiring work and for the accomplishments you have
achieved.
To examine the many facets of the Department of Agriculture
is to touch upon many of the vital and most basic of services
the federal government can provide the American people and, in
fact, the people of the world. Few Departments of the federal
government can lay claim to the variety of activities that fall
under your jurisdiction. Food security and food safety, basic
and applied research, natural resources, housing, rural
utilities, international trade, and contributions to easing
world hunger are all your responsibility.
Above all this, you have the task of educating an ever
increasing urban population that the Department of Agriculture
is more than a Department of Farmers and, at the same time,
remember that without a strong base of agricultural production
on the farm, we would all become a nation enslaved by the
productive capabilities of our international friends and
adversaries. It is a daunting responsibility.
Poultry production and processing is vitally important to
the economy of my state. Just one year ago, we were faced with
a threat of sanctions by the former Soviet Union that would
have deprived us of valuable markets. You went to work, along
with other members of the Administration, and overcame that
threat. It is now reported that U.S. poultry exports into that
country are proceeding without objection. Your actions not only
served to protect the jobs of many men and women in Arkansas
and other states, they also ensured the availability of high
quality products to the Russian people and maintained our
nation's position as a strong player in world markets.
Also, one year ago, you were presented the task of
implementing a new farm bill, one much different than any farm
bill administered by any of your predecessors in recent
history. I won't belabor you and my colleagues with another
rendition of my view of that legislation, but it presents you,
and all of us, tremendous challenges in Departmental management
and long term protection for the men and women on the farm who
face daily threats of weather, pests, markets, and a host of
other factors far beyond their control. Their livelihoods are
on the line, and that line will become more and more tenuous in
the days that are sure to come when farm prices tumble without
a viable safety net to see them through. If farm security in
the form of income and price support is a thing of the past,
then it must be replaced by a security in the form of increased
research, market development, and risk management. We have a
long way to go and, perhaps, not long to get there.
The Department of Agriculture was created during a period
of our history immersed in deep conflict and prone to intense
introspection. One hundred years later, the Department had
grown into a massive network connecting all parts of the
nation, at the local level, where service delivery to a still
largely rural population was the touchstone of efficiency. Now,
introspection is renewed and your unenviable task is to
revitalize a new touchstone of efficiency with a minimum of
conflict. Modern communication, transportation, and other
technologies have changed the face of service delivery
challenges as much as similar changes have altered the face of
agricultural production itself.
Still, we must remember that quality service must be
maintained and common sense approaches must be evaluated before
disruptive changes are thrust upon an unwary rural population.
Your action of recent days to calm the concerns of USDA and
county employees that sudden and arbitrary changes will not
occur will prove to benefit us all. However the face of
agriculture may appear in the 21st Century, we must ensure a
legacy adequate to meet the demands of farmers, ranchers, and
the ultimate consumers of their products. At this juncture of
another agricultural revolution, one born of innovative
research, environmental protection, and a global marketplace,
history would not judge well any imprudent dismantling of the
very means by which we have become the envy of the world.
As we turn to the task immediately before us, I am sure
that there will be some areas in which we will find
disagreement. But on the whole, I feel that we all want to meet
at the same destination. We must allow our farmers the tools
necessary to feed an ever hungry nation and world. We can't
allow the strongest nation on earth to be home to an
undernourished and under served population. Our food must be
safe and our science sound. Our nation is and has always been
blessed with the inventive genius to take us into the next
highest plain of achievement. The tools are before us, all of
us, and our charge is to manage them wisely.
Research on Genetic Engineering
Senator Bumpers. Second, I only have a couple of questions
of the Secretary.
And the first one, Mr. Secretary, is: Does the Department
of Agriculture have any ongoing research on genetic
engineering, such as we have just seen come out of Scotland?
Secretary Glickman. I am confident that we have a lot of
biotechnology research going on. And much of that is related to
genetic modifications. But I am not aware of any cloning
research. I know that there obviously has been over the years
embryonic research in terms of the development of stronger
animals and more disease-resistant animals. We do genomapping
for livestock. We are not doing the research to produce cloned
animals.
Senator Bumpers. Is genomapping similar to the Human Genome
Project that we have at NIH?
Secretary Glickman. I think so, yes.
User Fee Proposal
Senator Bumpers. Second, Mr. Secretary, the fees that you
have mentioned for the Food Service and Inspection Service, I
think you told me in the office the other day that the fee is
$590 million--is that what you are asking for?
Secretary Glickman. Well, $390 million in fees, which is
about 70 percent of FSIS's total budget. The rest of it would
be under our budget through the general nonfee dollars.
Senator Bumpers. So you are asking $390 million?
Secretary Glickman. $390 million in fees, which is in-plant
inspection and the other 30 percent is for research and
supervision and overhead and a lot of the other functions of
that part of the Department.
Senator Bumpers. I think you told me in the office the
other day that represents roughly one-half cent a pound?
Secretary Glickman. If the full $390 million were paid for
by in-plant fees, we estimate about one-half cent a pound is
what that would cost.
Senator Bumpers. Of both meat and poultry?
Secretary Glickman. That is correct.
Senator Bumpers. Would you anticipate that that would be
passed on to the consumers in higher prices for the goods and
products?
Secretary Glickman. I would honestly say that I would
expect much of it to be passed on. I cannot tell you what the
competitive conditions are out there. But we want to see the
meat and poultry inspection program adequately financed. If we
can figure out another way to do it without the fees, obviously
we would. We are not hung up on the fees, but my concern is,
given the tightness of the budget, that the integrity and
safety of the meat and poultry supply is paramount. That is why
we thought, if we cannot find it somewhere, then we have got to
go with the fees.
HACCP
Senator Bumpers. Is the so-called HACCP, which is an
acronym, H-A-C-C-P. How far along are we on that inspection
program in the meat and poultry business?
Secretary Glickman. Well, our final rules were approved
this past summer. We are starting with E. coli testing which
just began. There is a whole process to go through. But this
process will take about 3 years to complete.
A lot of the plants, larger plants, particularly, are
already operating with HACCP right now. It is the medium-sized
and smaller plants that will take a little longer to complete.
But, I would say about 3 years.
Right now, at the end of this fiscal year, we estimate that
about 75 percent of the pounds slaughtered, both meat and
poultry, will be under the HACCP inspection system. And in
fiscal year 1999, it is going to be 95 percent. In the year
2000, it will be complete.
Senator Bumpers. Can you tell us what magnitude of
improvement that is over the present system? For example, take
the poultry industry, which, as you know, is extremely
important in my State. What percentage of the poultry that
comes off the assembly line has any kind of bacteria on it, do
you know, under the present inspection system?
Secretary Glickman. In the case of poultry, it is probably
higher than in the case of beef, just because of the nature of
how chickens are produced.
Senator Bumpers. Really, the question----
Secretary Glickman. Yes; just because there may be a higher
incidence of some bacteria does not necessarily mean that the
product is not clean or safe or that any problem cannot be
eliminated when the product is cooked.
Senator Bumpers. I am saying so far as the inspection is
concerned, I am on your team. Of course, I have always
maintained that nobody stands to benefit more from a perfect
inspection system than the industry itself. Because every time
there is any kind of an outbreak, they suffer in sales and
revenues.
All I was trying to do was to ask you if you knew, for
example, if 30 to 60 percent of the poultry today has some E.
coli or something else on it? My question is, Would that be
reduced to 10 percent under the new inspection system?
Secretary Glickman. It would be reduced. I cannot tell you
what levels. I would have to get you that information. But the
reductions in levels of Salmonella and other pathogens would be
reduced. In fact, most of the companies who are doing it now
agree that the system provides a better method to test at
various points of the slaughter process, so that inspection
would not just be by sight. You would be able to test for the
pathogens at various points. So there is a quantifiable
improvement expected.
Senator Bumpers. Mr. Dewhurst, did you have a comment on
that?
Mr. Dewhurst. I was just thinking, we did publish an impact
statement when we put out the final rule on HACCP, and it has
some estimates in it. I just do not remember what those were.
But we'll give you all that information.
[The information follows:]
Economic Impact Analysis
The Food Safety and Inspection Service has determined that the
implementation of Hazard Analysis and Critical Control Point (HACCP)
systems with pathogen reduction performance standards in meat and
poultry plants will substantially reduce the incidence of pathogens
that can cause foodborne illness.
FSIS conducted a final Regulatory Impact Analysis on implementation
of the new HACCP-based regulatory program for inspected establishments.
The regulatory impact analysis concluded that the final rule has
potential annual public health benefits of $990 million to $3.7 billion
because of reduced foodborne illness costs such as medical care and
lost worktime.
FSIS is publishing the final Regulatory Impact Analysis along with
the final rule.
Over a four-year period, the estimated cost to the meat and poultry
industry for developing, implementing and operating the proposed
pathogen reduction and HACCP systems is estimated at $305 to $357
million, averaging $76 to $89 million per year, or slightly more than
one-tenth of a cent per pound of meat and poultry.
This is significantly lower than the annual estimated cost of
implementing the proposed rule, which was about $244.5 million per
year, or slightly more than \2/10\ of a cent per pound of meat and
poultry.
The recurring cost after full implementation of the pathogen
reduction and HACCP systems is estimated at $99.6 to $119.8 million per
year.
The rule has been developed to minimize the economic impact on
small and very small plants. Small plants are those with 500 or fewer
employees, the Small Business Administration's size standard for small
meat and poultry manufacturing establishments. In addition, FSIS has
designated establishments ``very small'' if they have fewer than 10
employees or annual sales of less than $2.5 million.
Of the 6,200 USDA-inspected slaughter, processing, and combination
slaughter and processing plants, over 2,900 (or 48 percent) are
considered small plants and another 2,900 are considered very small
plants.
The nearly 2,900 state-inspected plants--all assumed to be very
small plants--will also be required to implement the pathogen reduction
and HACCP requirements.
FSIS is allowing small and very small federal and state plants
additional time to meet the new HACCP requirement and the Salmonella
performance standard, thus minimizing the economic burden. Small plants
have 30 months to implement HACCP systems and meet pathogen reduction
performance standards. Very small plants have 42 months. All plants,
regardless of size, will implement sanitation standard operating
procedures and E. coli testing requirements at the same time, six
months after publication of the final rule.
The frequency of mandatory microbial testing by slaughter plants
for generic E. coli will be based on production volume. Slaughter
establishments with lower production volume will have reduced sampling
requirements, thereby reducing the burden on small businesses.
Of the 2,700 federal and state slaughter facilities, over 78
percent (the small and very small plants) will be required to conduct
E. coli testing for only a specific period each year as long as they
can demonstrate compliance with the established criteria. This will
further reduce the burden for smaller slaughter operations.
Plants that now have good processing controls are expected to have
relatively few implementation costs to comply with the proposal. Plants
with little or no process controls would need to invest more to comply.
Honey Program
Senator Bumpers. Mr. Chairman, I had three or four other
questions. I just want to close with this one question. When I
was running for reelection in 1992, I was in Hot Springs, and I
went to the courthouse. And there was a long line--I would say
a 200-yard line--of people who were waiting for absentee
ballots. So I started shaking hands. [Laughter.]
And I got down about halfway through that line, and this
young couple there--this very attractive young woman, about 30
years old, said, Senator Bumpers, I just want to know one
thing: How do you stand on the honey program? Now, Arkansas is
not noted as a honey-producing State, and I thought that was a
really strange question. That was her only concern.
And obviously she had either heard Rush Limbaugh or some
other news program, news magazine, talking about what a rip-off
the honey system was, which I think at that time was costing us
roughly $30 million a year. Does that sound about right, Mr.
Dewhurst?
Mr. Dewhurst. Yes, sir.
Senator Bumpers. So I tried to get her the best information
I had about the importance of the honey program. And she said,
well, I can see I am not going to be able to vote for you. Now,
I think--I am not sure, and I had not researched it--I think I
may have voted 4 years later to eliminate that program.
And I want to publicly apologize for having done so,
because I think it was a mistake, and I said it on the floor at
the time, that oftentimes these programs that are targeted by
the news magazines or the talk show hosts about how your money
is spent--that ABC program, periodically, you know, ``It is
Your Money, Your Choice,'' or some such thing as that--they can
make those programs look terrible. But the truth of the matter
is, bees pollinate 25 percent of all the crops in this country.
And I am told that this is becoming a very critical problem.
I am also told by beekeepers that the number of beekeepers
in this country is declining dramatically. In my home county, 5
years ago, we had nine; now we have one. And in New England,
where they use a lot of honey hives to pollinate crops, they
cannot get them anymore at any price. And when I think about
the possible loss of $5 billion in agricultural products to
save $30 million, that is not a good deal for the taxpayers or
us or anybody else.
And I wanted to ask you if you can tell me if you have done
any studies as to what the impact of eliminating the honey
program has been?
Secretary Glickman. Well, first of all, let me say,
Senator, that I voted the same way as you did. I also have
qualms about the impact on pollination and protection of the
development of basic species of plants because of it.
Our research people are looking at it right now. I am not
in a position to tell you whether we are going to recommend
reestablishing a program at this stage. But there are real
worries out there about this.
Senator Bumpers. Mr. Secretary, our beekeepers cannot
compete with Romania and South American countries, where most
of our honey is coming from today. So I am simply saying I hope
you will look very seriously at this, because I think it may
turn out to be one of the most beneficial programs for the
money in our whole Agriculture Department.
Secretary Glickman. Our Agricultural Research Service is
looking at that. There is a parasite that is killing bees out
there as well, which is compounding the problem.
Senator Bumpers. Yes; they tell me--for example, I have a
good friend who is a beekeeper in my hometown. He had nine
hives. He is down to three. And he says the life of those hives
used to be 3 years and now it is down to about 1\1/2\ years.
Secretary Glickman. I remember this debate on the House
floor. And there was an extraordinarily eloquent Congressman
who has since passed away, named Silvio Conte. And he was a
wonderful man. And he made a rhetorical career out of this
issue, talking about how it was stinging the American
taxpayers. But you are correct. Sometimes one's point of view
is not necessarily compatible with all the truth. And I fell
victim to that myself.
Senator Bumpers. It is a small item, but in my opinion, it
is a very big item, too.
Thank you, Mr. Chairman.
Senator Cochran. Thank you, Senator Bumpers.
Senator Byrd.
Senator Byrd. Thank you, Mr. Chairman.
And thank you, Mr. Secretary. Thank you, Senator Bumpers. I
will just make a statement, and perhaps ask one question.
As a representative from the State of West Virginia, I know
firsthand the challenges confronting rural America and the
small family farm.
And incidentally, I wish every boy and girl in this country
had an opportunity to live on a small family farm. I had that
experience when I was a boy. And it forever shaped my attitudes
and outlooks on life. And a great amount of my self-discipline,
which I try to exercise today comes from the days when I was on
that small family farm, back in the days of the 2-cent stamp
and the penny postcard, no running water in the house, no
electricity in the house. And I am very sympathetic to the
problems of the small family farm.
If we read about the ancient Romans, we will find that the
primary manpower resource came from the farmers in the Apennine
Mountains. And during the latifundia, the purchasing of the
small farms by senators and others in ancient Rome developed.
The small farmers who left the farms, migrated into the cities,
where there was crime, and they contributed to the growing
welfare mobs. And we can pretty much trace the downfall of Rome
from the year 133 B.C., when Tiberius Sempronius Gracchus, one
of the Gracchi brothers, became a tribune, and promoted the
distribution of lands and agrarian programs which would help to
draw these people back to the farms.
We can take a great lesson from that. And if we note the
history of ancient Rome, we will see a lot of parallels between
that government and the ancient Romans and our early Americans
of the 18th and 19th centuries. We have seen this happen in our
own country as well. And we ought to take a lesson from what
happened in ancient Rome, as the small family farmer left the
farm and migrated into the towns.
The U.S. Department of Agriculture, the People's
Department, it was called by President Lincoln, is an agency
that provides meaningful benefits to rural States. And while I
believe that all seven of the agency's mission areas merit
recognition, I would like just briefly to touch on a few
programs that are important to West Virginia. And I begin with
the USDA's Rural Development Program, which provides assistance
to one of my longstanding priorities: the implementation and
maintenance of basic community infrastructure such as water and
wastewater systems, through its Rural Utility Service Program.
While most Americans assume that when they turn on the
faucet, clean, safe water will flow out, in West Virginia,
176,000 families live without an adequate supply of safe
drinking water. And the estimated cost of needed water
development projects in the State exceeds one-half of a billion
dollars.
I applaud the USDA's efforts to alleviate this problem.
Last year, under the capable leadership of Bobby Lewis, the
West Virginia Rural Development State Director, the USDA made
available the necessary resources to fund projects that will
provide hundreds of West Virginians with access to a reliable
source of clean drinking water for the first time. And much
work remains, but I strongly support funding for the water and
wastewater account.
Other programs under Rural Development, such as grants and
loans for housing and community development, have also
contributed to rural revitalization efforts in the State.
I took a trip in 1955, Mr. Chairman, as a member of the
House Foreign Affairs Committee. And I was gone--we went around
the world in an old Constellation. We spent 68 days on that
trip, which, in these days, would have brought forth a number
of investigators I suppose. [Laughter.]
National Center for Cool and Cold Water Aquaculture
But I was greatly impressed when I visited particularly
Asian countries--India and the Far East--at the dearth of
sanitation and sanitary water and waste facilities. And I
learned a great deal on that trip, and I have many pleasant
memories. But one of the most pleasant memories I have is that
of being able to go to a water faucet back home, when I
returned to the United States, and I was able to turn on the
water and drink it--turn the faucet on and drink the water
without fear of becoming ill.
And we have a lot of people in West Virginia right today--
and I would imagine in your State, Mr. Chairman, and other
rural States--that do not have the luxury of clean drinking
water. So I point to these unique needs of West Virginia, as to
rural farmers, out. West Virginia farmers are hard-working
family operators. It is my opinion that small and part-time
businesses, such West Virginia farm operations, represent the
backbone of our Nation's economy and spirit of community.
I have been disappointed in the distribution to West
Virginia of program benefits administered under the Farm
Service Agency, the Agricultural Research Service, and the
Cooperative State Research, Education and Extension Service to
West Virginia. While limited benefits have been brought to West
Virginia from these programs, they have been generally due to
this subcommittee's attention to the worth of the small family
farmer. And I appreciate the subcommittee's efforts.
I have only one quick illustration of an ARS project that
this subcommittee made possible that has already had a valuable
economic impact on West Virginia, although the facility has yet
to be constructed. And I refer to the National Center for Cool
and Cold Water Aquaculture. All leading sources of data now
confirm that aquaculture production will create hundreds of
jobs and generate millions of dollars in the State. And the
development of this industry is a State government priority.
Many reports, further, suggest that abandoned mine sites
can be used for aquaculture, with impressive economic results.
Already, West Virginia, Mr. Secretary, boasts 40-plus active
aquaculture producers, with increased activity expected this
year. And so I thank the subcommittee for its vision,
particularly the chairman and the ranking member.
I shall ask only one question, and with your permission and
the permission of the subcommittee, submit others for the
record, Mr. Chairman.
National Center for Cool and Cold Water Aquaculture
That question would be with reference to the National
Center for Cool and Cold Water Aquaculture, what actions, Mr.
Secretary, will the USDA take to expand cool and cold water
aquaculture opportunities in West Virginia?
Secretary Glickman. First of all, Senator, we believe this
is a very important project, that can have great positive
impact on the development of an industry, which is still pretty
much at a pretty elementary stage in terms of being able to
produce farm-raised fish in cool and cold water environments.
We see more in warm water environments.
And of course, Senator Cochran's own State is one of the
leading aquaculture States in the country as it relates to
catfish. That is an industry that, frankly, has grown like
wildfire in the last 10 years. I visited a few of the
facilities when I was down in Mississippi, and it is a
remarkable thing.
We have a letter that is ready to go to you that defines
the progress in this area. An architectural and engineering
firm was selected in November of 1996 to design the facilities.
And developing design concepts to accommodate specific facility
needs will be initiated by March 31, 1997. That design process
was mandated by Federal law.
We anticipate approval of the final design and plans by
September 30, 1998. Pending the appropriation of full
construction funding, a construction contract could be awarded
in the last quarter of calendar year 1998. To expedite the
ongoing design process, we have negotiated a reimbursable
agreement with the Department of the Interior's Biological
Service, which will allow a senior aquaculture scientist, with
substantial aquaculture experience, to be detailed to assist us
in moving this process forward as fast as we can.
To date, $7.9 million has been appropriated for the
project, $6 million for construction and $1.9 million for
planning and design. An additional $4.1 million of construction
funds are required, for a total of $12 million. Eighteen months
is typically required for construction of this site. So it may
not be absolutely required that the additional funds be in this
appropriation, but it will have to be in the next appropriation
for sure to accomplish that.
Reading from my staff's report, a staff research facility
to address cool and cold water aquaculture production could be
operational as early as early in the year 2000. I would just
tell you that this is a high-priority project. We will see what
we can try to do to accelerate it and expedite it any where we
can. But we are moving on it.
Senator Byrd. Mr. Chairman, I thank the Secretary for the
attention and the interest that he and the Department are
giving to this very important matter, as far as we are
concerned in West Virginia. I also thank the chairman for the
assistance that he has rendered to us in West Virginia in this
regard.
I close by referring to another trip that I took, which was
not a junket, by the way. [Laughter.]
The chairman and I had the great privilege of visiting the
old city of Ephesus, where Paul the Apostle walked the streets
before we arrived there, as did Hannibal and Publius Cornelius
Scipio Africanus Major. Scipio defeated Hannibal at the Battle
of Zama in the year 202 B.C. And Hannibal eventually had to
flee from Carthage to escape the tentacles of the Roman
government, which continued to reach out, which sought to
finally lay its hands on this great Carthaginian general. And
he was with Scipio one day in Ephesus.
And as I say, Scipio had defeated Hannibal, who, by the
way, Napoleon said was the greatest general of antiquity. In my
book, I am not judge of who was the greatest general, but I
have read a lot about Hannibal. And in my book, he is the
greatest general also in antiquity and maybe down to more
recent times.
But Scipio asked Hannibal who the three greatest generals
of all time were. And Hannibal said that Alexander and Pyrrhus,
who defeated the Romans at the Battle of Heraclea, in Asculum,
in 280 B.C.--he used elephants for the first time--Pyrrhus used
elephants for the first time on that peninsula. It was the
first time that the Romans had ever seen elephants.
But Hannibal, to make a long story short, said the three
greatest generals of all times were Pyrrhus, Alexander--no--
yes--Pyrrhus, Alexander, and himself, Hannibal. And Scipio
Africanus said, where would you rank yourself if I had not
defeated you at Zama? And Hannibal then said, I would have been
first. I would have been No. 1. But because you won that
battle, I rate myself as No. 3.
Of course, Hannibal went ahead to commit suicide in 183
B.C. The Romans surrounded the compound in which he had taken
refuge. One of his servants told him that the Romans were out
there, looking around. And he said, well, go to the windows and
make sure they are on all sides. And they reported back that
they were indeed on all sides.
He made his way into a subterranean cavern and he always
carried a little poison in a ring. So when the Romans finally
broke into the compound and found Hannibal, lo and behold, he
had foiled them once again. They did not take him alive.
Thank you.
Senator Cochran. Thank you, Senator Byrd.
Senator Kohl.
Prepared Statement
Senator Kohl. Thank you very much, Mr. Chairman. I have an
opening statement that I would like to have inserted in the
record.
Senator Cochran. Without objection, it is so ordered.
[The statement follows:]
Prepared Statement of Senator Kohl
Mr. Secretary: I appreciate your willingness to testify
before this subcommittee today on the issue of the USDA's
fiscal year 1998 budget submittal.
You have had a very big task over the past year as you
undertake the hard and thankless job of implementing the
significant program changes mandated by the 1996 farm bill. And
for many of these changes, implementation is still in process.
Of particular importance to my state are the dairy reforms
that are underway. Most important is the reform of milk
marketing order reform process, which will not be fully
implemented until 1999. I believe USDA has at its disposal the
tools necessary to modernize this system, to make it more
economically credible and equitable to all producers in all
regions. As you are well aware, I feel strongly that USDA
should use this opportunity to make the changes that are
needed, instead of bowing to the significant political pressure
against change, as so many previous Secretaries have done.
Unfortunately, since passage of the farm bill, dairy
farmers across the nation have experienced a disastrous decline
in prices. This past fall, prices fell by more than 25 percent
in a period of 3 months, and prices remain relatively low
today.
In response, you have taken a number of actions to help
stabilize prices, and I applaud those efforts. I believe your
willingness to increase the use of dairy products in USDA
programs such as the School Lunch Program, the Commodity
Supplemental Food Program, and the Dairy Export Incentive
Program has helped bolster prices.
And your responsiveness on the issue of National Cheese
Exchange reform is much appreciated as well. The flaws of the
National Cheese Exchange and the market's inappropriate
influence on farmers' milk checks, has been one factor
contributing to the price volatility that farmers have
experienced in recent years. Cheese Exchange reform is not a
panacea for fixing the problems experienced by family dairy
farmers. But any reform of the national milk pricing system
must also include a more credible system for price discovery,
and I appreciate your efforts, Mr. Secretary, on that matter.
And at the appropriate time, I will have a few questions
for you about some of these issues.
National Cheese Exchange
Senator Kohl. And, Mr. Secretary, we welcome you here
today. I have three areas that I would like to cover with you.
The first is with reference to the National Cheese Exchange.
Secretary Glickman. Yes.
Senator Kohl. Last year, Mr. Secretary, when you testified
before the subcommittee, we discussed concerns about the flaws
of the National Cheese Exchange. As you know, Mr. Secretary,
research funded by this subcommittee and conducted at the
University of Wisconsin in Madison, highlighted the market
failures of the National Cheese Exchange.
As you know, although less than 2 percent of all the cheese
sold in the Nation is traded on the National Cheese Exchange,
nevertheless, the price determined on the National Cheese
Exchange in Green Bay acts as a reference price for almost all
the commercial bulk sales of cheese in the country. And that is
also used as a very important determinant by the USDA in
setting milk prices paid to farmers.
Now, that exchange is very thinly traded. And as a result,
no one has complete confidence in the prices that are
determined on that exchange. And yet, as I said, these prices
are used in a very important way with respect to both cheese
and milk prices throughout our country. Now, you have worked on
this, and I know you are greatly concerned about it. And I
appreciate that concern. And you have been very helpful in
coming forward with a proposal to delink the National Cheese
Exchange from the USDA's calculations.
Last year I asked you to put together some proposals on
alternative price discovery mechanisms. And I know that there
are many proposals currently being considered in this regard.
Mr. Secretary, if the USDA decides to delink the basic formula
price from the National Cheese Exchange, what viable
alternatives do you see to take their place?
Secretary Glickman. Thank you, Senator Kohl. First of all,
I want to thank you. You have led the way to get us to evaluate
and reevaluate this process by which we rely on the National
Cheese Exchange to determine the price of cheese, which is a
big component of the price of milk and the basic formula price.
You are correct, we are looking for options to remove that
process. Because we believe that delinking that very thin
method of determining cheese prices is important to give dairy
farmers and others who use these markets some confidence that
there is some viability to how the prices are set.
Now, I would say a couple of things, then I would ask Mr.
Collins, our Chief Economist, to comment.
We have been receiving comments since 6 weeks or so ago,
frankly, a lot of this effort was due to your pressure and
Senator Feingold and Senator Specter and others, but you have
been talking about this with me for about a year now. So we
said we have got to find a process other than the Cheese
Exchange. So we have been receiving comments since the end of
January, in response to your request.
We have had about 80 so far. And the comments have been
geared to what substitute methods are there out there, or what
should we do internally if there are no substitute methods,
whether it might be the futures market, which, as of today,
does not really exist. There may be some desire to use such
alternatives.
We have left the record open for about another 30 days to
let people have some additional time to comment and then we are
going to terminate that record. We then hope to have enough
information to make some decisions as to what it ought to be.
But I would like Mr. Collins to comment specifically. And
while I have not evaluated those comments yet, maybe he could
talk a little bit about the general character of what those
comments have been.
National Cheese Exchange
Mr. Collins. Sure, Mr. Secretary, I would be happy to.
Senator Kohl, under milk marketing orders, our main goal is
to value milk at its lowest valued use. That is what the basic
formula price is. To do that, we really have two choices. We
can value milk by looking at milk prices themselves, which we
used to, or we can value milk looking at product prices, which
is what we do now. Cheese, of course, is one of those product
prices.
So basically, the alternatives before us, and the
alternatives that are being suggested in the comment period,
are for us to go back and value milk on a survey of processors
by asking them what they pay for milk, or to find a replacement
for the Cheese Exchange price. The difficulty is, of course,
there is only one organized cash market for cheese in the
United States. That cash market is the National Cheese
Exchange. That is the only place where a cheese price is
discovered in any formal way. And, that is the market that is
under attack.
People would have us, as alternatives, go out and come up
with some kind of survey of transactions that take place off
the exchange. Most of the data we have suggest that those
prices are based on the prices on the exchange. So it is not
clear that we are going to get new information by surveying
off-exchange prices.
Another alternative is simply to help foster the demise of
the National Cheese Exchange, and replace it with a successor
exchange. That process is underway, and is something the
Department has been involved with also. We have been assisting
any exchange that wants to start a new cash market for cheese.
In particular, we provided some assistance to the Coffee,
Sugar, and Cocoa Exchange in that regard.
So those are sort of the general range of options that we
are looking at right now. As the Secretary said, comments have
been pouring in. We have had about 80 comments so far in the
last 2 weeks, and we are evaluating those. I am sure, until
this comment period closes on March 31, we are going to get a
lot more.
Secretary Glickman. What I would like to do is, once we get
a summary of those comments, then I would like to be able to
come back to you and run through the kind of general options
that are there, to determine whether these are the kinds of
things that we can make or should use to make a decision
whether to go back to computing milk based upon processed milk
or go to the product value, which is cheese, which we are doing
right now. However, we really need to get off this reliance on
the Cheese Exchange. There is universal agreement on that.
Senator Kohl. That is good. Do I hear you saying that there
is an agreement that we have to come up with an alternative
price discovery mechanism, that you are hard at work in this
process, and that by the end of March you are going to close
the comment period and, very shortly thereafter, we are going
to really get to trying to put in place an alternative price
discovery mechanism?
Secretary Glickman. I think that is a fair statement.
I would tell you that what I would like to do is, after the
comment period, sit down with you and go over the general
option areas available to us--they probably all have pluses and
minuses to them--and talk about whether we have all the
authorities that we need to do what we need to do or whether we
need additional legislative authorities or not.
Milk Marketing Order Reform
Senator Kohl. OK, good. On milk marketing order reform, Mr.
Secretary, I appreciate your comments about the Cheese
Exchange. But let us not forget that one of the most important
things, is the larger reform process underway--and that is milk
marketing order reform. You and I have had many conversations,
Mr. Secretary, about the outmoded and the inequitable nature of
the current system. You have made many public statements, which
I appreciate, including the comments that you made before this
subcommittee last year, which I appreciate.
Secretary Glickman. Others remember those same comments,
too, who do not appreciate them. [Laughter.]
Senator Kohl. I understand. But I appreciate them.
And you suggested that you agree with the assessment that
we have to do something about the current pricing system.
As you know, we have many opinions about the issue
represented on this subcommittee, and I fully respect the need
of all Senators to represent the needs of farmers in their
State. It is my hope that as you go through your reform
process, you will find a way to find a system that is
economically credible and fair to all producers. Ultimately, if
the milk marketing system is going to have any future, it must
reflect the modern realities of dairy markets, and it must be
equitable.
In my mind, that means not only order consolidation, but
also significant reform in the class I differential price
structure, which has to take place if we are really going to
have some kind of reform that is truly deserving of that name.
In this context, we have been expecting a new discussion draft
from the USDA regarding milk pricing and the milk pricing
system. Could you tell us today when you expect to release that
document to us?
Secretary Glickman. I would ask, Mr. Collins, if you know
generally, timewise?
Mr. Collins. We are very close. We have a draft document
that is complete. It is in its final stages of review. I would
almost say imminently, in the near future, we should have that
out.
Secretary Glickman. I have personally been a little
concerned that we have not had enough of what I call serious
options come from various parts of the country, various parts
of the industry, as part of this process. What people are
finding is this a tough nut to crack. So I get a lot of folks
who are upset about the current system. But then when we say,
OK, help us devise an alternative or modification that needs to
take place, it is tougher to get that, even from the academic
side of the equation. We have got some. It is coming; however,
it is slower than I would like to see.
Senator Kohl. By the same token, imminently, you are going
to have some serious proposals for us?
Secretary Glickman. That is correct. Yes; we have got to
get them out. And then, if they are going to be attacked or
they are going to be challenged and improved or modified, we
have got to get them out quickly.
Risk Management for Dairy Farmers
Senator Kohl. OK. Last, I would like to talk about risk
management for dairy farmers.
In your testimony, you discuss efforts underway to help
farmers manage risk. Given the rapid deregulation of
agricultural markets as a result of the 1996 farm bill, and
price volatility that is inevitably going to result, risk
management, as we know, is a necessity. Most of the rhetoric
that I have heard about risk management has been focused on the
needs of crop farmers, with little discussion, Mr. Secretary,
of the risk management also for livestock producers.
This past fall, dairy farmers saw their prices decline by
over 25 percent in 3 months. And beef prices have also been
very volatile in recent years. That sort of volatility makes it
harder for the average livestock producer to stay in business
unless they have greater opportunities to manage the price
risk.
So I would like to ask you, Mr. Secretary, what is the USDA
doing to help livestock producers weather the storms of price
volatility?
Secretary Glickman. It is kind of interesting, the first
time I saw the Washington Post comment since the farm bill was
on dairy price volatility. I do not know if you saw that
editorial. But it recognizes that we are in a much more risk-
oriented environment now, generally speaking, in agriculture,
as a result of the last farm bill.
There is no question that the focus has been on the crop
side. In expanding this pilot program nationwide for revenue
insurance, it has been on the crop side. However, we do have a
couple of things--and I would again ask Mr. Collins to comment
on this. One is the proposed options pilot program for milk.
That has been submitted to the Department. We have not acted on
it yet.
The whole area of agriculture options, as you know, over
the years, has had a lot of speculative concerns about it. So
whether it is in options for grains or options for milk, it is
one that, since there is no futures market in milk products to
speak of, it is one we are looking at. And perhaps Mr. Collins
would comment on that.
The other thing is, as a part of our efforts on livestock
concentration and the concerns about it, we have created a lot
of new mechanisms on new market information for livestock. Some
of those are out there already including more frequent
reporting of prices of livestock, both cows as well as other
farm animals. And a lot of your producers are already taking
advantage of some of this increased market reporting
information, much more frequent information, information on
imports and exports across the borders.
Now, again, this is in the animal area, not in the raw
product area. Keith, do you have any other comments? It is a
very legitimate concern, in terms of how we deal with the issue
of risk.
Mr. Collins. In dealing with risk, we really want to focus
on two areas, financial management of farm business operations
and marketing management of the product. We have a statutory
requirement from the 1996 farm bill to run a risk management
education program. There is a small amount of money in our
budget to fund that effort. We have already begun that effort.
The Risk Management Agency [RMA], as you know, focuses, as the
Secretary said, on crops and crop insurance.
Secretary Glickman. Although, if I might add, crop
insurance for feed does provide some protection for the dairy
producer. Because the feed costs have been a big part of the
cash flow problem there.
Risk Management for Dairy Farmers
Mr. Collins. This risk management education initiative that
we will run will also include livestock and dairy. It is going
to be broader than just crops. It will involve developing
packages of information to cover both financial management, as
well as, marketing management; and, communicating that to
producers to help them identify, prioritize, and deal with
their risks.
We also, as the Secretary said, have received from the
Coffee, Sugar, and Cocoa Exchange a proposal for an Options
Pilot Program for dairy producers. I would point out that the
1996 farm bill limits our ability to use the Options Pilot
Program the way we did in the past. Such programs now have to
be essentially budget-neutral, whereas in the past, we used CCC
funding to fund those programs. Therefore, we are having some
difficulty in studying the proposal from the Coffee, Sugar, and
Cocoa Exchange; but, we are going to try to work with them and
see what can be done in that area.
As you may know, there are a couple of dairy co-ops in the
United States that are running programs that allow producers to
hedge and use futures markets through their co-ops. I think, in
fact, there are only two such co-ops that do that. And we would
like to see those kinds of activities become more broadly
developed, so that futures markets for dairy products do become
much more viable than they currently are.
Senator Kohl. Well, I thank you. And I appreciate your
sensitivity and your concern about this issue and this problem
and your determination to try and do something about it to
bring some stability, over and above what exists today, to
livestock producers.
I also want to say, Mr. Secretary, that I am very impressed
with the efforts that you have made thus far to understand and
recognize and the determination you have shown about trying to
do something with respect to the pricing system on milk. I know
it has been done at some peril with respect to yourself and
some of the criticism that you have received, but I think you
really are determined to find some equity in this situation.
And we understand equity is not all black and white.
And I have said across the State of Wisconsin that of all
the Secretaries I have worked with, none has been, in my
opinion, more determined to be forthcoming and decisive and to
get something done. And across the State of Wisconsin, because
of the comments that I have made, there are great
expectations----
Secretary Glickman. I knew that was coming. [Laughter.]
Senator Kohl. For what we hope that you can achieve. And
for that, I want to say that I appreciate your efforts, and I
am looking forward to getting something done, working with you.
Secretary Glickman. Senator, obviously, you have had a
great deal to do with inspiring my interest, as has Senator
Leahy and others, as well. I think, philosophically, this is a
very important issue for us. Because it relates to the
viability of small-and medium-sized producers generally. It is
not just in dairy. As you know, these trends toward fewer
producers and more larger producers is almost in all segments
of American agriculture.
Quite frankly, I do not think we in USDA, over the years,
have given a lot of attention to the changing structure of
agriculture. I am not saying that we fight the nature forces of
the economy and economic trends. To the extent that we can kind
of be a constructive, positive force in helping small-and
medium-sized agriculture stay in business, that ought to be one
of our prime focuses.
And that is not just in dairy. It is in the row crops and
other commodities as well. And the markets are sometimes cruel.
And Congress, in the 1996 farm bill, and we signed that bill,
determined to change that, to let the markets run more
naturally, with less Government involvement. We also have an
obligation to recognize that a little bit of what Senator Byrd
talked about is right on target. The fundamental structure of
the country is strengthened by the preservation of strong
agriculture. That just does not mean five companies running the
show. That means a healthy social structure as well.
I view the dairy issue as part of that issue, keeping
enough folks on the land to preserve a social structure in this
country as well.
Senator Kohl. That is something with which I could not
agree more. And again, I am very impressed with your
sensitivity, and I appreciate your being here and your
willingness to work with us.
Secretary Glickman. Thank you.
Senator Kohl. Thank you.
Senator Cochran. Thank you, Senator Kohl.
Senator Burns.
Prepared Statement
Senator Burns. Thank you very much, Mr. Chairman, I have an
opening statement that I would like to have inserted in the
record.
Senator Cochran. Without objection, it is so ordered.
[The statement follows:]
Prepared Statement of Senator Burns
Thank you, Mr. Chairman.
I would like to offer my thanks to Secretary Glickman for coming to
the Committee today to discuss the proposed Budget for the Department
of Agriculture, as submitted by the President. I do have to tell the
Secretary though that I am very disappointed in the budget that this
Administration has proposed. I don't feel as though the Department of
Agriculture has taken into account the agricultural producers of our
country in this budget. They have listened to, too many groups that are
no longer related to the production of food and fiber for our great
land.
The issue of great concern to me, is the funding level for real
agriculture in this budget, and the misperception that the American
public has about where the dollars in this budget really go. I have
concerns as well about the funding for those agencies and areas that
directly impact the concerns and fears of the people who make their
living on the ground providing a food supply for our country. Among
these are the budgets for Agricultural Research, Grain Inspection
Packers and Stockyards, predator control and those agencies which make
sure that these people have access to information and the continued
ability to work on the land.
I am also very glad that the Secretary is here today, since later
this afternoon my Montana colleagues and I will be meeting with him to
discuss an issue that is of vital importance to the state of Montana.
For several years now I have held hope for the Department of
Agriculture, through the Animal Plant Health Inspection Service to come
to the front in the debate over the disease of brucellosis in the
Yellowstone bison herd.
I have to say that as of this date I have been greatly disappointed
in the agency and the department in general on this issue. I feel very
dissatisfied by the way that the agency has handled both the animal and
human health issue in this area. I hope the Secretary remembers what a
great proponent I have been of APHIS in the past and the words of
encouragement I have provided in these hearings. However, later this
afternoon I will discuss more thoroughly this very issue with the
Secretary and will not take any more Committee time than necessary to
discuss this issue today.
Before concluding on this topic though, I would like to extend to
you an invitation to come to Montana. I believe it imperative that you
come out and see what exactly it is that the government of the state of
Montana must face on a daily basis. To make this trip beneficial to
all, I think you need to schedule this trip almost immediately. I would
be more than glad to accompany you so that you can see the problem we
are facing right up front and in person.
Mr. Secretary, I continue, as in years past, to be very concerned
about the Agricultural Research Budget. As always this Administration
has continued to defund the grants, which are of extreme importance to
states like mine and those that surround Montana. I am also concerned
with the budget increase for the Agricultural Research Service which
will provide funds for nutrition research and not provide an increase
in funds for those areas which will provide for the farming family on
the land.
In looking at the proposed budget, I have seen the increase in the
ARS budget, but when I look at where the dollars are going, I see
programs that will not help the family farm. The budget, as proposed by
the President, will provide additional funds to the nutrition study of
our food supply. Mr. Secretary, there are numerous groups in downtown
Washington, that are providing this research at little or no input of
taxpayer dollars.
When visiting with my fellow Montanans, I find that they want
research dollars going to funds which will provide for them in the
future, not to groups or organizations that seek to tell them what is
in that steak or vegetable dish that they are eating tonight. What we
seek are ways to increase what we have now and what we can do to help
the family farmer.
These people ask that their tax dollars go to the universities that
will provide for them in the future. They want to see their tax dollars
go to something that will assist the future and their children. Yet
this Administration seeks to provide funding for special interests that
have no interest in the future of the food and fiber provided by
agricultural producers in our nation.
While reviewing the budget proposal earlier this month I was also
concerned with the manner in which the department thought it necessary
to reduce funding for Grain Inspection, Packers and Stockyards. During
the past two years Congress has heard the numerous concerns of the
livestock producer on the issue of packer concentration. Yet as we look
into your numbers, we see where you think you can get by asking more
from this agency and provide them with less funds to investigate what
is happening on the ground.
This work needs to be done to provide a sense of confidence in the
federal government by the people that fund that very government. Yet it
appears your department has no concern for the developing or renewing
that confidence. I hope you will not tell me that the Department feels
that they can make up the difference in user fees, because I have great
concern about them as well.
Mr. Secretary, as the past year has moved by us, I have become
increasingly concerned with the manner in which your department has
proceeded with the implementation of the most recent farm bill. It
appears to me, that the rule making procedure has been used to benefit
the department and not the producers in the field. A case in point is
the recent rule making on the Conservation Reserve Program.
Within the past few weeks you have finally put out the final rules
on CRP. This week you are taking the time to educate your field
personnel, and next week you start the process for signing up for the
program. At this then, you only give producers a few days more than
three weeks to make the decision of signing up for the program. This
action is undefendable to me.
Basically, I guess I am concerned with the amount of leadership,
and where the leadership in your department is coming from. One example
of this comes directly from my office. Recently in an attempt to
schedule the meeting for this afternoon, my staff was ignored in
efforts to make contact with you to schedule this appointment. I will
get into more detail with you on this later, but Mr. Secretary, I would
expect a little more from a former member of Congress.
Mr. Chairman, I have lost a great deal of confidence in the
Department of Agriculture this past year. I would hope that today, both
in this meeting and later with Secretary Babbitt, that the Secretary
can give me some reason to restore my faith and confidence in this
department. The agriculture producers in our country deserve a
department that is working for them and not against them. They expect
and deserve a Secretary that will be out there telling their story.
This is something that I would like to see as well.
We are facing a time in agriculture where the vast majority of the
people of this country have no idea of the pleasure of being on the
land, of working with livestock and seeing of nature reborn every
spring. Our country needs leadership that will provide this rural
lifestyle to continue and not always feel like ``Big Brother'' is
trying to put them out of business and drive them off the land.
I look forward to listening to Secretary Glickman and learning what
he plans to do with the funding that the Administration has budgeted
for Agriculture this year. It is my sincere hope that he can give me
reason to renew my confidence and faith in the Department of
Agriculture.
Thank you, Mr. Chairman.
ARS Funding
Senator Burns. Mr. Secretary, thank you.
I want to stress just some of my concerns with this
appropriation and where you have placed your emphasis and where
I am going to--I am going to be very, very up forward with--I
hope you change some of it. First of all, I do not think you
have got near enough money in ARS. I think, if there is one
area that we are lacking in the U.S. Department of Agriculture
it is in agricultural research.
Now, you did increase some dollars there. But the dollars
went the wrong way. We have got people all over this country
doing nutrition studies and recommending diets and all this
healthy stuff. And I will probably die before I am 62, but that
is OK; it is because I eat all the wrong stuff. I happen to
like it. But we are not doing enough as far as helping
production agriculture.
Now, everybody wants to keep that young farmer on the farm,
but I do not see anybody out here in the Department of
Agriculture leading the band to say we ought to reform estate
taxes so we can pass our farms on to the next generation. I do
not see anybody in the Agriculture Department doing that.
Mr. Secretary, we are to the point now where we need an
advocate for the farmer. We need an advocate for the people who
provide the food and fiber for this country, and quit fiddling
around with this other stuff.
And Robert Byrd hit it over here a while ago--the way we
handle our water is very, very important. I have a daughter
that graduates from medical school this spring. I am very proud
of her. You know what she said? The advances that we have made
in medicine have only contributed 5 percent to the increasing
of the average life-span in this country. The rest of it has
been the way we handle our water. That has really done more to
extend our life expectancy than anything that we have done in
this country. So I think it is very important.
In ARS, I do not think you have got enough money. In
construction, we need some more money. And do not worry about
the nutrition programs; let us worry about production
agriculture. I want to change that formula a little bit. And I
will work with you on that. That is one area.
The next one, and with that, through ARS, is extension. I
think that is very important. It does nothing to do the work if
we cannot get that information out to the people who have to
apply the new technologies and the work that we have done
through ARS.
Inspection Activities
Let us talk about inspection just for a second. We got a
situation on the border. We are going to address that. And we
will talk to you about that more privately with the situation
up there. Because I happen to believe that whoever said that
they are going to pass along these increased fees on
inspections to the consumer, they are as crazy as a bedbug. It
is going to go right back to the producer.
Because I do not care how you look at it, agriculture will
always--we will always buy retail, we will always sell
wholesale, and we will pay the freight both ways and all the
incidentals in between. We will always do that. And anybody
that does not understand that ain't never lived on 160 acres of
two rocks and one dirt. And there is a difference right now.
There is a disparity between the way we inspect chickens and
poultry and the way we inspect red meats.
We are not playing with a level playing field there. And I
think it is time that we take a good look at that. We have got
some good people down in P&S and at our Inspection Service.
They have some recommendations and I think we should take those
recommendations.
Field Office Closings
And then another area, you are talking about a reduction in
force as far as our service centers are concerned. I want to
see that reduction happen here before it happens at the point
of sale, so to speak. We are talking about closing offices in
Montana. And we have got long distances out there. And I would
ask you to take a good look at your force here, and then take a
look at the force out there at the sort of point of sale or
point of service. That is where we need to put our people, and
help some of these people through some of these very stressful
times.
As far as the bee situation is concerned, I voted for the
bees. I am happy to say, this old, conservative Republican
voted for that liberal, old program of helping the beekeepers.
Now, all at once, we are finding out that that was a very, very
shortsighted situation. It is also shortsighted in the wool
incentive. Because we have one-half as many sheep in this
country as we had whenever that incentive went away. And that
is the biggest share of it. And that did not cost the taxpayer
anything but the administrative costs. And that is a shame.
So in order to cut programs and to be heroes to what we
think is perceived as helping the taxpayer, we absolutely hurt
the taxpayer and in a lot of different ways. So those are the
areas that I will be looking at. I do not have any specific
questions. But I am going to make some recommendations to you
with regard to where we spend our money on these
appropriations. Because I think there are some disparities
there that are just very glaring.
Advocate for Agriculture
And, Mr. Secretary, I am down to the point where we in
agriculture have got to have an advocate at the USDA. Everybody
else has got one down there, but not this old guy out here that
is--and we are going to lose a lot--do not worry about the
numbers of cattle--we are going to take care of that--North
Dakota, South Dakota, and eastern Montana--we are going to take
care of a lot of those numbers this year. We are going to lose
a lot of cattle--frozen to death, standing. Could not get feed
to them.
And besides that, it has been terribly cold. And right now
they are saying snow does not qualify as being a disaster. But
we should take a look at that and see if we cannot do something
about that.
But those are the areas that I am really concerned about--
inspection, how we inspect, are we dealing with products coming
into this country, are they coming in on the same label, are
they going through the same hoops that our local producers have
to go through. And that is my statement. I am going to see you
this afternoon if I get out of here. Because I have got to go
look on television now--about violence on television.
Secretary Glickman. Can I just make a couple of quick
comments?
Senator Burns. Yes, sir.
Secretary Glickman. First, I appreciate your comments
concerning the Agricultural Research Service [ARS]. Congress
has to reauthorize the research programs this year. So to the
extent of redirecting priorities, that will be a part of the
process. Clearly, we have the best agricultural research
establishment in the world. We want to keep it that way.
Inspection Activities
On the issue of inspection, just so that you know, we
recently announced some changes in increasing the amount of
random inspections of meat coming across from Canada. Your
office probably got a copy of this, but we will make sure you
get a copy of what was done. I think you will find that
somewhat helpful in the process.
On the disparity issue, the fact is there are differences
between chickens and beef, in terms of the numbers, the
quantity, and everything else. I have said publicly my goal is
to achieve relative parity in the inspection process.
Senator Burns. We just want a level playing field. Because
I ain't got too many chicken farms in Montana.
Secretary Glickman. Both are big parts of American
agriculture, poultry and beef.
Senator Burns. I am not worried about chickens. I have
never seen a seeing-eye chicken or a stock chicken or a guard
chicken. I do not know what to use them for. [Laughter.]
Secretary Glickman. As you know, I come from a State which
actually is the largest beef processing State in the country.
Senator Burns. I will talk to you about concentration now.
[Laughter.]
Secretary Glickman. But I have grown appreciative of the
significance of the poultry industry. For example, in 1990, our
sales of poultry to Russia were about zero. Last year, we sold
nearly 1 billion dollars' worth of chickens to Russia--$1
billion, from zero 10 years ago, roughly. One-third of all of
our poultry exports go to Russia. Nearly 25 percent of
everything the Russians buy from us, which includes
pharmaceuticals, cars, airplanes, nearly 25 percent is
chickens.
Senator Burns. I am sorry I brought it up now. [Laughter.]
Secretary Glickman. So I guess my point is that it is an
important industry as well. At the same time, we do not want to
give any one part of the livestock industry a disproportionate
advantage in the slaughtering and in inspection process. That
is not my goal. Our goal is to move those industries to a more
comparable level. We are doing that as a matter of fact.
Senator Burns. Well, there is a disparity there, and if we
could address that, that would be fine. But that is not high on
my agenda either. I think the ARS, extension, the way we
deliver our services to our farmer, and we need an advocate. I
have never seen a time when agriculture needed it more than we
do right now. Because we have got a lot of answers for this
society. And we are not having riots out there, you know. None
of that. But we want to keep on producing, too.
And I am sure glad to hear now that--the cloning of the
sheep, I realize why Dale would be concerned about that.
Thank you very much. [Laughter.]
Senator Cochran. Thank you, Senator Burns.
Senator Leahy.
Senator Leahy. Thank you, Mr. Chairman. I am delighted to
be a member on this subcommittee. You and I have served
together on appropriations for many years, as well as on the
Agriculture Committee because of the influence this
subcommittee has on agriculture and the environment and USDA
and the lives of people who use the WIC Program or other
nutrition programs. And I find that very interesting.
National Cheese Exchange
I listened to what Senator Kohl said about reducing the
influence of the Cheese Exchange and the pricing of milk. Well,
I agree. It makes no sense in my State of Vermont, for example,
to see a little cheese exchange, which has really no influence
in our State at all, other than the fact that whatever happens
on it can dramatically change overnight the price of milk in
Vermont. It has nothing to do with supply and demand. It has
only to do with what one company or two companies might do in
that one exchange.
I think that we can find a far better way to have a
statistically reliable national survey system to monitor
prices. What I would suggest is do something like we do with
the New York Times best seller list. The New York Times goes
each week to different booksellers, checking how the books are
being done. For example, every week, the New York Times checks
a list sort of at random, of bookstores. That way, no book
publisher can just buy up all their own books and go up to the
best seller list.
What has happened on the Cheese Exchange, though, is just
the opposite. They know that every single week or month or
whatever it be, you have to go to that same one exchange. So it
is very easy to manipulate it.
As I said, when we see the price of milk drop
precipitously, for example, in Vermont, and yet the supply and
demand has not changed a bit, you have to ask what caused this.
And if the cause is one small exchange and some people probably
speculating or manipulating, then we have to find a different
system. And I will work with you in any way we can to do that.
It has been mentioned here also the farm bill. And I would
note to everybody, a lot of work went into that farm bill and
passing it last year. It was a bipartisan coalition in the
Senate. I was part of that. We worked very hard to compromise
and to put one together. It meant that Republicans and
Democrats had to work together. A lot of special interests,
from the left to the right, were left outside the door while we
tried to do what was best for this country.
I would also note, Mr. Chairman, that as I recall, that
farm bill got the largest number of votes a farm bill has
gotten, certainly since I have been in the U.S. Senate. I say
that because I will fight any and all attempts to undo that
bill before we have a chance to see how it works.
I have heard some discussion among some that say we have to
revisit it and basically rewrite it. I will do everything, from
having a chance to instruct my colleagues on what goes into a
farm bill--I understand there are several hundred pages that
they probably have not had a chance to read, although they may
want to hear me say them over the days and weeks and months on
the floor if there is going to be a change.
Nutrition Programs
We established spending, such as the CRP, the Conservation
Reserve Program. We have to work together, protecting these
programs and to protect our environment. The nutrition
programs--I support the President's request for $100 million
for a supplemental appropriations for the WIC Program. If we
take advantage of the savings identified, we can provide
supplemental funds to feed 400,000 additional infants,
children, and pregnant women.
We have hungry children in a nation where none of us in
this room goes hungry except by choice. If you stop to think
about that, there is not a single person in this room who goes
hungry or will go hungry today except by choice. We have a lot
of children who do not have that choice. And we suffer as a
nation if they start off hungry and if they go into life
hungry.
We have one program that works well, the Farmers Market
Nutrition Program in WIC, where we spend about $6 million on
that. That has worked very, very well in my State. What it
means, Mr. Chairman, is that on these farmers markets, people
can use WIC certificates and they get food that is extremely
fresh, that had been growing hours before they get it.
I look forward to being on this committee. I have questions
which I will submit for the record.
I was pleased, as I said, to see the question on the Cheese
Exchange come up.
And I would hope that the Department might continue to look
at the electronic benefits transfer system--that is an entirely
different thing--on food stamps. As the son of a printer, I
hate to say this--but we are spending hundreds of millions of
dollars in printing food stamps. And there has to be a better
way.
And also, I would think, from my days as a prosecutor, I
think that you could track fraud a lot easier with an
electronic system. It certainly would be fairly easy to set up
a program where, if you suddenly see a huge spike in the use of
food stamps in one small store, that you would at least call
your investigators' attention to it.
Thank you, Mr. Chairman.
Russia's Economic and Political Situation
Senator Cochran. Thank you very much, Senator Leahy.
Mr. Secretary, this morning I had an interesting
experience, having been invited to a breakfast meeting
sponsored by the Aspen Institute. I heard a presentation from
Dr. Peter Reddaway, who is professor of political science and
international affairs at George Washington University. He
discussed the current political and economic situation in
Russia. Your reference to the tremendous growth of Russia as a
market for poultry exports reminded me of some things he said.
I thought you might be interested in hearing some of his
comments, because they may very well affect the capacity of
Russia to continue to be an important market for United States
food exports.
He said that the gross domestic product in Russia is down
50 percent over the last few years--I think he said 4 years--
even though they have an inflation rate that is very modest--
almost zero--and their debt-to-GDP ratio is about 7 percent.
Those are the only good things that you can say about the
Russian economy today. Because, in his view--and he said this
is shared by others--the economy is in a very serious state--
almost a state of near collapse because of the criminal element
that has taken over in large measure. The economy is being
criminalized and corrupted in ways that very few realize around
the world today.
He said: In July, funds for rations to feed the military
will cease to exist. The central government will not have funds
to make available to the military to buy food. And that
regional governments will be asked to provide those funds or
foodstuffs to feed the military forces that are deployed in the
various regions of Russia.
It is almost shocking or alarming to me to just hear the
various other characteristics of the Russian economy. I bring
that up because I am curious to know whether the Department of
Agriculture is aware of these reports and whether or not any
assessment is being done on the impact on American agriculture
of the state of the economy in Russia.
Secretary Glickman. The answer to the second question is
yes. Our Foreign Agricultural Service is actively involved. We
have people in Moscow and throughout the area, trying to
analyze these conditions. And also we rely on intelligence
reports as well.
But let me tell you an interesting thing. Vice President
Gore and the Prime Minister of Russia, Mr. Chernomyrdin, they
have this commission, the Gore-Chernomyrdin Commission. They
meet twice a year, once there and once here. We just had our
meeting here. I was with my counterpart, Mr. Zavaruka, who is
the Deputy Minister for Agriculture. I am not sure I heard as
bearish a sounding scenario, but it is clear that one of the
reasons why they have just extraordinarily exploded their
demand for American poultry is because they have lost their
infrastructure to produce farm commodities of all sorts. They
do not have the feed available. It is just a combination of
factors.
One of the things that they clearly said to us was that you
cannot expect to have these markets forever unless you help us
develop our own poultry infrastructure, which our industry is
beginning to do. We are involved in joint venture activities;
and, we are trying to help with that. Because we believe,
without that, we risk the fact, politically, of having these
markets removed.
Remember, they tried to do this last year, alleging
Salmonella, or some other sanitary type of problem. But they do
not have, because of the lack of marketing and financing
capability, much of an agricultural infrastructure at all.
Obviously, we are worried about it. The days of us selling
large amounts of grain have long passed. But there is some
reason to believe they may need some grain in the future
because of their infrastructure problems. We are ready,
willing, and able to help with that. I talked with the
Agriculture Minister about that as well.
They clearly are in deep trouble, but my impression from
the meeting that we had was that there is some degree of
political stability, depending of course on President Yeltsin's
health and other things. We just have to do our best to try to
improve their economic and political structures. In the
meantime, they still need our poultry. They do not have the
infrastructure to grow their own chickens in any kind of
marketable way.
The old days of us being very dependent upon them in the
grains are gone. They do not have the resources to buy it. We
have seen ourselves become somewhat dependent on the poultry
situation over the last few years and we have got to recognize
that it may be tenuous. I mean we have got to hope their
political structure is such that they can continue that
process.
Senator Cochran. There are no estimates in the Department
as to the length of time that this kind of purchase record or
practice of buying poultry products can be sustained? Are you
making any estimates or projections of that?
Secretary Glickman. No; at least not as a result of these
meetings. As you may know, when the Russians made sounds to cut
off these imports of poultry, the Vice President personally
intervened and the Prime Minister also personally intervened,
to see what was going on. It is clear that we also have an
obligation to help them develop their own indigenous industry.
Our industry understands that and is working on that. But, I do
not have any formal projections.
I would just tell you that we are dealing with a rather
tenuous economy over there.
Russia's Economic and Political Situation
Senator Cochran. One question that was asked of this
professor at this breakfast meeting was what kind of aid
programs would be most effective in assisting in the continued
strengthening of the Russian economy. He talked about training
programs, education exchanges, technical assistance, and the
like. Are there any Department of Agriculture programs that are
ongoing that you are requesting funding for that are
specifically designed to deal with that problem in Russia?
Secretary Glickman. Yes; but let me first tell you that we
have a book we have published, called ``Agriculture Baseline
Projections to the Year 2005.'' Basically, it analyzes every
commodity, every importer, every exporter. I would have to say
that our projections, poultry trade projections, are actually a
slight increase over the next 5 to 6 years.
Senator Cochran. Is that worldwide?
Secretary Glickman. That is to Russia.
Senator Cochran. To Russia specifically?
Mr. Collins. Excuse me, that is worldwide. That would be
Russia's global imports of poultry. That is premised on some
recovery in their economy. The economic data on gross domestic
product, which you pointed out, have been somewhat of a
surprise to analysts who have followed Russia over the last
several years. For about 2 or 3 years in a row now, people have
been forecasting that Russia's gross domestic product [GDP]
growth would turn positive in the upcoming year. It has not. It
has remained negative.
GDP growth is doing much better than it was a couple of
years ago. A couple of years ago it was declining at about a
12-percent-per-year rate. This current year, I believe the
estimates are for a couple-of-percentage-point decline. I mean
this is so horrific that Americans cannot even conceive of
this. We define a United States recession as two quarters of
negative GDP, and we are talking about 15-percent declines per
year in Russia. I think I read in the Wall Street Journal
recently that Russia's GDP just turned positive.
Right now, observers believe that Russia's annual GDP
growth would probably not turn positive until 1998, but most
likely 1999. But at least it seems to be stabilizing. The sharp
declines of the last few years seem to be bottoming out at this
point.
Cochran Fellowship Program
Secretary Glickman. Let me just make a couple of comments.
As you know, there is a program named after you, the Cochran
Fellowship Program. And those do provide opportunities for
technical assistance to individuals. I was just in South
Africa, and I met one of the Cochran fellows. And this is a
young man who came over here to learn about the wine industry.
He was a Cochran fellow. He has gone back and has become a
leader in South Africa, in terms of trying to develop black
ownership of vineyards and involvement in the wine industry.
And your name came up.
There I was in the middle of South Africa, and there was
the name Cochran which came up. It is something that changed
his life. It just shows you how this can work.
We have market development activities. Steve, maybe you
might want to talk about the various assistance programs,
credit programs, et cetera, emerging democracies programs, I do
not have it right at the top of my chart here.
Mr. Dewhurst. We have a series of programs, some of which
provide direct assistance to exports, like the export credit
programs, and some of which provide training, or what I would
call indirect assistance to foreign countries. The Cochran
Fellowship Program is funded in the 1998 budget at the same
level it was funded in 1997, $2.4 million.
We have about 287 international participants from 30
countries in that program this year. Over 4,800 participants
moved through that program since its inception. That program is
planned to continue.
When you look at the entire international portfolio of the
Department, you are talking about $7.6 billion in programs.
That includes everything from the Export Enhancement Program to
the cooperator program run by the Foreign Agricultural Service.
We have quite a tool kit of programs, all of which are being
carried out to deal with various aspects of the kinds of help
we need to give foreign countries or our own exporters.
Senator Cochran. I know that in our budget, we are going to
be constrained by the allocation we get as a subcommittee. The
anticipation is that if we are lucky, we will have the same
amount of money for our discretionary programs next fiscal year
as we had in the current fiscal year--which means no increase.
I am wondering whether or not we are figuring out ways to make
our dollars go further in these foreign assistance programs
that stimulate demand for U.S. agriculture commodities and help
foreign economies buy more of what we produce here for sale in
the global market.
I know that in the cooperator program, for example--and I
was going to ask you about this----
Secretary Glickman. Which program, sir?
Foreign Market Development Cooperator Program
Senator Cochran. With respect to the cooperator program
that the Foreign Agricultural Service administers, there is a
change that is suggested in the budget submission which would
require cooperators, U.S. agriculture commodity groups, to pay
more to participate in that program. Is that going to enlarge
the program? Or is that required just to keep the program at
current levels?
Secretary Glickman. Steve, do you want to comment on the
cooperator program?
Mr. Dewhurst. Yes, sir; it is required just to keep the
program at current levels. The FAS, like a lot of our agencies,
has costs that are rising faster than our ability to add money
to their discretionary budget. And in particular, in the
Foreign Agricultural Service, they jointly finance a computer
center with the Commodity Credit Corporation. In the fiscal
year 1998 budget, a greater share of that cost is on the FAS
side of the agenda.
They have to absorb that cost. The way they have done it is
to constrain the new money that is going into the cooperator
program. The only way to keep the program at the prior level
is, then, to ask the cooperators to make a greater contribution
to the program.
Senator Cochran. Has there been any effort of outreach to
discuss this with the participants, to see whether or not they
are going to pay these extra assessments or required increases,
or whether they are going to just maintain their current level
of contribution and therefore decrease the activity in this
program? Do you know the answer to that?
Mr. Dewhurst. No; I know that the Foreign Agricultural
Service has had discussions with the cooperators. However, I do
not know where they have come out on that question.
Market Access Program
Secretary Glickman. On the Market Access Program [MAP], the
Foreign Agricultural Service has engaged in efforts to improve
its operation, in targeting its impact more in recent years. I
believe that program gets a lot of criticism; but, it is a drop
in the bucket compared to what the rest of the world spends. We
are proposing flat-lining that number this year.
Frankly, I would like to have more money to spend in it.
But it has had a remarkable impact on everything from fresh
fruits and vegetables to livestock. And we think it is very
important.
The French, I think, spend as much on promoting their wine
alone as we spend on our entire Market Access Program.
Senator Cochran. That is an argument I remember using
against an amendment to knock out the money for the program
when this bill was on the floor last year. We are always
confronted with some amendment to either reduce the level of
funding of the program or to cancel it completely. I am glad
that the administration is supporting full funding for the
program. I commend you for your efforts to get that included in
the budget.
I was going to ask you about the changes that you mentioned
are being made to target and reform and try to change the
program to meet some of the criticisms. I know you probably do
not have all that available to you, but I would like to have
that for the record--what changes you are planning to implement
or have implemented--so we will know what they are. I assume
they are all authorized under the law and that you would not go
beyond the authorities of existing law in changing the program.
But whatever you have in mind or whatever you have in place, we
would like to know about it.
Secretary Glickman. OK, we will get you that.
[The information follows:]
Market Access Program
Changes have been made in the Market Access Program (MAP)
to make it more targeted and to increase small business
participation in the program. For fiscal year 1998, the budget
includes the full authorized permanent funding level of $90
million for MAP.
The Market Access Program has been an important contributor
to the gain in U.S. world market share of sales of consumer-
oriented products since 1985. During this period, MAP and its
predecessor, the Targeted Export Assistance Program, have
helped this share grow from 11 percent to 18 percent in 1994.
Each percent gain represents sales of more than $1 billion.
While changes in the value of the dollar have added to the
growth, analysis carried out by FAS has indicated that market
promotion contributed to more than half of the total increase.
Consistent with the Administration's commitment to
streamlining government activity, new MAP regulations were
published on February 1, 1995, that increased flexibility and
simplified program requirements for participants. The revised
regulations also reflected public comments and changes made by
the Omnibus Budget Reconciliation Act of 1993. Among the
changes made by the rule are:
(a) U.S. exporters no longer need to show that a U.S.
agricultural commodity faces an unfair trade practice in an
overseas market in order to participate in the program;
(b) Small businesses and cooperatives are accorded priority
consideration in the allocation of brand promotion funding;
(c) Application and allocation approval criteria are
clarified;
(d) Paperwork requirements are reduced;
(e) Procedures for appealing compliance findings are added;
and
(f) Program evaluation requirements are clarified and
simplified.
Secretary Glickman. There has been some targeting to
cooperatives and smaller operations. But we will get you that
information.
Senator Cochran. Some of those changes may be required by
the changes that we had to accept when the appropriations bill
was on the floor.
Secretary Glickman. That is right.
U.S. Agricultural Outlook
Senator Cochran. In connection with the outlook in the
report that you have there, talking about Russia's capacity to
continue to purchase United States agricultural commodities in
the global market, what is the outlook generally for world
economic conditions and the impact that that will have on
United States agriculture and the demand for United States
agricultural commodities? What do you show in your outlook
report?
Secretary Glickman. Keith, you take it first.
Mr. Collins. Generally, it is fairly positive. And that is
premised primarily on strong economic growth, particularly in
Asia and in Latin America. Those would be the two greatest
areas of growth. This past year we had agricultural exports of
about $60 billion. We show them coming down a little bit in the
current year, to $56.5 billion. And then, generally, we show
them trending up to the year 2005, getting up to something in
the order of $80 billion.
But the driving force behind this is principally economic
growth in less-developed countries, which, this year, will run
about 5.5 percent. That is a tremendous source of growth,
particularly for our feed grains and our oilseeds and our
livestock products and our high-value products.
North American Free-Trade Agreement
Senator Cochran. There are some who are suggesting that we
have got some bilateral problems in Latin America. You
mentioned that as a potential growth area. I wonder what your
assessment of the North American Free-Trade Agreement has been
for agriculture, and specifically for some of our commodities
like rice, beef, and others, where some dramatic changes were
predicted for the better. Have those turned out to be
forthcoming? What is the consequence of that agreement on
American agriculture?
Secretary Glickman. Let me just say, by and large, the
NAFTA agreement has been positive for agriculture, particularly
livestock has been an area that has been positive. Now, the
President of Chile is here as we speak. Yesterday he came in
and the President met with him. And then we had a little larger
meeting with the Trade Representative and myself and some other
folks.
It was interesting. The first item mentioned was
agriculture. We have some problems with Chile. One has to do
with wheat and the importation of American wheat. They have
some sanitary and phytosanitary requirements that we think are
unrealistic and unnecessary. Also poultry is another area where
we think the same thing is there.
We told them, both the President and I, said that the
passage of fast-track legislation certainly could have an
impact on agriculture and the ability to believe that they are
taking our commodities will be a helpful factor in getting that
fast-track legislation through. As a part of that, the
President committed to send me to Chile a few weeks after he
goes, in early May, to set up a consultative commission process
on some of these bilateral trade issues with the Chileans.
We are also working with the Argentines along the same way,
where we are trying to resolve some of these specific disputes
that are taking place.
So I think it is pretty good. Let me just mention to you
that during fiscal year 1996, United States agricultural
exports to Canada and Mexico increased by 14.2 percent,
reaching record levels. In the case of Mexico, United States
agricultural exports reached $5 billion in fiscal year 1996, an
increase of 35 percent over fiscal year 1995 and 38 percent
over fiscal year 1993 pre-NAFTA levels. We have projected about
$5.1 billion this year.
We sell to Mexico about 75 percent of its agricultural
imports. Part of that is due to our price advantage.
Imports from Mexico were $3.67 billion in fiscal year 1996,
slightly below the $3.7 billion level for fiscal year 1995.
So, by and large, we have a positive balance of trade with
Mexico, and it is growing as a result of NAFTA. Now, that does
not mean there are not peculiar problems, such as tomatoes,
avocados, and some of the specialty crops remain big problems.
But, by and large, it is positive.
Senator Cochran. There was some indication to me that our
rice industry is having some difficulty, at least the rice
milling industry, because of increased exports of rough rice
from the United States into overseas markets. There is only
about 40 percent operating capacity being utilized of U.S. rice
mills right now because of these increases in exportation of
rough rice.
Is that something that has come to your attention, gotten
to the Secretary's level yet? Is there any policy question
here, or is this just a phenomenon of prices being attractive
in the global market?
Secretary Glickman. Keith, would you respond to that?
Mr. Collins. I would only say that it has been raised. We
have heard about that. As we look at the data, the percentage
of total exports that go out that are rough is still fairly
small, perhaps 15 percent. In fact, they predominantly do go to
Latin America. I have heard of other countries besides Mexico
that get them, too. But I have not specifically heard much
about Mexico recently. We will certainly look at that.
North American Free-Trade Agreement
Senator Cochran. This was to Latin America. It was not just
to Mexico. My information was to Latin America. Most other
countries who grow rice and mill rice export only their milled
rice, as I understand it.
Mr. Collins. Yes, sir.
Senator Cochran. But the U.S. rice mills have access only
to U.S. rough rice. So if the rough rice is going out of
country, they fear that they may not have enough to continue
milling and doing it at a profit. That is the issue, and I just
raised it to see if there was something that could be done and
to make sure you had the information.
The other rice issue that I am aware of, which has been
brought to my attention, involves the European Union [EU].
There is a quota apparently or an allocation of U.S. rice that
has been made under a negotiated agreement. Over $20 million of
U.S. rice could be purchased under this arrangement, but the
U.S. rice industry and the companies that would be providing it
have not been able to work out any arrangement under which that
rice would be sold--like who gets to sell the rice, who gets
the $20 million-plus of new business under this arrangement.
It has also been described to me as something where the
Secretary of Agriculture has a role to play in this. I don't
know whether or not you are involved in trying to work this
out. I am told that you could sign a piece of paper and it
would solve all the problems. I do not know whether it is that
simple or not.
Secretary Glickman. I do not know what that piece of paper
is. But I will try to find it this afternoon. [Laughter.]
The only thing I can tell you is that this is a problem. We
believe the European Union has failed to implement the two rice
tariff rate quotas [TRQ's] that it committed to in 1995. It has
to do with us allocating our portion of the TRQ. But until such
time as they approve that, we are unable to allocate what we
have not used.
And I raised this with my counterpart in the EU. Quite
frankly, I think I got the regulatory runaround on the issue.
So it is a gnawing problem. It has not been solved. And let me
just mention that I plan to seek an interagency meeting on how
to proceed on this issue. I have tried to deal with it on a
bilateral basis with my counterpart in Europe.
Now, part of the problem, I have to tell you, is that the
rice industry is somewhat split on how to allocate the TRQ and
how to allocate the licenses. And the EU is using that split as
kind of an excuse not to open the quota.
Anyway, the ball is in our court, because we cannot hit it
back because the industry kind of will not give us the racquet
to hit it back on yet. So we need some degree of unanimity
among the industry as well. And the Europeans are taking
advantage of this split.
Senator Cochran. There is a fear that if we do not use that
allocation agreement, we are going to lose it. Someone else is
going to end up selling that rice into that market which we had
negotiated for U.S. rice producers. So I am glad to know that
this does have the attention of your office and that you are
working with an interagency group to try to resolve it.
Secretary Glickman. Yes, sir.
Public Law 480, Title I
Senator Cochran. I know that one other potential impact
that could have negative consequences on that and other
commodity industries is the proposed rescission that you
included in the recent submission to cancel some $50 million of
appropriations that we have already approved for Public Law
480, title I. Is this going to have a serious economic impact
on agricultural producers or exporters? And why is that request
being made?
Secretary Glickman. These, of course, are rescissions of
unallocated dollars for long-term sales for market development,
and I would ask Steve to talk a little bit about that budget
item.
Mr. Dewhurst. It is simply a question of having to come up
with some offsets for other things that were in the budget. I
think it is important to understand about title I of Public Law
480 that of the $50 million proposed for rescission, about one-
half consists of money carried over from prior years in that
program, and the other one-half was a reserve maintained in
that program. The rescission does not affect the allocations
that were already announced. If I recall, about $200 million in
program that was announced earlier this year is not affected by
the rescission. So it is a constraint, in a sense there would
be no new commitments, but it will not hurt commitments that
were already made.
Senator Cochran. There are other questions on the subject
of the Public Law 480 program which I will submit and ask that
they be answered for the record, and the nutrition programs, as
well. I notice that there is an assumption in the budget
submission that there will be legislative changes made in the
Food Stamp Program, for example, which would affect the amount
of funding that would be required by that program.
Senator Leahy made a very compelling argument against
trying to rewrite the farm bill when this legislation gets to
the floor, or in any other way, to try to reverse decisions
that have already been made on agriculture commodity programs.
Well, it seems to me that that argument can also be made for
other programs that come under the jurisdiction of the
Agriculture Committee. We went through a very long and
difficult process to legislate changes under welfare reform,
and some of those have affected the requirements for funds in
the budget submission that is before the committee today,
specifically, the Food Stamp Program.
I do not know how the committee is going to view these
proposals, but my reaction is that we are not going to go back
in and try to relegislate the welfare reform program. So the
assumptions that are being made may be either wishful thinking
on the part of the administration or an effort to play politics
with those who might be pleased to hear that the administration
is requesting more money than we can lawfully spend under the
Food Stamp Program, and that is what it amounts to. We do not
have the legislative authority to change the program and to
provide benefits to those that are not entitled to benefits
under the law.
Also, I think we are going to be hard-pressed to find the
dollars in the discretionary programs to keep up with last
year's levels of funding, and the administration comes in and
asks for increases in the discretionary levels of funding,
knowing good and well we cannot appropriate at that level. It
may look good to somebody out there who is pleased that the
administration is asking for increases, but everybody ought to
realize that increases are not likely to be made available
simply because of the constraints of the budget process or
legislation that has already been passed and signed by the
President. He signed these bills when they were before him, and
is now coming in asking for changes in specific areas to permit
the expenditure of more funds.
We will look at those. I am not saying that we will not. I
think we have an obligation to consider anything that you
submit for our consideration, and I am going to make every
effort that we do that, and that we do that in a fair-minded
way.
Secretary Glickman. Senator, could I just make one comment?
Senator Cochran. Yes.
Secretary Glickman. Obviously, this is part of a
Governmentwide welfare reform initiative that we have a piece
of. The piece, of course, relates to two things, and one is
ameliorating a bit the work requirement for able-bodied people
from 18 to 50. I think right now you can be on food stamps no
more than 3 months in any 3-year period of time, and I think
the President's proposal is 6 months out of every year. The
other part had to do with legal immigrants. That is an area
where there has been, frankly, some bipartisan interest in
trying to soften that blow a bit.
So we put it in here because it is part of the general
proposal, and I do not know how much we will be able to get
done, whether it is part of the reconciliation process or
however else it is handled. Obviously, if these proposals get
enacted we have got to find the resources to do it as well. But
we felt like we needed to put it in there.
Research
Senator Cochran. The issue of research has been brought up
already. Senator Burns and others talked about various aspects
of research. I know Senator Byrd mentioned the ARS National
Cool and Cold Water Aquaculture Center in West Virginia. We are
very happy that we are constructing at Stoneville, MS, the
National Warmwater Aquaculture Center, and I was pleased to see
the budget contains funds to conduct research at that site. I
assume from that that the administration continues to support
the completion of that project on schedule.
Secretary Glickman. That is correct.
Senator Cochran. I might say that this is a very impressive
industry in terms of its economic impact in our State, and on
the entire country. It is of critical importance that we do the
research necessary in disease analysis and productivity issues.
This is a new industry. No one really can predict what the
problems are going to be, but we know of some already, and
Mississippi State University is engaged in some very important
research, and at this center, too, in Stoneville. It will be a
clearinghouse for all research in this area, and I am very
impressed for the future of the industry that we are going to
have this kind of resource center.
There are other research activities on college and
university campuses, as well as federally owned facilities
under the jurisdiction of ARS, that are doing important work. I
do not know of any other area where we have to continue to be
vigilant and thoughtful in the way we allocate our resources.
But that is an area where we continue to be required to spend
substantial sums, in my judgment, to ensure the vitality and
health of American agriculture and the nutritious aspects of
food and other commodities that are produced on our farms. So
we will be working to review all of those requests in your
budget on those subjects.
Extension Service
I am disappointed to see that there are what I consider to
be substantial cutbacks in funds for the Extension Service in
this budget. I am not going to try to get you to explain why or
argue for those here at this meeting. But I do not know of many
programs that are more popular in the Congress than the
extension programs are.
There are a lot of people who derive benefits from
extension activities in the small towns and rural communities
all across America, and particularly in those States that are
more rural than urban. The Extension Service is a very
important Government activity. Without it, I do not know how we
would get the information and the education benefits and the
other activities extension provides to the people in these
rural communities who derive these program benefits. So we will
look very carefully at that request, and I am not optimistic
that we will be able to sell a substantial reduction in
extension to the other members of this committee.
Tax Reform
And on the subject of tax reform, I am hopeful that the
Department will get involved in helping to argue within the
administration and to the President that he should support some
of these initiatives that are coming from Congress now to
reform our tax system to help ensure that we have profitability
on our farms and that we are able to maintain an owner base out
there committed to production agriculture. It is less and less
attractive for young people to stay on the farm and try to make
a living farming. We now have an estate tax law that is
confiscatory. It hurts those most who have been frugal, who
have worked hard, who have saved, who have tried to preserve
the family farm. To then take the farm away from them or force
them to sell it to pay Federal estate taxes is to me a very
wrong-headed national policy.
We have had 2 days of hearings in the legislative committee
on the subject of tax reform, specifically estate tax reform
and capital gains tax treatment of sales of our farmlands.
There are other issues--income averaging, and just recently we
had to fight like crazy to get a change in policy by the
Treasury Department on the subject of deferred contracts, where
farmers were being taxed in 1 year when they had not even
received payment on contracts to sell an agriculture commodity.
I do not know of anything that made some farmers madder in my
State than that decision.
Well, we have got a 1-year reprieve now, but I hope that
the Department of Agriculture will get involved in helping to
encourage reforms and decisions on Federal tax policy that will
benefit production agriculture and those engaged in it.
Secretary Glickman. I would say on that last issue we were
actively engaged with Treasury to get this--well, it was on the
alternative minimum tax issue result. And let me just say this:
You know, again I bring my prior career with me in this thing.
I believe that you are correct that we need to be identifying
those mechanisms in a general way which keeps family-sized
agriculture alive and encourages young people to stay in
agriculture.
I am not endorsing any specific tax proposals, because that
is part of a bigger package and relates to revenues and deficit
reduction and other kinds of things. But I do agree with you
that it is appropriate for us to look at the Tax Code as part
of the total picture of how we can keep people in agriculture.
And we are engaged in that, I want to assure you of that.
Senator Cochran. Senator Specter.
Green Bay Cheese Exchange
Senator Specter. Thank you very much, Mr. Chairman.
I join in welcoming Secretary Glickman and his
distinguished team to this hearing. I had been here earlier,
and Senator Cochran said you would run until about this time. I
hope I have not delayed anybody. I think from the tenor of the
questioning when I came in, you are still hard at work on very
important subjects.
I thank you very much, Mr. Secretary, for coming to
northeastern Pennsylvania a couple of weeks ago and bringing
Mr. Collins and others on a very serious problem of milk
pricing for the farmers nationally, but especially in
northeastern Pennsylvania, where the price of milk has dropped
precipitously in the immediate past. And I thank you for the
attention which you have given to the issue of pricing and the
question as to whether the price is artificially low because of
the calculation of the price of cheese as it is impacted by the
Green Bay Cheese Exchange.
The information which I got from Mr. Collins and you about
an increase of 10 cents on the price of cheese would amount to
$1 per hundredweight increase for milk, and the meeting which
we had was a very, very important meeting. And obviously, I
know about the consequences of it more than you do unless your
clipping service is as good as mine.
Secretary Glickman. I saw the first day of clippings, but
that was it.
Senator Specter. I have an instinct that you do not have
the clipping service in northeast Pennsylvania as good as I do.
If you do, your clipping service is extraordinary.
Secretary Glickman. If we do, I am spending too much money
on clipping services. [Laughter.]
Senator Specter. Knowing you, Mr. Secretary, I would say
your talent is extraordinary, but I would tell you that it had
a very, very beneficial impact to bring the Secretary up, and I
had a request by Tobyhanna to bring the Secretary of Defense
up. Everybody in the area now wants a Secretary for their
relevant problem, so you have set quite a standard for me in
northeastern Pennsylvania. [Laughter.]
Milk Pricing Reevaluation
As you know, the sense-of-the-Senate resolution was passed
83 to 15 encouraging a reevaluation of the price of milk based
upon the formula for cheese, and my first inquiry to you is
what have you found on a survey of the cheese market
nationally?
Secretary Glickman. Well, I am going to ask Keith to
respond. I would say that the trip to Pennsylvania was a
particularly useful one for me, and I think for Mr. Collins, as
well. The size of the crowd was unexpected. We had 500 to 600,
700 people there.
Actually, as you know, a couple of weeks before the meeting
we started the process of evaluating alternatives. We have
gotten about 80 comments in so far, and they keep coming in
about five or six a day. The expiration date for that is about
a month from now. However, the team is in the process of trying
to find options, and I would like options all the way from the
development of the futures market to our own self-determination
of price without going outside, which is the way we used to do
it, by evaluating processors.
So perhaps you might want to go through that.
Mr. Collins. We are really proceeding on two fronts. One is
to deal in the regulatory sense with our basic formula price
and replace the cheese exchange.
The second is the point of your question, to collect cheese
price information.
National Cheese Exchange
Senator Specter. What is the first front again, Mr.
Collins?
Mr. Collins. To deal with the potential for replacing the
National Cheese Exchange price in the formula that we use to
construct what is called the basic formula price. That is a
question that is bound up in the potential for a formal
rulemaking and not formal rulemaking. As you know, the sense-
of-the-Senate resolution asks us to proceed using the
Secretary's authorities consistent with the law. I would say
consistent with the law does have some impact on us because we
do have another dairy policy that has been litigated recently
where it has been suggested that we acted in an arbitrary and
capricious way. We know that whatever we do with respect to
cheese prices and the basic formula price, we want it to be
able to withstand being sued.
So we have gone through this comment period that the
Secretary mentioned. The comments that we are receiving, about
80 of them in roughly a 2-week period, we are sorting through
them to look for evidence on two fronts. The first would be
flaws with the Cheese Exchange price itself, of which there
already is a body of evidence from the academic community and
elsewhere. The second then is trying to determine what would be
a good replacement for the National Cheese Exchange price.
If we are going to replace it using the Secretary's
discretionary authority and withstand a court challenge, we
would have to have something that clearly remedies the defects
that we identify in the National Cheese Exchange price. So that
is the process we are going through with the comment period and
our own internal analysis.
The second front is to collect cheese price information
directly from the industry. And on that issue we have delayed
our collection effort by several weeks at the request of the
cheese industry. They asked to come in and meet with us because
they were concerned about the approach we were using to collect
the information. We met with them a couple of weeks ago, and we
are going to proceed next week. We were going to proceed in the
first week of February, but we got delayed. We are going to
begin in the first week of March, a national effort to collect
cheese, mainly because we wanted to have an opportunity to
respond to the cheese industry.
Senator Specter. A national collection effort on cheese
prices?
Mr. Collins. On cheese prices, yes, sir. We do not want to
collect cheese.
Secretary Glickman. The other thing, of course, is working
with the Coffee, Sugar, and Cocoa Exchange, which we are still
doing, to try to deal with this issue of a program either of
futures or options markets to somehow have a definable futures
price out there.
Mr. Collins. Also as a possible successor to the National
Cheese Exchange itself. The cheese industry would like to
relocate or change, close that exchange, open a new one, and we
have offered our resources to help whatever exchange might want
to start a cash market for cheese.
Secretary Glickman. In doing so there may be a need for
some appropriated funds in some of these areas for us to help
do that. We will talk to you about it. Particularly in the
options area. But as you know, we used to set this formula
price differently in years past, and we did not use the Cheese
Exchange before. There are alternative methods of doing it. One
of the things we are exploring is to go back to the way we did
it before. I do not know whether it will have much of an effect
over the long-term price of the basic formula price, but there
may be less volatility using that formula, and that is
something that they are looking at right now, as well.
I want to get away from that market, as I told you before,
and I told Senator Kohl when he was here, the nature and
thinness of that market is unacceptable because cheese is such
a big part of the setting of milk prices, through the basic
formula price. But I was sued recently in the area of something
called the Northeast Dairy Compact, where it was argued that I
made a decision that was not based on a complete record. So
that case is still in litigation, and I cannot really comment
much further on that. I have got to make sure this record is
complete so that whatever we do is defensible it is going to
have a monumental economic impact; but, we are moving in the
right direction and I know your interest in it. In fact, your
interest has got this thing moving from second gear to first
gear.
Senator Specter. First gear, Mr. Secretary?
Secretary Glickman. I am sorry, third gear, fourth gear,
whatever the fastest gear is, Senator Specter. [Laughter.]
Senator Specter. Mr. Secretary, we are interested in
overdrive. [Laughter.]
I am a little surprised, and I had--this is as good an
occasion as any to make the personal reference. Your
grandfather, Jay Glickman, would be surprised to have the gears
wrong.
Mr. Chairman, my compliments may be excessive to the
Secretary or may not be excessive to the Secretary, but I have
a deep bias in his favor because my father and his grandfather
did business together in Kansas in the thirties. And their
business activities included Jay Glickman, who was in the junk
business and my father was in the junk business.
Secretary Glickman. We now call it the recycling business.
[Laughter.]
My father used to say if it was junk it would not have sent
you to college and law school.
Senator Specter. I call it the junk business. It sent me to
law school, and it was a tremendous incentive to get out of it.
[Laughter.]
National Cheese Exchange
Without going into any more detail except to say there were
big trucks involved, my father had a big truck which I learned
how to drive at an early age, and I knew the difference between
first and second gear. [Laughter.]
I do not think Secretary Glickman spent enough time in the
business. [Laughter.]
Secretary Glickman. Duly noted. [Laughter.]
Senator Specter. But on the subject of when, Mr. Secretary,
as you know, my concern about immediate action, we were there
on February 10, and I was hopeful that we would have change by
the 11th, and then by the 14th--we got the resolution passed on
the 13th, and I know that you are doing collateral work on the
comments, but as already noted, there is a collateral way for
you to do it, and that is on your unilateral authority. And I
understand that you can be sued all the time on the grounds of
arbitrary and capricious. That is the last refuge of the
plaintiff on trying to upset something, to make a contention
that it was arbitrary and capricious, because there is nothing
which an administrator does that can withstand being arbitrary
and capricious. It is easy to say, but very, very difficult to
prove.
Secretary Glickman. Well actually, in the one case it has
basically been stated that I was arbitrary and capricious. I
have been given an opportunity to become unarbitrary and
uncapricious. Part of it has to do with this horrendous
complexity of dairy pricing, which makes it difficult to act as
clearly as I can act in corn and wheat and soybeans and other
things.
I do not want this thing to delay, and I am not worried
about getting sued. I am worried about having the record there
so I can prevail. We are going to get sued probably no matter
what we do.
Senator Specter. Well, it is easy to allege arbitrary and
capricious. It just takes one line on the typewriter. But it is
very, very hard to prove in the litigation field and very
difficult to sustain that. And I know you are looking for an
evidentiary base, and my question, maybe to Mr. Collins, is how
far have you gotten on finding other pricing which would
suggest a difference with what the Cheese Exchange has set as
the price?
Mr. Collins. To be quite frank, not very far at all. The
difficulty is that we are trying to determine a price of
cheese. There is only one organized market in the United States
in which a price of cheese is determined. Virtually all cheese
contracts that take place between private buyers and sellers
off of that market use that market as a benchmark. So where do
you go for new information other than that market? That is the
dilemma that we have found.
We also have many people who are concerned about this
market and criticizing this market, but the criticisms are not
coming from the participants in the market, neither the buyers
nor the sellers, who both believe that they have a market that
is representative and accurate. In that kind of an environment,
it has been very tough for us to find a clear-cut alternative
that is superior in representing supply and demand for cheese
in the United States. So we are continuing to look, but it has
not been easy.
Minnesota and Wisconsin Price
Secretary Glickman. Now, I would say before the Cheese
Exchange was used, there were alternative methods out there
that we used, and perhaps you might explain what those methods
were. So it is not as if there are not other options.
Mr. Collins. Yes; what the Secretary is referring to is
that in the past, prior to May 1995, we used to survey
processors of grade B milk in the States of Minnesota and
Wisconsin and ask them what they paid for milk and what they
thought they were going to pay for milk. And that was the price
that we used to set the absolute floor for all the different
classes of milk in the United States.
Secretary Glickman. Called the M-W price.
Mr. Collins. It was called the M-W price. It did not
involve cheese prices at all. It was what was called the
competitive pay price for milk.
In May 1995, however, is when we switched to using both a
competitive pay price and an adjuster. The adjuster utilizes
the National Cheese Exchange price.
Secretary Glickman. Now, why did we do that?
Mr. Collins. We did that because----
Secretary Glickman. And I am interested in knowing, too.
Mr. Collins. Our statisticians who collect and tell us what
that price is became increasingly convinced that they could not
report a reliable and accurate price. The number of grade B
plants was waning. There would be fewer and fewer of them, and
the ability to get grade B plant producers to tell us what they
thought they were going to pay for milk in that month was just
falling apart. They were not reporting. So our statisticians
told us they thought that the price series had become
inaccurate. That is why we held a formal hearing. We held a
national hearing and adopted the process we have now using
formal rulemaking.
Senator Specter. We have a vote at 12:30, and I know the
chairman has been very patient and this is a very complex
subject. Mr. Chairman, I wonder if we might explore the
possibility of having a separate hearing on this subject. I
know how crowded your schedule is. If I have to take the lead
to preside, if the chairman cannot do so, this is a subject
which I would like to move on before we leave for the recess,
because there are a lot of people beyond Pennsylvania who are
interested, and I wonder if we might not be able to put
together such a hearing in the next 2 or 3 weeks.
Senator Cochran. Senator, let me just say that I would be
glad to make every effort to get that done. I think that is a
good idea. It is timely. People are worried about what is going
to happen. And in the South, we want to be sure it is fair to
our region, too. Just because we had not thought up the
amendment that you thought up or pushed on the floor as
successfully as you did, we have a big stake in this too.
Green Bay Cheese Exchange
Senator Specter. Well, Mr. Chairman, the amendment that I
pushed, or resolution that I pushed, arose out of my
discussions with the Secretary and Mr. Collins and we were
working on this. And this is the kind of an issue that comes to
a head, and I have a sense that if we scheduled a hearing in 2
or 3 weeks it would bring a lot of people together.
I had moved to have a hearing on the Antitrust Subcommittee
on that Friday, and I did not do so for a number of reasons.
But it created a lot of interest in a big hurry about having an
antitrust hearing as to whether there was collusion or some
impropriety in the Green Bay Cheese Exchange, and when a
hearing is scheduled there is a lot of focus of attention and a
lot of these questions would then be answered. So I thank you
for your willingness to do that, and we will be eager to set
that up.
Senator Cochran. I may ask Brett Favre to be the leadoff
witness. He is the quarterback of the Green Bay Packers, and he
is from Mississippi. [Laughter.]
Senator Specter. We would be sure to have a balanced view.
[Laughter.]
Senator Cochran. Well, Senator, thank you very much.
Senator Specter. Thank you very much.
Submitted Questions
Senator Cochran. Mr. Secretary, I have other questions, and
other members do as well. Senator Faircloth and Senator
Coverdell have asked me to submit questions for your response,
which we will do. We hope you will be able to answer those, and
the other questions that other members might submit as well, in
a timely fashion.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]
Questions Submitted by Senator Cochran
county office closures
Question. Mr. Secretary, it is my understanding that the
President's budget assumes the elimination of 1,000 Farm Service Agency
(FSA) county office employees during fiscal year 1998. Further, over
the following four fiscal years, the budget assumes the elimination of
an additional 4,000 county office employees. The President's budget
assumes that 5,000 county employees will be cut during fiscal years
1998-2002. Is this correct?
Answer. In the fiscal year 1998 Budget proposal, a reduction of
2,119 staff years, of which 269 are Federal staff years and 1,850 are
non-Federal staff years, is projected for fiscal year 1998. Current
fiscal year 1997 staffing levels are 6,136 Federal staff years and
11,729 non-Federal staff years. An additional 5,000 non-Federal staff-
year reduction is anticipated from fiscal year 1999 through fiscal year
2002, so the county office reduction is actually 6,850 rather than
5,000.
Question. If the information that I have is true, then by fiscal
year 2002, the budget proposes that we will have reductions in federal
FSA employees of 21 percent since fiscal year 1993, and reductions of
county office employees of over 67 percent over the same period. Why
are there disproportionate cuts in county office employees?
Answer. The FSA and other USDA agencies have made significant
staffing reductions over the past several years. From fiscal year 1993
to the current fiscal year 1997, FSA reduced total staffing 21 percent.
These reductions reflect an overall 19 percent reduction in Federal
staff years, including 27 percent at Headquarters, and a 22 percent
reduction in non-Federal staff years.
Fiscal year 1998 and the years through fiscal year 2002 reflect
major proposed decreases in FSA non-Federal staff years. The fiscal
year 1998 Budget proposes a reduction of 2,119 staff years for fiscal
year 1998, of which 269 are Federal staff years and 1,850 are non-
Federal staff years. It should be noted that although non-Federal
staffing is being reduced by the programmatic impacts of the 1996 Act,
the projected fiscal year 1998 Federal workforce of 5,877 includes
approximately 2,265 employees at the county level performing
Agricultural Credit program workload for direct and guaranteed loans.
Furthermore, there are an additional 1,463 Federal FTE's at the State
office level, including personnel that support farm credit activities
as well as CCC activities, that perform program oversight, supervisory,
and other support functions. In addition, over 260 Federal staff years
are dedicated to providing common administrative support functions to
the Foreign Agricultural Service and to the Risk Management Agency
since, under USDA's reorganization, they no longer have administrative
support personnel of their own. There is concern as to the magnitude of
these reduced FSA county staffing levels by 2002 relative to projected
Agency workload beyond 1998 because we want to assure service delivery
to producers.
Question. It was my understanding that the reason the Department
proposed a transfer of $51 million in unused Conservation Reserve
Program (CRP) balances to FSA salaries and expenses to finance buyouts
in fiscal year 1997 was to avoid massive layoffs in the future. How do
you propose to prevent reductions in force in the future years as
buyouts become less attractive to employees and more expensive to
taxpayers?
Answer. You are correct that these funds were needed in order for
FSA to achieve the staff-year reductions estimated to be necessary in
early fiscal year 1997 to downsize to the level appropriate to the
anticipated workload of the 1996 Act and to stay within available
fiscal year 1997 funding resources. Without this transfer to cover
separation costs, the Agency would have been forced to conduct a much
greater RIF during fiscal year 1997.
FSA does intend to continue to offer buyouts in an effort to
minimize involuntary separations. However, not all reductions can be
achieved through buyouts since the number of remaining buyout
candidates is insufficient to meet the estimated 2,119 staff year
reductions included in the fiscal year 1998 budget. It is also not
likely that FSA will avoid future year reductions-in-force, given its
budget targets through fiscal year 2002.
Question. Are you proposing reductions in force, if necessary, to
reach these staff-year ceilings?
Answer. Yes, after FSA offers a voluntary buyout, then we plan to
approve the use of RIF's to meet reduction targets.
Question. Has the Department asked the State Directors of FSA to
provide a list of proposed county offices that could be closed in each
of their States? If so, please provide to the committee the lists.
Answer. No specific plans or lists have been approved by my office
concerning the number or location of FSA field office closures. Any
preliminary office closing numbers reported reflect internal agency
contingency planning and are not approved USDA plans. We intend to
consult fully with Congress regarding any office closures before any
actions are undertaken.
emergency conservation program/disaster contingency fund
The Administration proposed no funding for the Emergency
Conservation Program (ECP). Instead, a new $5.8 billion contingent
reserve for emergency funding requirements for various disaster
assistance was proposed. I understand that this fund would be available
to the President for disaster relief purposes and would be limited to 7
disaster assistance program.
Question. Does the Administration have a problem with the way
disaster assistance has been handled by Congress? Why should we set up
a contingency reserve fund?
Answer. While the Congress has been willing to respond to the needs
for major disaster assistance, it has not always been able to enact
measures to provide assistance in the most timely way. Even the most
responsive action by Congress through supplemental appropriations
following a disaster may not be timely if the need arises when the
Congress is not in session. While some funds for non-emergency work
related to disaster assistance are generally provided (and are
requested in this budget) through regular appropriations, there is no
way to truly assure a timely response to unanticipated disasters
without a contingency funding mechanism.
The President's proposal will allow for the use of the contingency
reserve funds through specified disaster assistance programs based on
actual need. This will allow for appropriate available programs to be
used to respond to a particular disaster. The proposal does provide for
a 15-day period before release of funds after the President notifies
the Congress. This will allow the Congress time to respond, but also
assures that the Government will be able to assist communities stricken
by a natural or other disaster in a timely way.
emergency conservation program/disaster contingency fund
Question. What assurance would there be that USDA's emergency
conservation and watershed prevention needs would be addressed, and not
under funded to provide more funding for the five other disaster
programs competing for contingency funds?
Answer. In our view, the $5.8 billion proposal should be more than
sufficient to handle all the Federal emergency work that might be
needed by any of the disaster programs competing for contingency funds.
It certainly would not be this Administration's intent to under fund
one emergency account at the expense of another. Rather, having a
central contingency reserve fund will enable Federal agencies,
including FSA and NRCS, to better prepare and respond more quickly to
natural disasters.
contingency fund
The Administration proposed no funding for the Emergency
Conservation Program (ECP). Instead, a new $5.8 billion contingent
reserve for emergency funding requirements for various disaster
assistance was proposed. I understand that this fund would be available
to the President for disaster relief purposes and would be limited to 7
disaster assistance programs.
Question. Why didn't the Administration include APHIS emergency
activities as an eligible activity for the emergency disaster
contingency fund?
Answer. The Department already has authority to fund extraordinary
emergencies. We usually use the Commodity Credit Corporation (CCC)
funds for this purpose.
revenue insurance pilot program
Question. Mr. Secretary, you have proposed to make revenue
insurance available nationwide. Currently, revenue insurance is a pilot
program for certain crops in specified states. What has been the
participation rate in this pilot program?
Answer. The Federal Crop Insurance Corporation developed the Income
Protection--IP--Plan of Insurance. For the 1996 crop year, IP was
available for corn, cotton, and spring wheat in 30 counties. For 1996,
about 998 IP policies were purchased, covering about 218,000 net acres
with total premiums of about $3.4 million. For the 1997 crop year the
IP pilot program was expanded and is available for corn, cotton, grain
sorghum, soybeans, spring wheat, and winter wheat in 159 counties. Data
for the 1997 crop year will not be available until late in the calender
year.
Under the authority of the Act, FCIC approved the Crop Revenue
Coverage--CRC---and Revenue Assurance--RA plans developed by the
private sector. For the 1996 crop year, CRC was available for corn and
soybeans for all Iowa and Nebraska counties. For 1996, about 91,000 CRC
policies were purchased, covering about 10.2 million net acres, with
total premiums of about $139.8 million. For the 1997 crop year, the
availability of CRC for corn and soybeans includes all counties in the
States of Colorado (corn only), Illinois, Indiana, Iowa, Kansas,
Michigan, Minnesota, Missouri, Nebraska, Ohio, Oklahoma, South Dakota,
and Texas. In addition, for the 1997 crop year, CRC was made available
for:
Cotton
Arizona--all counties
Georgia--all counties
Oklahoma--all counties
Texas--selected counties
Grain sorghum
Colorado--all counties
Nebraska--all counties
Oklahoma--all counties
Kansas--selected counties
Missouri--selected counties
South Dakota-selected counties
Spring wheat
Minnesota--all counties
Montana--selected counties
North Dakota--selected counties
Winter wheat
Kansas--all counties
Michigan--all counties
Nebraska--all counties
South Dakota--all counties
Texas--all counties
Washington--selected counties
FCIC approved the RA plan of insurance for corn and soybeans in all
Iowa counties for the 1997 crop year. CRC and RA plans of insurance
will only be available in counties if an existing multiple peril crop
insurance program is also available for the crop.
Question. What are the estimated losses for this program in the
pilot stage?
Answer. As of March 8, 1997, reinsured companies had reported
losses of $48.5 million for Crop Revenue Coverage for corn and soybeans
in Iowa and Nebraska. The overall program loss ratio was 0.34. Losses
paid to producers who purchased coverage other than catastrophic under
the Actual Production History yield-based plan had been paid $25.7
million, for a loss ratio of 0.29. By this time, reporting of losses
normally is over 95 percent completed.
On that same date, losses of $55 thousand and $178 thousand had
been reported for corn and wheat, respectively, under the Income
Protection coverage plan. The respective loss ratios were 0.07 and
0.13. No losses had been reported for cotton under this revenue
insurance plan. Since Income Protection is sold only in specific
counties and not entire states, a comparable loss ratio for the APH
coverage plan is not readily available.
nationwide expansion of revenue insurance
Question. What is the estimated cost to extend this pilot program
nationwide?
Answer. The Administration is seeking legislative authority to
offer revenue insurance nationwide. Presently, the Federal Crop
Insurance Act authorizes only a pilot program of revenue insurance
under direct Federal sponsorship. The plan or plans that may be offered
are not yet known. Presumably, Crop Revenue Coverage would be one such
plan. However, it probably does not meet the needs of all producers.
Thus, some alternative plan similar to Income Protection or Revenue
Assurance may be needed.
Most of the additional cost is expected to be due to greater
participation induced by products that better meet producer's needs
than does the standard yield-based coverage. To date, subsidies have
been limited to the amount that would be paid if the producer had
purchased the Actual Production History (APH) coverage plan. This cost
generally is less than the APH plan for IP and RA. For CRC, the cost of
the producer premium subsidy is the same as the APH plan, and an
average of 9 percent extra is paid for administrative and operating
expenses on the portion of the CRC premium that exceeds the premium
that would have been paid under the APH plan. In general, the
reimbursement to reinsured companies is slightly more than 2 percent
greater than if the policy had been sold under the APH plan rather than
CRC.
The cost thus depends upon several factors: the increase in total
participation and the mix of products that producers purchase. Higher
sales of CRC will increase costs; greater market penetration by
products such as IP and RA will reduce costs.
For the purpose of the budget, FCIC assumed an increase in total
participation on the order of 5 percent. It further assumed that most
of the increase would be in CRC. To offset the costs associated with
these assumptions, FCIC proposed that the statutory loss ratio target
be reduced and made other program modifications. A part of the costs is
offset by changes in other mandatory programs. The proposal is budget
neutral.
crop insurance safety net
Question. Some farmers have expressed concern that no ``safety
net'' exists for those that can't afford crop insurance or that no crop
insurance coverage exists for a specific crop. Is there some way to
address this concern?
Answer. Free catastrophic insurance coverage (50 percent insurance
coverage indemnified at 60 percent of the maximum price) is available
wherever crop insurance is offered. Producers are responsible for a
minor $50 processing fee for each crop. The fee is waived in instances
when limited resource producers can not afford to pay it. Where crop
insurance is not available for a crop, a noninsured assistance program
provides coverage equivalent to catastrophic insurance coverage at no
charge when a county suffers a widespread loss. Other alternative
programs, such as the group risk plan, provide low cost coverage
alternatives in many areas.
administrative expense reimbursements
Question. Mr. Secretary, when the administration proposed and the
Congress enacted crop insurance reform, the savings from emergency ad
hoc disaster relief payments provided through appropriations acts were
used as PAYGO offset.
Now, for fiscal year 1998, the Administration's request indicates
that this Committee is facing a new discretionary funding increase of
$203 million to reimburse private companies for crop insurance delivery
expenses. This kind of supports my position at the time we enacted crop
insurance reform, that it sounds too good to be true--in terms of
avoiding additional costs in the future.
Why weren't the paygo emergency ad hoc disaster savings sufficient
to fully offset the costs of this proposed program reform at the time
it was enacted?
Answer. Prior to fiscal year 1995, the administrative and operating
expenses associated with program delivery were paid from discretionary
funds. The administration's budget for fiscal year 1995 requested a
discretionary appropriation for this purpose. Continuation of the
discretionary appropriation at baseline levels was assumed in the
reform package. The appropriations committees did not fund this
request. The authorizing committees were able to use paygo emergency ad
hoc assistance savings to fully fund delivery expenses for fiscal years
1995 and 1996 and about 30 percent such expenses in fiscal year 1997.
All such expenses for fiscal year 1997 ultimately were funded under the
mandatory baseline with savings from other programs identified during
the 1996 revisions to the Farm Bill. Under the reform package as
enacted, approximately one-half of delivery expenses was to be paid
from discretionary funds beginning in fiscal year 1998.
The request for $203 million for fiscal year 1998 is consistent
with the original reform proposal made by the administration and with
the law as enacted. It is a request to restore the discretionary
baseline that existed in fiscal years 1994 and prior.
Question. Since this cost was considered to be mandatory and is now
discretionary, what would be the impact if the requested funding
increase is not provided?
Answer. The General Accounting Office--GAO--recently concluded an
audit of expenses associated with the delivery of the crop insurance
program. The GAO found that the current reimbursement rates exceeded
delivery expenses. This suggests that there are opportunities to
achieve savings--$203 million to $150 million--in the reimbursements
paid to companies without having an adverse effect on program delivery.
However, if the amount requested from the discretionary account for
administrative expense reimbursements is not provided, this would
drastically impact the reinsured companies and their ability to deliver
crop insurance products. If Congress were to appropriate anything less
than the $203 million, we would have to negotiate with the companies on
how that money will be allocated. There is no other alternative in
place.
Question. If an increase of $203 million is required for fiscal
year 1998, what additional discretionary funding will be required under
current law in future fiscal years?
Answer. The $203 million increase in discretionary funding for
fiscal year 1998 is primarily due to the transfer of responsibilities
and funds for the payment of sales commissions of agents. Consistent
with the Federal Crop Insurance Reform Act of 1994, as amended, no
amount can be paid from the insurance fund for sales agent commissions
for the years 1998-2001. Under current law, it is estimated that in
fiscal year 1999, the total request for discretionary funding will
actually decrease, due to an estimated decrease in premium. For fiscal
year 2000--FY 2007, it is estimated that premium levels will
continually rise, therefore, slight increases in the funding requested
for sales commissions of agents would occur. The amount of funding
required for Administrative and Operating Expenses are only expected to
increase due to inflation and pay cost increases.
revenue insurance
Question. The Chairman of the Senate Agriculture Committee, Senator
Lugar, has raised the question about the taxpayer burden of expanding
crop revenue insurance. While it is desirable for producers to be able
to purchase additional revenue protection, to what extent does the
Department believe a Federal subsidy is required to make this
commercially viable?
Answer. For many years, public policy had provided a 100 percent
subsidized revenue protection plan to agriculture under the target
price system. This subsidized program was eliminated under the Federal
Agriculture Improvement and Reform Act of 1996. The issue now is to
define the safety net that will be provided to agriculture in place of
this program, and the extent to which it will be subsidized.
The issue of ``subsidization of revenue insurance'' must be
carefully defined to assure that producers are fairly treated relative
to the yield-based program and to assure there are no unintended
consequences. There are many forms of revenue insurance. Many cost less
than the standard yield-based coverage due to the tendency of prices
and yields to change in different directions--i.e., low yields tend to
be associated with high prices and vice-versa. The cost can be greater
in areas having little benefit from this ``natural hedge.'' One form of
revenue insurance--Crop Revenue Coverage--always costs more than the
standard yield-based coverage. This is due to the ``replacement cost''
feature; that is, payment of lost production at the higher of the
planting period price or the harvest period price. Because of this
feature, Crop Revenue Coverage always will pay a greater indemnity than
the standard yield-based coverage and therefore requires a higher
premium.
Under current law, the subsidy to the producer for the premium used
to determine the loss ratio is limited to the amount that would be paid
had the producer purchased yield-based coverage. The subsidy for
administrative and operating expenses of reinsured companies for
products such as Income Protection and Revenue Assurance has been
limited similarly. Only Crop Revenue Coverage has a higher cost for the
administrative and operating expenses of reinsured companies, and that
is limited to a small percentage (currently 9 percent, subject to more
analysis of actual costs for delivery of this product) on the portion
of the premium that exceeds the premium due under yield-based coverage.
The principal cost associated with expansion of revenue coverage is
due to increased participation as producers respond to products that
may meet their needs better than the standard yield-based coverage.
This is not a subsidy of revenue insurance per se since subsidy would
be authorized under the law if these producers had purchased the yield
based coverage. The only additional subsidy that can be regarded as due
directly to revenue insurance is the small additional amount paid on a
product such as Crop Revenue Coverage.
Current treatment of the different revenue policies creates
inequities among them in terms of compensation for delivery expenses.
Consider, for example, a policy of Revenue Assurance that generates 80
percent of the premium of yield-based coverage. This policy would
generate 20 percent less compensation for delivery expenses. The
frequency of loss adjustment may be slightly lower under such a policy
than under the standard yield-based coverage, but the difference does
not equate to 20 percent. Allowances for delivery expenses of Crop
Revenue Coverage always will exceed the yield-based coverage. Such
discrepancies may have the unintended consequence of encouraging
greater efforts to market higher priced products.
funding of sales commissions of agents/delivery expenses
Question. The Administration is proposing legislative changes to
reduce the reimbursement rate for delivery expenses, which I understand
would lower the discretionary requirement from $203 million to $149
million. It is also proposing to make a portion of the overall
reimbursement rate, not just the sales commission portion,
discretionary and subject to appropriations. What would be the impact
of this latter proposed change on discretionary appropriations
requirements in fiscal year 1998 and future years and what is the
rationale for making an increasing portion of these costs
discretionary?
Answer. The 1998 budget includes an Administration proposal to
reduce the administrative expense reimbursement paid to reinsured
companies. As you know, under current law, the sales commissions have
been paid by the FCIC Fund, which is a mandatory spending account,
although still subject to appropriation.
However, current law requires that the sales commissions be treated
as discretionary spending beginning in 1998.
The Department of Agricultures's (USDA) proposal does not specify a
particular amount to be paid for sales commissions but reduces the
overall reimbursement rate used to determine administrative expenses
paid to the private insurance companies. The proposal would lower the
reimbursement rate from 28 percent of premiums sold for multiple-peril
crop insurance to 24.5 percent in 1998. The proposal specifies that
10.5 percentage points of the proposed rate be considered discretionary
spending. This proposal achieves a reduction in discretionary spending
of $52,852,000 from current law to $149,719,000 for 1998.
The USDA wanted the savings on the discretionary side of the budget
to reduce the burden of the shift to discretionary spending that is
required by current law. While we wanted to reduce delivery expenses,
we did not want agents to bear more than a fair share of the reduction
but wanted this to be a matter of negotiation between the agents and
their companies, without our involvement. Therefore, our proposal
provides for eliminating the distinction in current law that subjects
only the sales commissions portion of delivery expenses to
discretionary spending ceilings.
Question. Since the Subcommittee will, at a minimum, need to offset
the cost of any increase provided, what funding reductions would you
recommend in USDA's existing programs to offset the increase requested
for crop insurance delivery expenses?
Answer. To offset the additional delivery expenses involved in
expanding the revenue insurance program, the Department proposes to
reduce the reimbursement rate used to determine administrative expenses
paid to reinsured companies. This proposal would lower the rate from 28
percent to 24.5 percent in 1998. RMA also proposes to reduce the loss
ratio from its current 1.10 level to 1.085 in 1998 and 1.06 thereafter.
The reduction in the loss ratio partially offsets the cost of expanding
nationwide revenue insurance. The Department is also coordinating
efforts to further offset this proposal.
rural housing loan levels
The Section 502 Rural Housing fiscal year 1996 program levels was
$1 billion. The 1997 program level was reduced to $585 million due to
higher interest rate changes in the economy. The fiscal year 1997
appropriated loan levels were based on the overly optimistic fiscal
year 1997 President's loan levels.
Question. Are the proposed fiscal year 1998 loans levels more
realistic than the levels the Administration submitted for fiscal year
1997 so that a reduction in the program level will not occur in fiscal
year 1998?
Answer. The Section 502 Direct Program is the most sensitive to
interest rate variations for a number of factors. Any change in
interest rates can effect the subsidy rate and therefore the program
level. In fiscal year 1997, the budget authority appropriated for the
RHS single family housing program was $83 million. It was intended to
support a loan level of $1 billion. However, the subsidy rate was based
projected long-term interest rates of 5.53 percent. By the summer of
1996, the trend of falling interest rates had changed directions and it
was realized that the forecast would be much lower that the execution
rate which eventually turned out to be 7.11 percent. The impact of this
increase lowered the Section 502 program level to $585.3 million
nationwide, or 52 percent of what Congress authorized as a program
level when appropriating $83 million budget authority. For fiscal year
1998, we are requesting $128 million in budget authority with
forecasted interest rate of 6.16 percent and subsidy cost of 12.81. We
feel this is a realistic assumption based on the current economic
trend, however, all direct loan programs will continue to be at risk
given the dynamics of the current economy.
Question. Please explain the necessity of the Administration's
proposal to transfer budget authority from HUD to the Rural Housing
Service in order to administer section 8 Housing Assistance Payment
contracts which are beginning to expire?
Answer. This transfer is in the best interest of the taxpayers.
Rental Assistance (RA) administered by RHS is less expensive. Cost
savings are due to differing Agency approaches for increasing the
amount of the contract upon renewal. RA contracts are increased (with
Agency approval) based on a determination of project costs, while
Section 8 contracts were originally based on rents in the broader
market. These Section 8 contracts are automatically increased through
the application of the Annual Adjustment Factor, which in the past
years led to subsidized rents which are sometimes in excess of the
market rents for the area.
Under the fiscal year 1998 Budget, a one unit, five year Section 8
contract costs $27,630. For RA, it cost $14,324. Therefore, over five
years, renewing the 3,665 units would costs $52 million as RA units and
$101 million as Section 8 contracts: This would result in a five year
savings of $49 million.
Question. Is this proposal budget driven or will it assist Rural
Housing Service to better satisfy the rental assistance renewal
contracts for its customers?
Answer. Both. First, the cost savings to the taxpayers are
significant. Under the fiscal year 1998 Budget, a one unit, five year
Section 8 contract costs $27,630. For RA, it cost $14,324. Therefore,
over five years, renewing the 3,665 units would costs $52 million as RA
units and $101 million as Section 8 contracts: This would result in a
five year savings of $49 million.
Additionally, management fees will be reduced by approximately $2
per unit on a monthly basis by eliminating HUD requirements for these
projects. Savings to project owners/operators could be passed on in the
form of lower project rents and thus reduce rental assistance needs.
farm credit proposal
Question. Mr. Secretary, in your opening statement you say that
USDA will be proposing legislation to improve farm credit services,
What is your proposal to improve farm credit services mentioned in your
opening statement, Mr. Secretary?
Answer. We are proposing to provide some latitude for assisting
those former borrowers who have received a debt forgiveness in the
past. The 1996 Farm Bill banned such assistance, except for operating
loans to ongoing borrowers whose loans have been restructured. We
believe that the Farm Bill went too far in denying former borrowers a
second chance. It is a stricter standard than even bankruptcy imposes.
Our proposal would simply provide our borrowers with the same
opportunity for rebuilding their credit record, in accordance with the
standards of conventional lenders, and being able to return to us for
farm loan assistance in times of need.
We are also asking for authority to conduct pilot programs, using
farm credit program funding, to test innovative methods for meeting
program objectives. For example current law does not permit using
guaranteed loans for leases, which could be an effective means to
assist beginning farmers. This could be tested on a pilot basis and, if
successful, consideration could be given to authorizing a nationwide
program.
Two other provisions of the proposal would make the guaranteed
program more attractive to private lenders: allowing operating loan
funds to be used for real estate installments and providing some
flexibility for waiving the borrower training requirement.
We also are asking for some technical changes relating to homestead
protection, and the shared appreciation agreements that apply to loan
writedowns; as well as the elimination of the softwood timber program
and net recovery buyouts, both of which are duplicated by other,
broader based authorities.
nutrition education and training (net) program
The welfare reform bill eliminated permanent funding for the
Nutrition Education Training (NET) program, as requested by the
Administration. A $10 million permanent annual appropriation had been
provided for NET in previous years. This scored as PAYGO savings, but
left the program unfunded for fiscal year 1997. In December of last
year, the Administration reprogrammed $3.75 million from the School
Meals Initiative line item to avoid a disruption in the NET program.
Now, the Administration's fiscal year 1997 supplemental/rescission
package includes legislative language to reduce the $100 million in
mandatory funding provided for emergency food assistance commodity
purchases by $6.26 million to make this funding available for the NET
program.
Question. Given the fact that grants to states are available
through the school meals initiative and you have reprogrammed funds to
make available $3.75 million in fiscal year 1997 funding for the NET
program, why is it a priority to provide additional supplemental
funding to restore NET program funding to the fiscal year 1996 level?
Answer. We were able to reprogram the $3.75 million in Team
Nutrition money to NET, by not starting important Team Nutrition
activities. This left NET with $6.25 million less money than its 1996
level and $6.25 million less than we had planned for it in 1997. Thus,
the ongoing NET program was cut about 63 percent.
NET money is spent entirely at the State and local levels, so it
meant big reductions in effort visible at the local level--fewer
activities and projects, less material for use in the classroom, and
fewer nutritionists. A 63 percent cut is not something that can go
unnoticed.
This supplemental is a priority because we do not have
discretionary funds that we can use to support NET. While the
Administration supported changing NET from a permanent appropriation
back to discretionary, we did not intend to see the program defunded--
or cut 63 percent.
net
Question. What activities are not being funded by states with NET
program funding of $3.75 million?
Answer. NET funds are allocated to States based on school
enrollment. At the $10 million level, some States have been able to
maintain professional nutritionists who can conduct nutrition education
programs and provide fairly extensive training and technical assistance
to school food service workers. Even the smallest State received a
minimum grant, amounting to $62,500 in fiscal year 1996, enough to
provide for one statewide nutrition coordinator.
At the $3.75 million funding level, about half the States received
a minimum grant of $50,000 for fiscal year 1997, with the larger States
receiving more, but not in proportion to their enrolled base. States
are telling us that unless additional funds are provided they will be
forced to curtail the ``mini-grants'' or small grants to local schools.
They will also stop conducting teacher training workshops; and they
will curtail classroom support. This means that teachers will have
fewer nutrition education resources to use in conducting their classes.
agriculture weather forecasting
Question. The fiscal year 1998 request for the Chief Economist's
office includes additional funding of $525,000 to modernize weather and
climate acquisition.
What National Weather Service services to the agricultural
community were terminated and what has been the impact on producers?
Answer. In May 1996, the National Weather Service (NWS) eliminated
all agricultural weather services, all fruit frost programs, and fire
weather services to non-federal agencies for non-wildfire activities,
saving $2.3 million annually and reducing staffing by 37 FTEs. Seven
offices providing agricultural weather services exclusively were
closed, including: Agricultural Weather Service Centers (AWSC) College
Station, Texas; AWSC Stoneville, Mississippi, AWSC Auburn, Alabama;
AWSC West Lafayette, Indiana: Weather Service Office (WSO) Yuma,
Arizona; WSO Twin Falls, Idaho; and WSO Riverside, California. The
products eliminated were: all fruit frost forecasts, specialized
agricultural weather advisories, agricultural weather guidance and
cranberry bog forecasts. In addition, NWS eliminated coordination on
agricultural issues with federal, state, and local agencies. A detailed
listing of terminated programs was published in the Federal Register,
Wednesday, July 5, 1995.
Since May 1996, agricultural interests have had to rely on NWS
services provided to the general public or on specialized services
provided by private forecasters for a fee. Both the NWS and private
forecasters rely on data collected and disseminated by the NWS.
However, since the program termination, data from agricultural areas is
not being collected. As a result, forecasters do not have access to the
meteorological data they need to make accurate forecasts for
agricultural areas.
Question. How will the additional funding requested for the fiscal
year 1998 to modernize weather and climate data acquisition benefit the
agricultural community? Will the funding requested cover both the
collection and dissemination of weather data to farmers? What
additional funding will be required in future years?
Answer. The $525,000 requested is to install state-of-the-art
weather and climate data acquisition hardware in USDA. This is
necessary due to the National Weather Service's modernization program.
USDA must adopt communication technologies compatible with those being
implemented throughout the NWS in order to continue receiving the
global data and forecasts disseminated by the NWS. Specifically, USDA
must upgrade its telecommunications equipment to receive data from
NWS's Advanced Weather Interactive Processing System (AWIPS) and its
primary telecommunications component NOAAPORT. Access to these data
enables USDA to: provide comprehensive and timely information on the
impact of weather and climate on agriculture, including the provision
of weather data and analysis to agricultural users; monitor and
interpret significant global weather developments and their
implications for agriculture; publish the ``Weekly Weather and Crop
Bulletin;'' and analyze the impacts of droughts, freezes and other
significant events. The private sector utilizes USDA weather data and
analysis to generate value-added products for use the agricultural
community. In addition, many agencies within USDA operate programs that
are weather sensitive and rely on access to NWS data. The modernization
of USDA's technology would allow continued timely access to NWS data.
It is also important that the data obtained is accurate and
comprehensive. Therefore, USDA is also requesting $350,000 to begin an
incremental process of re-acquiring agricultural data lost when the NWS
terminated all agricultural weather programs. USDA will target one
region of the country where data losses have had a significant negative
impact and make all data collected available to both the NWS and
private forecasters. In future budgets, additional funding may be
requested to create a nationwide network of data collection and
information delivery for the agricultural community.
Question. There was an AP story on Feb 19 which indicated that if
Florida farmers had received formerly Federal-sponsored weather
forecasts from the National Weather Service, they would have been able
to protect their crops from the recent freeze. It also notes that
farmers are unwilling or unable to pay for the commercial weather
forecasting service and, now, Florida officials are waiting to see what
the federal government does regarding farm forecasts before looking
into a freeze warning system for the state.
To what extent is it true that the continued availability of
National Weather Service data would have enabled Florida producers to
protect their crops from freeze?
Answer. The National Weather Service acknowledges a reduction in
surface weather observations in agricultural areas. During the Florida
episode, surface observations available to NWS and private sector
forecasters were limited to urban and airport sites; sites with well-
documented warm bias. Had forecasters had hourly observations available
from significantly cooler agricultural locations, these data would have
triggered forecasters to issue freeze warnings early enough for growers
with mitigation devices to react. Damage and losses can never be
completely prevented, but it is clear that losses would have been
reduced had weather data been available for rural sites. However, there
is no way to quantify the extent to which crops could have been saved.
Question. In your view, what costs should be borne by the federal
government, and to what extent should this data be paid for by state
and local entities or by the farmers?
Answer. USDA supported the National Weather Service when it
responded to congressional and administrative challenges to eliminate
advisory and forecast services to specialized communities, provided
there was no agricultural data loss in the transition. Unfortunately,
primary data losses have occurred, and neither the NWS nor the private
meteorological community can provide adequate services to the farm
community without access to a sufficiently dense weather and climate
data base that includes observations from agricultural sites. USDA
believes specialized ``value added'' services to the agricultural
community can and should be provided by the private sector, but that
collection, quality assurance, archival and dissemination of basic
weather and climate data is a federal responsibility. Basic weather and
climate data are part of the environmental infrastructure, a national
treasure, and must be maintained in order to respond to issues of
sustainability, global change, and crop impact assessment on a regional
and global scale.
information systems/technology architecture
Secretary Glickman, concern over the department's effective
management and modernization of its information technology systems and
investments prompted this Subcommittee in its reports accompanying the
1996 and 1997 appropriations acts to direct the Department to defer all
computer acquisitions until the Department examined and had in place a
Department-wide information systems technology architecture.
In November of last year, Deputy Secretary Rominger notified this
Subcommittee that a freeze on new investments in information technology
had been issued until work was completed on that architecture, and
indicated that the architecture was targeted to be completed on
February 1, 1997.
Obviously, the conversion of old information systems to a new
architecture is a complex and costly undertaking. None of us want to
hear about another debacle, such as that recently experienced by the
Internal Revenue Service with its tax systems modernization effort.
Question. What is the status of the Department's information system
technology business architecture plans?
Answer. The Department has developed a high level, base line
architecture. This architecture is the framework or umbrella beneath
which we will now fill out the detailed pieces. It has three distinct
parts--a business/data architecture, a technical standard architecture,
and a telecommunications architecture. Much work has yet to be done on
the details but the current work does give us some basis for
considering necessary, short term investments, even before we have all
the pieces.
Question. Does the Department still have a moratorium in place on
new information technology investment?
Answer. Yes, the new Executive Information Technology Investment
Review Board (EITIRB), which is chaired by the Deputy Secretary and
comprised of the Department's Subcabinet policy officials, has decided
to keep the moratorium in place until the members fully understand the
technical architecture and are comfortable that the necessary
implementation process is in place to ensure successful post moratorium
operations.
Question. Is the Department reviewing existing systems as part of
its plans?
Answer. Yes, the Office of the Chief Information Officer has
reviewed the existing major systems as part of the process mandated by
the Office of Management and Budget (OMB) in its memorandum 97-02. This
memorandum sets forth criteria, now known as the ``Raines Rules'', that
technology investments are to be judged by. The new USDA EITIRB, will
also monitor and evaluate existing technology projects as well as new
ones, to ensure that they meet expected outcomes.
Question. Have further investments in existing systems also been
frozen? If not, why?
Answer. Yes, the current moratorium covers significant information
technology acquisitions and certain telecommunications equipment
acquisitions. This includes new investments in existing systems.
Question. Is USDA incorporating the 1996 farm bill in its strategic
planning for the modernization of its information systems technology?
Answer. Yes. The 1996 legislation significantly impacted the
business of many USDA agencies. Agencies have assessed the impact of
this legislation, as well as other factors including the existing
budget constraints and have incorporated this information into their
draft strategic plans. These documents will help USDA identify the
business needs of the future and serve as the basis for identifying the
technology that will be needed to support the changed business needs.
information technology investments
Question. Aside from the preparation of an architecture plan, what
other measures has the Department taken or does it plan to take before
information technology investments are made?
Answer. Two new Boards have been established to help develop and
implement our architecture and IRM management plans. The EITIRB,
chaired by the Deputy Secretary and consisting of the Subcabinet
officials from each mission area, will review technology investment
proposals and ongoing projects to ensure that they are economical and
effective. An Information Resources Management (IRM) Council Board,
consisting of the Senior Mission Area IRM leaders, will provide
technical advice to the Chief Information Officer.
Question. Although the Deputy Secretary announced that all
acquisitions were suspended early this year, the Department awarded a
$61 million contract to EDS. Why?
Answer. The contract was actually awarded to a consortium of
vendors, including EDS. It is for the procurement of support services,
not computers, software, etc. It represented a joint effort by the Farm
Service Agency and Natural Resources Conservation Service to provide a
procurement vehicle from which support services could be obtained. No
actual procurement takes place until task orders are issued against the
contract. This new vehicle was needed because the existing support
services contract vehicles of the two agencies have expired or will do
so by the end of this fiscal year.
Question. What funding is included in the fiscal year 1998 budget,
by account, for information technology system investments?
Answer. The total projected funding for technology investments
under the fiscal year 1998 budget is $1,236,808,000. A breakdown by
Agency and account will be provided for the record.
[The information follows:]
USDA AGENCY INFORMATION TECHNOLOGY EXPENDITURES
[Net obligations, in thousands]
----------------------------------------------------------------------------------------------------------------
Fiscal year
Agency/office Program/budget account Amount by 1998 agency
account total
----------------------------------------------------------------------------------------------------------------
Farm and Foreign Agricultural
Services:
Foreign Agricultural Service...... FAS Appropriation............................. $15,397 $15,397
Farm Service Agency............... CCC........................................... 106,207 ...........
Appropriated--Salaries and Expenses........... 104,646 210,853
Risk Management Agency............ Federal Crop Insurance Corp Revolving Fund.... 3,000 ...........
RMA Appropriated--Administrative and 20,338 23,338
Operations.
Food Nutrition and Consumer Services:
Food and Consumer Service......... Food Stamps:
EBT system development...................... 39,000 ...........
Other system development.................... 164,341 ...........
WIC: 15,000 ...........
EBT system development......................
Other system development.................... 76,600 ...........
FPA........................................... 9,300 ...........
FS,CN, FPA, NPE, FDPIR, CSFP, TEFAP........... 27,600 331,841
Food Safety: Food Safety and Appropriated--Salaries and Expenses........... 23,620 23,620
Inspection Service.
Marketing and Regulatory Programs:
Agricultural Marketing Service.... Marketing Services............................ 7,001 ...........
Trust Funds................................... 9,421 ...........
Perishable Agricultural Commodities Act....... 530 ...........
Section 32.................................... 1,281 18,233
Animal and Plant Health Inspection Appropriated--Salaries and Expenses........... 30,709 30,709
Service.
Grain Inspection, Packers and Appropriated.................................. 1,562 ...........
Stockyards Administration.
Grain Trust Fund.............................. 1,530 3,092
Natural Resources and Environment: Forest and Rangeland Research................. 18,633 ...........
Forest Service.
State and Private Forestry.................... 16,194 ...........
National Forest System........................ 133,456 ...........
Wildland Fire Management...................... 53,284 ...........
Reconstruction and Construction............... 15,136 ...........
Land Acquisition Accounts..................... 4,262 ...........
Range Betterment Funds........................ 382 ...........
Forest Service Permanent Appropriation........ 20,808 ...........
Forest Service Trust Funds.................... 27,862 290,017
Natural Resources Conservation Service Conservation Operations:
Technical Assistance........................ 88,061 ...........
Soil Surveys................................ 26,400 ...........
Snow Surveys................................ 1,005 ...........
Plant Materials............................. 1,005 ...........
Water Resource Assistance................... 10,060 ...........
Resource Conservation and Development......... 4,023 130,554
Research, Education and Economics:
Agricultural Research Service..... Appropriated--Salaries and Expenses........... 36,026 36,026
Cooperative State Research, Appropriation................................. 5,679 5,679
Education, and Extension Service.
Economic Research Service......... Appropriated--Salaries and Expenses........... 5,353 5,353
National Agricultural Statistics Agricultural Estimates........................ 22,394 29,664
Service.
Census........................................ 7,270 ...........
Rural Development..................... Appropriated--Salaries and Expenses........... 68,388 68,388
Administration........................ Appropriation................................. 925 ...........
Agriculture Buildings and Facilities.......... 290 1,215
Office of the Chief Financial Appropriation................................. 344 344
Officer.
Office of the Chief Information Appropriation................................. 4,828 4,828
Officer.
Office of the General Counsel..... Appropriation................................. 1,537 1,537
Office of the Inspector General... Appropriated--Salaries and Expenses........... 4,322 4,322
Office of Communications.......... Appropriated.................................. 621 621
Office of Budget and Program Appropriation--Budget and Program Analysis.... 549 549
Analysis.
Office of the Chief Economist Appropriated--Salaries and Expenses........... 628 628
(Includes WAOB).
-------------------------------------------------------------------------
Total......................... .............................................. ........... 1,236,808
----------------------------------------------------------------------------------------------------------------
facilities closures and program terminations
Question. Please provide the Committee with a consolidated list, by
USDA agency, of proposed office and laboratory closures.
Answer. The Agriculture Research Service is proposing that the
following two work sites and two locations be closed in fiscal year
1998:
Work Site Closures: Brawley, CA; Orono, ME
Location Closures: Mandan, ND; Prosser, WA
The Agricultural Marketing Service is proposing to close one
location in fiscal year 1998 and two locations in fiscal year 1999
respectively:
Milk Market Administrators Office: Boise, ID
Cotton Grading Office: Hayti, MO
Cotton Grading Office: Lamesa, TX
The Animal and Plant Health Inspection Service is proposing to
close five locations in fiscal year 1997 and three locations in fiscal
year 1998 respectively:
International Services: Fort Lauderdale, FL
Veterinary Services: Jacksonville, FL
Animal Care: Tampa, FL
Plant Protection and Quarantine: Goldsboro, NC
Plant Protection and Quarantine: Spokane, WA
Animal Damage Control: Little Rock, AR
Animal Damage Control: Manhattan, KS
Animal Damage Control: St. Paul, MN
The Food Safety and Inspection Service is proposing to close
twenty-nine office locations in fiscal year 1997:
Area Office: Long Beach, CA
Area Office: Sacramento, CA
Area Office: Tallahassee, FL
Area Office: Athens, GA
Area Office: Ames, IA
Area Office: Springfield, IL
Area Office: Topeka, KS
Area Office: Louisville, KY
Area Office: Baton Rouge, LA
Area Office: Jefferson City, MO
Area Office: Billings, MT
Area Office: New York, NY
Area Office: Fort Washington, PA
Area Office: Harrisburg, PA
Area Office: Austin, TX
Compliance Office: Alameda, CA
Compliance Office: Atlanta, GA
Compliance Office: Des Moines, IA
Compliance Office: Moorestown, NJ
Compliance Office: Dallas, TX
Correlation Center: Ames, IA
Egg Products Inspection Office: Modesto, CA
Import Field Office: Long Beach CA
Import Field Office: Miami, FL
Import Field Office: Detroit, MI
Import Field Office: New York, NY
Import Field Office: Philadelphia, PA
Import Field Office: Tocoma, WA
Microbiology Laboratory: Beltsville, MD
Question. Please provide a list, by agency and for each year since
fiscal year 1993, of the USDA offices and laboratories which have been
closed and the amount of savings which has been achieved as a result of
each closure.
Answer. The list of offices and laboratories closed since 1993 and
the amount of savings which has been achieved as a result of each
closure follows. Certain agencies within USDA have not had any
cumulative savings due to the costs of alternative space acquisition
and employee relocations associated with the closures. Outyear savings
are expected and will be footnoted as applicable.
AGRICULTURAL RESEARCH SERVICE
------------------------------------------------------------------------
Locations converted to
Year Savings Office closures work sites
------------------------------------------------------------------------
1995 $729,500 Fairbanks, AK............ ..........................
.........
450,000 Pasadena, CA............. ..........................
.........
756,200 Georgetown, DE........... ..........................
.........
450,000 Savannah, GA............. ..........................
.........
1,548,000 Lexington, KY............ ..........................
.........
1,766,800 Oxford, NC............... ..........................
.........
263,400 Delaware, OH............. ..........................
.........
143,900 Lewisburg, TN............ ..........................
.........
666,700 Suffolk, VA.............. ..........................
.........
342,600 Rotterdam, The ..........................
Netherlands. .........
-----------
7,117,100
1996 12,000 ......................... Brawley, CA
124,900 ......................... Houma, LA
39,200 ......................... Orono, ME
53,500 ......................... E. Grand Forks, MN
21,700 ......................... Chatsworth, NJ
41,400 ......................... Brownwood, TX
-----------
292,700
1998 288,900 Brawley, CA.............. ..........................
.........
122,200 Orono, ME................ ..........................
.........
2,102,000 Mandan, ND............... ..........................
.........
1,293,400 Prosser, WA.............. ..........................
.........
-----------
3,806,500
------------------------------------------------------------------------
AGRICULTURAL MARKETING SERVICE
------------------------------------------------------------------------
Year Savings Office closures Locations
------------------------------------------------------------------------
1993 $810,000 Processed Fruit & Los Angles, CA
Vegetables.
471,000 Processed Fruit & Denver, CO
Vegetables.
8,000 Milk Marketing Evansville, IN
Administrators.
......... Poultry Market News....... Kansas City, MO
........
.
11,000 Milk Marketing Omaha, NE
Administrators.
11,000 Milk Marketing Beaverton, OR
Administrators.
35,000 Milk Marketing Knoxville, TN
Administrators.
1,032,000 Meat Grading.............. Arlington, TX
-----------
2,378,000
1994 278,000 Meat Grading.............. Bell, CA
68,000 Livestock & Grain Market Visalia, CA
News.
135,000 Livestock & Grain Market Natl. Stockyards, IL
News.
13,000 Fresh Fruit & Vegetable Indianapolis, IN
Grading.
23,000 Fresh Fruit & Vegetable Fort Mitchell, KY
Grading.
249,000 Poultry Market News....... Kansas City, MO
350,000 Cotton Grading............ Greenwood, MS
71,000 Fresh Fruit & Vegetable Buffalo, NY
Grading.
55,000 Fresh Fruit & Vegetable Wilkes Barre, PA
Grading.
37,000 Fresh Fruit & Vegetable Warwick, RI
Grading.
6,000 Fresh Fruit & Vegetable Memphis, TN
Grading.
16,000 Fresh Fruit & Vegetable El Paso, TX
Grading.
316,000 Cotton Grading............ Waco, TX
6,000 Fresh Fruit & Vegetable Salt Lake City, UT
Grading.
44,000 Fresh Fruit & Vegetable Norfolk, VA
Grading.
14,000 Milk Marketing Germantown, WI
Administrators.
21,000 Milk Marketing Stevens Point, WI
Administrators.
-----------
1,702,000
1995 33,000 Fresh Fruit & Vegetable Sacramento, CA
Grading.
20,000 Poultry Grading........... Denver, CO
32,000 Poultry Grading........... Valrico, FL
61,000 Poultry Grading........... Des Moines, IA
215,000 Fresh Fruit & Vegetable Glen Ellyn, IL
Grading.
39,000 Poultry Grading........... West Lafayette, IN
90,000 Fruit & Vegetable Market New Orleans, LA
News.
22,000 Poultry Grading........... Augusta, ME
60,000 Livestock & Grain Market Albany, NY
News.
319,000 Cotton Grading............ Altus, OK
346,000 Cotton Standardization.... Clemson, SC
9,000 Poultry Grading........... Columbia, SC
193,000 Meat Grading.............. Arlington, TX
373,000 Cotton Grading............ El Paso, TX
117,000 Fresh Fruit & Vegetable Falls Church, VA
Grading.
-----------
1,929,000
1996 100,000 Meat Grading.............. Des Moines, IA
34,000 Poultry Market News....... Glen Illyn, IL
......... Fruit & Vegetable Market Presque Isle, ME
........ News.
.
45,000 Livestock & Grain Market West Fargo, ND
News.
95,000 Poultry Market News....... Edison, NJ
10,000 Fruit & Vegetable Market Rochester, NY
News.
20,000 Fruit & Vegetable Market Cincinnati, OH
News.
3,000 Milk Market Administrators Columbus, OH
......... Cotton Grading............ Harlingen, TX
........
.
......... Fruit & Vegetable Market McAllen, TX
........ News.
.
-----------
307,000
1997 ......... Fruit & Vegetable Market Nogales, AZ
........ News.
.
5,000 Fruit & Vegetable Market Inwood, WV
News.
-----------
5,000
------------------------------------------------------------------------
Cumulative savings are expected in the outyears.
ANIMAL AND PLANT HEALTH INSPECTION SERVICE
------------------------------------------------------------------------
Year Savings Office closures Locations
------------------------------------------------------------------------
1993 $15,000 Plant Protection & Mobile, AL
Quarantine.
77,000 Plant Protection & Tifton, GA
Quarantine.
47,000 Plant Protection & Hanna, IN
Quarantine.
164,000 Plant Protection & Fairmont, NC
Quarantine.
217,000 Plant Protection & Fayetteville, NC
Quarantine.
547,000 Plant Protection & Lumberton, NC
Quarantine.
21,000 Plant Protection & Wallace, NC
Quarantine.
22,000 Plant Protection & Florence, SC
Quarantine.
574,000 Plant Protection & Brentwood, TN
Quarantine.
15,000 Veterinary Services....... Puerto Rico
-----------
1,699,000
1994 12,000 Veterinary Services....... Bartow, FL
23,000 Veterinary Services....... Okeechobee, FL
12,000 Plant Protection & Oakbrook, IL
Quarantine.
12,000 Veterinary Services....... Alexandria, LA
160,000 Plant Protection & Chestertown, MD
Quarantine.
454,000 Animal Care............... Minneapolis, MN
454,000 Investigative & Minneapolis, MN
Enforcement.
451,000 Plant Protection & North Platte, NE
Quarantine.
160,000 Plant Protection & Batavia, NY
Quarantine.
285,000 Plant Protection & Dillon, SC
Quarantine.
277,000 Plant Protection & Orangeburg, SC
Quarantine.
-----------
2,300,000
1995 12,000 Veterinary Services....... Gainesville, FL
121,000 Plant Protection & Dublin, GA
Quarantine.
101,000 Plant Protection & Alexandria, LA
Quarantine.
120,000 Plant Protection & St. Peters, MO
Quarantine.
128,000 Plant Protection & Meadville, PA
Quarantine.
129,000 Plant Protection & Clarion, PA
Quarantine.
133,000 Plant Protection & Jacksonville, TX
Quarantine.
15,000 Plant Protection & Levelland, TX
Quarantine.
9,000 Plant Protection & Ralls, TX
Quarantine.
101,000 Veterinary Services....... Charleston, WV
97,000 Veterinary Services....... Puerto Rico
589,000 Veterinary Services....... Puerto Rico
11,000 Veterinary Services....... Puerto Rico
921,000 Veterinary Services....... Puerto Rico
260,000 Veterinary Services....... Puerto Rico
-----------
2,747,000
1996 160,000 Investigative & Sacramento, CA
Enforcement.
80,000 Investigative & Tampa, FL
Enforcement.
71,000 Animal Damage Control..... Twin Falls, ID
-----------
311,000
1997 ......... Plant Protection & Winter Haven, FL
........ Quarantine.
.
......... Plant Protection & Brookhaven, MS
........ Quarantine.
.
------------------------------------------------------------------------
Cumulative savings are expected in the outyears.
GRAIN INSPECTION, PACKERS AND STOCKYARDS ADMINISTRATION
------------------------------------------------------------------------
Year Savings Office closures Locations
------------------------------------------------------------------------
1994 $69,000 PSA Regional Office....... Portland, OR
1995 102,000 FGIS Suboffice............ West Memphis, AR
221,000 FGIS Field Office......... Peoria, IL
298,000 FGIS Suboffice............ Indianapolis, IN
415,000 FGIS Field Office......... Omaha, NE
182,000 FGIS Field Office......... Houston, TX
104,000 FGIS Field Office......... Plainview, TX
-----------
1,391,000
1996 ......... FGIS Suboffice............ Savannah, GA
........
.
------------------------------------------------------------------------
Cumulative savings are expected in the outyears.
FOOD SAFETY AND INSPECTION SERVICE
------------------------------------------------------------------------
Year Savings Office closures Locations
------------------------------------------------------------------------
1993 ......... Compliance Office......... Charleston, WV
........
.
1995 ......... Import Office No. 7....... New Orleans, LA
........
.
......... Import Office No. 1....... Boston, MA
........
.
......... Import Office No. 4....... Baltimore, MD
........
.
......... Import Office No. 5....... Charleston, SC
........
.
......... Training Development...... Denton, TX
........
.
......... Import Office No. 6....... Puerto Rico
........
.
1996 ......... Egg Products Inspection... Gastonia, NC
........
.
......... Salmonella Enteritidis.... Lancaster, PA
........
.
------------------------------------------------------------------------
Cumulative savings are expected in the outyears.
FOOD AND CONSUMER SERVICE
------------------------------------------------------------------------
Year Savings Office closures Locations
------------------------------------------------------------------------
1994 $79,800 Satellite Office.......... El Paso, TX
1995 ......... Satellite Office.......... Mobile, AL
........
.
65,400 Satellite Office.......... Tuscaloosa, AL
......... Satellite Office.......... New Orleans, LA
........
.
122,300 Satellite Office.......... Knoxville, TN
......... Satellite Office.......... Memphis, TN
........
.
123,000 Satellite Office.......... Corpus Christi, TX
23,900 Satellite Office.......... San Antonio, TX
21,400 Field Office.............. Alexandria, VA
-----------
356,000
1996 21,100 Satellite Office.......... Shawanno, WI
------------------------------------------------------------------------
Cumulative savings are expected in the outyears.
FOREST SERVICE
------------------------------------------------------------------------
Year Savings Office closures Locations
------------------------------------------------------------------------
1993 ......... Rita Blanca National Texline, TX
........ Grasslands.
.
1994 $644,000 La Porte Ranger District. Challenge, CA
455,000 Greenville Ranger Greenville, CA
District.
600,000 Willow Springs Ranger Willow Springs, MO
District.
300,000 Edgefield Ranger District Edgefield, SC
300,000 Lone Cane Ranger District Greenwood, SC
-----------
2,299,000
1995 300,000 Biloxi Ranger District... McHenry, MS
205,300 Mayhill Ranger District.. Mayhill, NM
17,000 Forestry Resources University Park, PA
Laboratory.
160,000 Forestry Science Madison, WI
Laboratory.
-----------
682,300
1996 ......... Institute of Northern Fairbanks, AK
........ Forestry.
.
250,000 Milford Ranger District.. Milford, CA
......... Forestry Science Gainsville, GA
........ Laboratory.
.
......... Southern Forestry Fire Macon, GA
........ Lab..
.
......... Moose Creek Ranger Grangeville, ID
........ District.
.
......... Forestry Science Carbondale, IL
........ Laboratory.
.
......... Forestry Science Orono, ME
........ Laboratory.
.
......... Forestry Science Gulfport, MS
........ Laboratory.
.
30,000 Deerlodge National Forest Butte, MT
20,000 Glacier View Ranger Columbia Falls, MT
District.
280,000 Fisher Ranger District... Libby, MT
......... Bend Silviculture Bend, OR
........ Laboratory.
.
300,000 San Jacinto Ranger Cleveland, TX
District.
300,000 Tenaha Ranger District... San Augustine, TX
-----------
1,180,000
1997 ......... Mancos Ranger District... Mancos, CO
........
.
......... North Fork Ranger Orofino, ID
........ District.
.
------------------------------------------------------------------------
Cumulative savings are expected in the outyears.
OFFICE OF THE GENERAL COUNSEL
------------------------------------------------------------------------
Year Savings Office closures Locations
------------------------------------------------------------------------
1996 ......... Legal Services............ Jackson, MS
........
.
......... Legal Services............ Lincoln, NE
........
.
......... Legal Services............ Raleigh, NC
........
.
......... Legal Services............ Stillwater, OK
........
.
......... Legal Services............ Puerto Rico
........
.
------------------------------------------------------------------------
Cumulative savings are expected in the outyears.
OFFICE OF THE INSPECTOR GENERAL
------------------------------------------------------------------------
Year Savings Office closures Locations
------------------------------------------------------------------------
1994 $5,000 Audit Residency Office.... Huron, SD
1995 4,000 Audit Residency Office.... Little Rock, AR
------------------------------------------------------------------------
Question. Please provide the Committee with a consolidated list, by
USDA agency, of proposed program and project terminations. Reflect
funds for fiscal years 1996, 1997, and 1998.
Answer. A list of proposed program and project terminations
proposed by ARS in fiscal year 1998 will be provided for the record.
[The information follows:]
U.S. DEPARTMENT OF AGRICULTURE, AGRICULTURAL RESEARCH SERVICE PROPOSED
FISCAL YEAR 1998 PROJECT TERMINATIONS
------------------------------------------------------------------------
Fiscal year--
-----------------------------------------
Location/Research project 1997 1998
1996 actual estimate estimate
------------------------------------------------------------------------
CALIFORNIA
Albany:
Flavor Optimization of
Major Food Crops through
Control of Metabolic
Processes................ ............ ............ $357,600
Modification of Vegetable
Oils as Raw Materials for
Industrial Uses.......... ............ ............ 681,900
In Vitro Creation &
Commercialization of High
Solids Tomatoes & High-
Solids, Low Sugar
Potatoes................. ............ ............ 398,900
New Bacterial
Polysaccharides for Food
& Industry............... ............ ............ 324,200
Novel Biopolymers Based on
Agricultural Sources..... ............ ............ 282,500
Biological Control of
Yellow Starthistle and
Other Nonindigenous Plant
Pests in Western US...... ............ ............ 88,200
Quality Assurance of Food
Products from Livestock
Grazing Rangeland Weeds.. $352,421 ............ ............
-----------------------------------------
Total for Albany, CA.. 352,421 ............ 2,133,300
=========================================
Fresno: Shallow Groundwater
Management Systems for Arid
Irrigated Areas............. ............ ............ 245,700
-----------------------------------------
Total for Fresno, CA.... ............ ............ 245,700
=========================================
Brawley: Crop Irrigation
Research in the Imperial
Valley....................... ............ ............ 321,000
-----------------------------------------
Total for Brawley, CA... ............ ............ 321,000
=========================================
COLORADO
Ft. Collins:
Global Change Research,
Decision Support,
Modeling, and Database
Management............... ............ ............ 727,500
Development of Improved
Cropping System Models &
Technology for
Sustainable Production... ............ ............ 158,400
Development of a Decision
Support System for
Farmers and Ranchers in
the Great Plains......... ............ ............ 80,000
Global Change Research,
Modeling, and Database
Management with Emphasis
on Terrestrial Systems... ............ $218,600 ............
-----------------------------------------
Total for Ft. Collins,
CO................... ............ 218,600 965,900
=========================================
FLORIDA
Canal Pt.: Plant Resistance
and Biological Control in
Sugarcane Insect Pest
Management................... ............ 148,300 ............
-----------------------------------------
Total for Canal Point,
FL..................... ............ 148,300 ............
=========================================
Gainesville:
Management of Termites as
Urban Pests in the
American Pacific......... ............ ............ 144,100
Modeling & Simulation of
Integrated Mgt System for
Arthropods of Medical &
Veterinary Importance Mgt
of Termites.............. ............ 328,300 ............
-----------------------------------------
Total for Gainesville,
FL................... ............ 328,300 144,100
=========================================
GEORGIA
Athens:
Reproductive Physiology-
Pollen-Pistil Interaction
Leading to Fertilization. 194,541 ............ ............
Genetic Determinants &
Limits to Selection for
Growth in Poultry........ ............ 181,800 ............
Reducing Rust-Induced
Losses to Small Grains... ............ 153,000 ............
-----------------------------------------
Total for Athens, GA.. 194,541 334,800 ............
=========================================
Tifton:
Reduction of Synthetic
Chemical Residues on
Cured Leaf and Screening
of Nicotina.............. 37,883 ............ ............
Cultural Practices,
Environmental Stresses &
Germplasm Enhancement of
Brassica Oilseed SPP..... ............ 147,400 ............
Automated Growing &
Transplanting Systems for
Plant Seedlings.......... ............ 151,700 ............
-----------------------------------------
Total for Tifton, GA.. 37,883 299,100 ............
=========================================
HAWAII
Hilo: Aquaculture Productivity
Research Phase II............ ............ ............ 1,612,400
-----------------------------------------
Total for Hilo, HI...... ............ ............ 1,612,400
=========================================
IDAHO
Aberdeen: Development & Use of
Molecular Techniques in Oat
Enhance- ment............... ............ ............ 160,700
-----------------------------------------
Total for Aberdeen, ID.. ............ ............ 160,700
=========================================
ILLINOIS
Peoria:
Animal Health Consortium.. ............ ............ 919,800
Exploratory Thermal
Chemical Conversion of
Starch to Enhance
Derivatization........... ............ ............ 161,700
Enhanced Use of Plant
Proteins: Identifying,
Isolating and Relating
Structures to Properties. ............ ............ 577,900
Genetic Engineering of
Anaerobic Bacteria for
Improved Rumen Function.. ............ ............ 490,800
Plant Defense via
Lipoxygenase Pathway
Enzymes.................. 410,776 ............ ............
-----------------------------------------
Total for Peoria, IL.... 410,776 ............ 2,150,200
=========================================
Urbana:
Reduced Herbicide Inputs
for Effective Weed
Management Systems to
Improve Water Quality.... ............ ............ 185,700
Sensors and Systems for
Site-Specific Crop
Management to Improve
Environmental Quality.... ............ ............ 229,200
Soybean Diseases.......... ............ ............ 344,100
-----------------------------------------
Total for Urbana, IL.... ............ ............ 759,000
=========================================
IOWA
Ames:
Limits to Digestibility &
Interactions Among
Quality, Growth, &
Persistence of Forages... ............ ............ 171,000
Genetic Characterization
of Soybean Germplasm..... ............ ............ 178,900
-----------------------------------------
Total for Ames, IA...... ............ ............ 349,900
=========================================
KANSAS
Manhattan: Protecting Hard Red
Winter Wheat from Biotic
Stress....................... ............ ............ 250,000
-----------------------------------------
Total for Manhattan, KS. ............ ............ 250,000
=========================================
LOUISIANA
New Orleans:
Improving Sugarcane
Productivity by
Conventional and
Molecular Approaches to
Genetic Development...... ............ ............ 233,300
Disease and Insect Control
Mechanisms for the
Enhancement of Sugarcane
Germplasm Resistance..... ............ ............ 83,400
Developing Integrated Weed
Management Systems for
Efficient and Sustainable
Sugarcane Production..... ............ ............ 83,300
Pesticide Formulation for
Protection of
Environmental Quality.... 376,646 ............ ............
-----------------------------------------
Total for New Orleans,
LA..................... 376,646 ............ 400,000
=========================================
MAINE
Orono: Research on Soil &
Water Conservation for Potato
Production in the Northeast.. ............ ............ 135,500
-----------------------------------------
Total for Orono, MA..... ............ ............ 135,500
=========================================
MARYLAND
Beltsville:
Ecologically-Based
Technologies for
Controlling Ixodes
Scapularis & Reducing
Lyme Disease............. ............ ............ 175,200
Remote Sensing &
Associated Technologies
for Production Decisions. ............ ............ 206,100
Stability/Maturity/Safety
of Composts and Organic
Residuals: Criteria and
Tests for Agriculture.... ............ ............ 281,700
Automated Firmness
Classification of Apples. ............ ............ 378,600
Production & Evaluation of
Tissue-Cultured Fruit
Crops.................... ............ ............ 237,900
National Turfgrass
Evaluation Program....... ............ ............ 55,300
Genetic Modification of
Soybean Inoculants to
Improve Their
Effectiveness............ ............ ............ 171,800
Molecular Genetics of
Populations of Fungi
Important in Biological
Control.................. ............ ............ 182,300
Reduction of Chilling
Injury by Techniques Safe
for Food Consump- tion.. ............ ............ 454,000
Systematics of
Agriculturally Important
Grasses Related to Sugar-
cane.................... 153,708 ............ ............
Modeling Soil Processes in
Two Dimensions........... ............ 71,700 ............
Investigate Mechanisms by
Which Hormones Affect
Synthesis of Milk Casein. ............ 380,400 ............
Integrated Management of
Rhizoctonia Seedling
Disease in Alfalfa....... ............ 183,400 ............
Exploitation of Host-
Parasite Factors For
Regulation of Pest
Insects.................. ............ 555,600 ............
-----------------------------------------
Total for Beltsville.... 153,708 1,191,100 2,142,900
=========================================
MICHIGAN
East Lansing:
Innovation Technology to
Improve the Production
and Handling of
Vegetables............... ............ ............ 222,200
Crop/Animal Systems to
Improve Nutrient
Management and
Sustainability of Dairy
Farms.................... ............ ............ 170,800
-----------------------------------------
Total for East
Lansing, MI.......... ............ ............ 393,000
=========================================
MINNESOTA
St. Paul: Germplasm Evaluation
and Genetic Improvement of
Oats and Wild Rice........... ............ ............ 147,000
-----------------------------------------
Total for St. Paul, MN.. ............ ............ 147,000
=========================================
MISSISSIPPI
Stoneville: Agronomic and
Economic Evaluation of Kenaf
as a Field Crop in
Mississippi.................. ............ ............ 491,500
-----------------------------------------
Total for Stoneville, MS ............ ............ 491,500
=========================================
MISSOURI
Columbia: Surface and
Subsurface Hydrology for
Watersheds with Limited
Relief....................... ............ ............ 393,200
-----------------------------------------
Total for Columbia, MO.. ............ ............ 393,200
=========================================
NEBRASKA
Clay: Influence of
Gastrointestinal
Neuroendocrine Peptides on
Food Intake & Swine Growth... ............ ............ 208,400
-----------------------------------------
Total for Clay Center,
NE..................... ............ ............ 208,400
=========================================
Lincoln: Biology and Control
of Virus Diseases of Sorghum. ............ ............ 143,100
-----------------------------------------
Total for Lincoln, NE... ............ ............ 143,100
=========================================
NEW YORK
Ithaca:
Entomopathogenic Fungi as
Biocontrol Agents of Pest
Insects of Agricultural
Crops.................... ............ ............ 50,000
Agricultural
Sustainability and Stress
Adaptation: Role of
Differential Root
Development.............. ............ ............ 221,100
-----------------------------------------
Total for Ithaca, NY.. ............ ............ 271,100
=========================================
NORTH CAROLINA
Raleigh:
Enhancement of Roasted
Peanut Flavor Intensity
Using Genetic Resources.. ............ ............ 285,800
Factors Responsible for
Control of the Textural
Properties of Processed
Sweetpotato Products..... ............ ............ 217,200
Evaluation of Temperate
Legumes and Warm-Season
Grass Mixtures in
Sustainable Production
Systems.................. ............ ............ 374,200
Impact of Environmental
Factors and Genetic
Variability on
Photosynthesis........... 182,375 ............ ............
Effects of Environment on
Weed/Crop Competition and
Competitive Ability...... 117,777 ............ ............
Identification Treatments
to Reduce Pesticide...... 122,677 ............ ............
-----------------------------------------
Total for Raleigh, NC... 422,829 ............ 877,200
=========================================
NORTH DAKOTA
Fargo: The Genetics of Natural
Insect Population & Modern
Methods...................... ............ 288,200 ............
-----------------------------------------
Total for Fargo, ND..... ............ 288,200 ............
=========================================
Mandan: Genetic Improvement of
Trees For Soil & Water....... ............ 191,600 2,335,200
-----------------------------------------
Total for Mandan, ND.... ............ 191,600 2,335,200
=========================================
OHIO
Wooster: Development of
Soybean Germplasm &
Production Systems for High
Yield & Drought Prone
Environments................. ............ ............ 210,100
-----------------------------------------
Total for Wooster, OH... ............ ............ 210,100
=========================================
OKLAHOMA
Stillwater: Improving
Resistance of Peanut to
Biological Stress Through
Germplasm & Cultural
Enhancement.................. ............ ............ 150,000
-----------------------------------------
Total for Stillwater, OK ............ ............ 150,000
=========================================
OREGON
Corvallis:
Characterization of
Environment & Nutritional
Induced Cytokinin Changes
in Wheat................. ............ ............ 214,800
Partitioning of
Photosynthate as
Influenced by Genotype,
Mycorrhizae & Air
Enriched with CO2........ ............ ............ 175,800
On-Farm Grass Straw
Utilization Development.. ............ ............ 215,200
Germplasm Enhancement and
Cultivar Development of
Blackberry, Strawberry,
Blueberry and Raspberry.. ............ ............ 325,000
-----------------------------------------
Total for Corvallis,
OR................... ............ ............ 930,800
=========================================
PENNSYLVANIA
University Park: The Role of
Variability in the
Distributed Process Modeling
of Soil Water................ ............ ............ 384,300
-----------------------------------------
Total for University
Park, PA............... ............ ............ 384,300
=========================================
Wyndmoor:
Value-Added Products from
Fruit & Vegetable
Processing Wastes........ ............ ............ 691,500
Nutrient Uptake by Plant
Roots from Soils......... 654,564 ............ ............
=========================================
Total for Wyndmoor, PA.. 654,564 ............ 691,500
=========================================
PUERTO RICO
Mayaguez: Transferring
Technology for Improvement of
Agriculture in P.R. and other
Countries.................... ............ ............ 158,700
-----------------------------------------
Total for Mayaguez, PR.. ............ ............ 158,700
=========================================
TEXAS
College Station: Biological
Control of Horn Flies in
Pasture Ecosystems........... ............ ............ 221,500
-----------------------------------------
Total for College
Station, TX............ ............ ............ 221,500
=========================================
Weslaco: Development of
Improved Cultivars and
Efficient Cultural Practices
for Kenaf & Cotalaria........ ............ ............ 343,900
-----------------------------------------
Total for Weslaco, TX... ............ ............ 343,900
=========================================
WASHINGTON
Prosser: Research to Improve
Crop Production Efficiencies
through Germplasm Enhancement
& Cultural Management
Technologies................. ............ ............ 1,436,700
-----------------------------------------
Total for Prosser, WA... ............ ............ 1,436,700
=========================================
Pullman:
Genetically Enhanced Wheat
for Quality Productivity
and Resistance to Biotic
& Abiotic Stresses....... ............ ............ 146,100
Biochemical and Molecular
Regulation of Preharvest
Sprouting and Grain
Dormancy in Wheat........ ............ ............ 67,200
Control of Foliar Diseases
and Smuts of Wheat....... ............ ............ 136,700
-----------------------------------------
Total for Pullman, WA... ............ ............ 1,786,700
=========================================
HEADQUARTERS
Floriculture.................. ............ ............ 200,000
Control of Perennial/Annual
Weeds (Narcotics)............ 1,500,000 ............ ............
Drug Abuse in Rural America... 100,000 ............ ............
Umbrella for Funding Kenaf,
Crambe & Rapeseed Cooperative
Agreements................... ............ 150,300 ............
An Engineering Feasibility
Study To Provide Design &
Cost Estimates For An Ethanol
Pilot Plant.................. ............ 496,500 ............
-----------------------------------------
Total for Headquarters.. 1,600,000 646,800 200,000
=========================================
Subtotal Terminations... 4,203,368 3,646,800 22,107,800
MANAGEMENT
Management Savings (Athens,
GA).......................... ............ ............ 365,200
Management Savings............ ............ ............ 550,000
Program/Administrative
Management Support........... 467,032 ............ ............
-----------------------------------------
GRAND TOTAL............. 4,670,400 3,646,800 23,023,000
------------------------------------------------------------------------
departmentwide obligations
Question. Please provide a summary of obligations, Department-wide,
for each of fiscal years 1996-1998, for the following object
classifications: salaries and benefits; travel; ADP hardware/software
purchases; contracts, grants, and other extramural agreements; and
equipment (other than ADP related).
Answer. The following table provides an estimate of the obligations
for 1996, 1997 and the 1998 budget in millions of dollars, excluding
the Forest Service:
[Dollars in millions]
----------------------------------------------------------------------------------------------------------------
Object class 1996 estimate 1997 estimate 1998 budget
----------------------------------------------------------------------------------------------------------------
Salaries & benefits............................................. $5,103 $5,302 $5,345
Travel.......................................................... 240 216 210
ADP hardware/software purchases................................. 184 136 94
Contracts, grants & other extramural agreements................. 51,064 51,737 52,313
Equipment (other than ADP related).............................. 85 90 75
----------------------------------------------------------------------------------------------------------------
Question. Please provide the Committee with a consolidated listing
of obligations for fiscal years 1996-1998 for the following
crosscutting program activities: civil rights enforcement; support for
1890 Institutions and Historically Black Colleges and Universities;
pest management; food safety; nutrition (excluding benefits); USDA
information activities; Congressional relations and legislative affairs
offices; natural resources and environmental programs; and management
activities to support Department programs.
Answer. The following table contains the information. Please note
the amounts are dollars in millions.
[Dollars in millions]
----------------------------------------------------------------------------------------------------------------
Activities 1996 estimate 1997 estimate 1998 budget
----------------------------------------------------------------------------------------------------------------
Civil rights enforcement........................................ $12 $13 $14
1890 Institutions & HBCU........................................ 90 88 93
Pest management................................................. 204 216 249
Food safety..................................................... 771 806 826
Nutrition....................................................... 424 408 446
Congressional relations & legislative affairs offices........... 51 52 52
Natural resources & environment programs........................ 3,387 3,550 3,672
Management activities to support Department programs 147 138 148
----------------------------------------------------------------------------------------------------------------
Question. Please provide the Committee a Department-wide table
reflecting total staff-years and funding for fiscal years 1993, and
1996-98 for the following position classifications: Executive Senior
Service positions; personnel specialists; computer specialists; budget
analysts; program analysts; contract specialists; accountants and
technicians; administrative; and economists.
----------------------------------------------------------------------------------------------------------------
1993 estimate 1996 estimate 1997 estimate 1998 estimate
-----------------------------------------------------------------------------------
Positions Staff Funds Staff Funds Staff Funds Staff Funds
years (000) years (000) years (000) years (000)
----------------------------------------------------------------------------------------------------------------
Senior Executive Service.... 389 $40,984 352 $39,286 339 $38,814 343 $40,574
Personnel Specialists....... 1,542 74,740 1,228 69,592 1,214 71,603 1,208 71,177
Computer Specialist......... 2,651 127,636 2,526 335,888 2,443 134,036 2,366 126,964
Budget Analysts............. 664 32,806 643 34,298 625 34,654 614 34,111
Program Analysts............ 618 33,050 793 44,551 723 44,721 594 33,917
Contract Specialists........ 884 43,092 754 38,491 704 40,419 677 37,786
Accountants/Technicians..... 2,242 93,880 1,814 85,811 1,715 85,521 1,692 83,220
Administrative.............. 3,590 129,132 2,785 132,720 2,750 129,828 2,611 119,219
Economists.................. 791 53,257 683 50,477 657 50,303 653 51,405
----------------------------------------------------------------------------------------------------------------
government performance review act
Question. The Department have been involved in compliance with the
Government Performance Review Act (GPRA) requirements, including the
development of strategic plans, goals, performance measurements, etc.
By USDA agency, please document staff years and obligations (including
salaries, travel, contracts, training, etc.) incurred to date by fiscal
year, in accomplishing this effort. How much is included in the fiscal
year 1998 budget request for this purpose.
Answer. The information follows:
UNITED STATES DEPARTMENT OF AGRICULTURE STAFF YEARS AND OBLIGATIONS FOR GPRA
[Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
1995 1996 1997 1998
Agency ---------------------------------------------------------------------
SY Funds SY Funds SY Funds SY Funds
----------------------------------------------------------------------------------------------------------------
Farm and Foreign Agricultural Services:
Farm Service Agency................... 1.00 $50 4.00 $200 46.00 $2,695 74.00 $3,048
Risk Management Agency................ 2.00 97 5.00 210 12.00 571 8.00 366
Foreign Agricultural Service.......... 4 260 4 268 5 345 5 355
Rural development \1\..................... 1.50 190 1.00 82 1.50 168 1.50 172
Rural Utilities Service............... ( \1\
) ( \1\ ) ( \1\
) ( \1\ ) ( \1\ ) ( \1\ ) ( \1\ ) ( \1\ )
Rural Housing Service................. ( \1\
) ( \1\ ) ( \1\
) ( \1\ ) ( \1\ ) ( \1\ ) ( \1\ ) ( \1\ )
Rural Business-Cooperative Service.... ( \1\
) ( \1\ ) ( \1\
) ( \1\ ) ( \1\ ) ( \1\ ) ( \1\ ) ( \1\ )
Food, Nutrition, and Consumer Services:
Food and Consumer Service............. 1.25 100 2.00 160 3.25 293 6.50 585
Natural Resources and Environment:
Natural Resources Conservation Serv-
ice.................................. 5.50 590 39.00 3,048 43.00 3,409 40.00 3,015
Food Safety:
Food Safety and Inspection Service.... 1.00 73 3.00 219 4.00 301 5.00 387
Research, Education, and Economics:
Agricultural Research Service......... 1.60 124 1.60 128 1.60 133 1.70 138
Cooperative State Research, Education,
and Extension Service................ 1.51 119 1.27 135 1.28 225 2.10 302
Economic Research Service............. 2.00 130 2.00 133 2.00 137 2.00 139
National Agricultural Statistics
Service.............................. 1.06 115 1.05 121 1.45 164 1.86 179
Marketing and Regulatory Programs:
Animal and Plant Health Inspection
Service.............................. 3.00 226 4.00 291 3.00 240 3.00 131
Agricultural Marketing Service........ 6.96 966 9.76 746 10.01 1,008 7.86 565
Grain Inspection, Packers and
Stockyards Administration............ 4.50 338 4.70 376 5.40 459 5.40 486
Administration:
Office of the Secretary............... ...... ....... ...... ....... ....... ....... ....... .......
Office of the Chief Economist......... ...... ....... 0.57 55 0.57 57 0.57 58
National Appeals Division............. ...... ....... 0.25 23 0.25 24 0.25 25
Office of Budget and Program Analy-
sis.................................. 0.07 3 0.07 3 0.07 3 0.07 3
Office of Small & Disadv. Bus.
Utilization.......................... ...... ....... 0.25 24 0.25 25 0.25 26
Chief Information Officer............. ...... ....... ...... ....... ....... ....... ....... .......
Chief Financial Officer............... ...... ....... 2.50 211 2.50 187 3.00 191
Office of Communications.............. 1.00 20 1.00 21 1.00 21 1.00 21.87
Office of the Inspector General....... 0.50 32 0.60 42 0.80 60 8.00 62
Office of the General Counsel......... 0.05 9 0.07 14 0.10 20 0.10 21
Departmental Administration........... ...... ....... 1.00 79 3.00 203 2.00 167
---------------------------------------------------------------------
Subtotal, GPRA...................... 38.50 3,442 88.69 6,588 148.03 10,748 179.16 10,443
Forest Service............................ ...... ....... ...... ....... ....... ....... ....... .......
---------------------------------------------------------------------
Total, GPRA......................... 38.50 3,442 88.69 6,588 148.03 10,748 179.16 10,443
----------------------------------------------------------------------------------------------------------------
\1\ Data provided for mission area, not for agencies.
employee details/assignments
The fiscal year 1997 appropriations act specifies that ``No
employee of the Department of Agriculture may be detailed or assigned
to any agency or office funded by this Act to any other agency or
office of the Department for more than 30 days unless the individual's
employing agency or office is fully reimbursed by the receiving agency
or office for the salary or expenses of the employee for the period of
assignment.''
Question. Has the USDA Office of General Counsel issued any
opinions, interpretations, or guidance to USDA agencies relative to
this statutory provision? If so, what? Please submit for the record any
written opinions or communications and summaries of oral communications
issued.
Answer. The Office of the General Counsel has issued no written
opinions or memorandum generally addressing the limitation on employee
details contained in section 730 of the Agriculture, Rural Development,
Food and Drug Administration, and Related Agencies Appropriations Act,
1997, or the parallel provision also applying to USDA contained in the
Interior portion of the fiscal year 1997 Omnibus Consolidated
Appropriations Act. Attorneys from OGC have advised Department
officials as to how those provisions should be interpreted. Simply
stated, that advice has been that employees may not be detailed from
any agency or office of the Department to any other such agency or
office for more than 30 days without reimbursement to the employing
agency or office. However, we have also recognized that, under the law,
so long as an employee is performing duties for which any agency or
office receives appropriations, the employee may be paid from the
appropriation for that agency or office no matter where the employee is
geographically or physically located.
Question. Please provide the Committee with a list, by agency, of
each employee detail or assignment (by employing agency, title, and
position) in each of fiscal years 1996 and 1997 for a period up to 30
days, and identify the agency to which that detail or assignment was
made, its length, and the purpose of the detail/assignment. Provide
this same information for employee details/assignments made for a
period of more than 30 days, and indicate the dollar amount of
reimbursement made to the employing agency for such detail/assignment.
Answer. The information follows:
DETAILED FOR LESS THAN 30 DAYS--FISCAL YEAR 1997
--------------------------------------------------------------------------------------------------------------------------------------------------------
Position/agency Detailed to Date/length Purpose
--------------------------------------------------------------------------------------------------------------------------------------------------------
Agr. Economist (FAS)......... FAS........................................... 10/1/96-11/1/96........ Technical assistance--Nicaragua.
Program Analyst (FCS)........ Under Secretary, FNCS......................... 10/1/96-10/26/96....... Support for FCS programs.
Conf. Asst. to Adm. (FCS).... Office of Public Affairs...................... 10/1/96-10/27/96....... Write speeches for the Secretary of Agriculture.
Policy Analyst (FCS)......... Dept. of Treasury............................. 10/1/96-10/12/96....... Assist the leader of the Electronic Benefits
Task Force.
Budget Officer (FCS)......... Modernization of Administrative Processes 10/1/9 6-10/12/96...... Analyze telecommunication activities.
(MAPP).
Writer (FCS)................. Under Secretary, FNCS......................... 10/1/96-10/25/96....... Write speeches, letters, etc.
Secretary (FCS).............. OSEC.......................................... 1/21/9 7-2/21/97....... Secretarial support.
Secretary (NRCS)............. Under Secretary, NRE.......................... 11/8/96-12/5/96........ Clerical support.
Contracting Specialist (NRCS) OO and GSA.................................... 12/16/96-1/31/97....... WEL--Gain managerial experience.
Confidential Assistant (NRCS) FSA........................................... 2/18/97-3/16/97........ Assist at the Field Service Center.
Program Analyst (RMA)........ OBPA.......................................... 10/1/96-10/31/96....... Experience at Dept. level.
Management Analyst (FS)...... Under Secretary, NRE.......................... 10/1/96-10/31/96....... Provide support.
Writer (FS).................. Under Secretary, NRE.......................... 10/1/96-10/31/96....... Provide support.
Writer (FS).................. Office of Civil Rights........................ 10/1/96-10/31/96....... Provide support.
--------------------------------------------------------------------------------------------------------------------------------------------------------
DETAILED FOR MORE THAN 30 DAYS--FISCAL YEAR 1997
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Position/agency Detailed to Date/length Purpose Reimbursed
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Foreign Agr. Affairs Officer Calif. Dept of Agr....................... 2 years.................. IPA--Outreach.......................................... None.
(FAS).
Foreign Agr. Affairs Officer Iowa Dept. of Agr........................ 2 years.................. TDY--Outreach.......................................... None.
(FAS).
Foreign Agr. Affairs Officer Oregon Dept. of Agr...................... 2 years.................. IPA--Outreach.......................................... None.
(FAS).
Export Outreach Specialist (FAS). Colo. Dept. of Agr....................... 2 years.................. TDY--Outreach.......................................... None.
Foreign Agr. Affairs Officer UN FAO................................... 2 years.................. Outreach............................................... None.
(FAS).
Agr. Marketing Specialist (FAS).. U.S. Trade and Development Agency........ 2 years.................. Outreach............................................... None.
Foreign Agr. Affairs Officer World Bank............................... 2 years.................. Outreach............................................... None.
(FAS).
Foreign Agr. Affairs Officer Peace Corps, Albania..................... 2 years.................. Outreach............................................... None.
(FAS).
Agr. Marketing Specialist (FAS).. Congressional Fellowship................. 1 year................... Professional Development............................... None.
Executive Assistant (RHS)........ FSA...................................... 10/1/95-9/30/97.......... Resolution of outstanding large farm loans............. $130,089 in fiscal year 1997.
Financial Analyst (RUS).......... FAS...................................... 10/1/95-9/30/97.......... Assist AID in revitalizing rural infrastructure........ $81,000 in fiscal year 1997.
Special Asst. to Adm. (RHS)...... USDA Civil Rights........................ 10/27/96-9/30/97......... Civil rights activities................................ $99,545 in fiscal year 1997.
Conf. Asst. to Adm. (RBS)........ FCS...................................... 9/17/96-2/28/97.......... Scheduling and office management....................... $42,195 in fiscal year 1997.
Service Center Oper. Dir. (RBS).. Field Service Center Team................ 10/17/95-9/30/97......... Implement the Field Service Centers.................... None.
Deputy Asst. Adm. (RHS).......... FSA...................................... 7/1/96-9/30/97........... Farm loan portfolio problem cases...................... On FSA payroll.
Confidential Assistant (RHS)..... Office of Congressional Affairs.......... 2/28/96-1/18/97.......... Serve as policy advisor................................ $16,964 in fiscal year 1997.
Secretary (RHS).................. Under Secretary, RD...................... 3/4/96-9/30/97........... Clerical assistance.................................... None.
Staff Assistant (RHS)............ Under Secretary, RD...................... 10/1/95-9/30/97.......... Staff assistance....................................... None.
Conf. Asst. to Adm. (RUS)........ White House.............................. 4/1/96-9/30/97........... Assist the Office of Presidential Personnel............ ( \1\ )
Conf. Asst. to Adm. (RHS)........ White House.............................. 12/14/96-9/30/97......... Assist the Office of Presidential Personnel............ ( \1\ )
Conf. Asst. to Adm. (RHS)........ White House.............................. 1/20/97-9/30/97.......... Assist the Office of Presidential Personnel............ ( \1\ )
Grants Management Specialist Dept. of Justice......................... 10/1/96-1/3/97........... Support to the Financial Crime Enforcement Network..... None.
(FCS).
Financial Management Specialist Dept. of Treasury........................ 10/1/96-2/8/97........... Assistance to the EBT Task Force....................... None.
(FCS).
Special Assistant (FCS).......... OCFO..................................... 10/1/96-9/30/97.......... Special financial project.............................. $108,424.
Senior Budget Analyst (FCS)...... Under Secretary, FNCS.................... 10/1/96-3/25/97.......... Budget and legislative support......................... $5,518.
Conf. Asst. To Adm. (FCS)........ Under Secretary, FNCS.................... 10/1/96-2/24/97.......... Administrative support................................. None.
Conf. Asst. To Adm. (FCS)........ Under Secretary, FNCS.................... 10/1/96-5/28/97.......... Legislative support.................................... None.
Accounting Officer (FCS)......... OCFO..................................... 10/1/96-9/30/97.......... Work on a special financial project.................... $63,316.
Staff Assistant (FCS)............ Under Secretary, FNCS.................... 10/1/96-3/30/97.......... Administrative support to the Deputy Under Secretary... $3,754.
Program Specialist (FCS)......... Dept. of Health, Commonwealth of Puerto 10/1/96-12/31/96......... IPA--Develop and help implement a vendor selection $15,186.
Rico. system for WIC.
Accountant (FCS)................. Dept. of Health, Commonwealth of Puerto 2/25/97-1/3/97........... IPA--Assist in reorganizing WIC........................ $39,593.
Rico.
Supervisory Program Specialist Calif. Dept. of Education................ 3/10/97-8/31/97.......... IPA--Assistance on the Summer Food Service Program..... None.
(FCS).
Program Specialist (FCS)......... New Mexico Dept. of Health............... 10/1/96-2/27/97.......... IPA--Assistance on WIC and CSFP........................ $16,715.
Executive Assistant (FCS)........ Texas Dept. of Health.................... 10/1/96-6/5/97........... IPA--Assistance on Civil Rights and EEO................ $15,320.
Program Analyst (FCS)............ Office of Communication.................. 10/1/96-9/30/97.......... Work on FCS AmeriCorps Program......................... None.
Systems Accountant (FCS)......... OCFO..................................... 10/1/96-9/30/97.......... Edit and complete USDA's Accounting Standards Manual... $77,420.
Program Manager (FCS)............ Dept. of Health and Human Services....... 10/14/9 6-10/13/97....... Analyze the impact of Self-Governance on Tribal Health $40,111.
Programs.
Program Analyst (FCS)............ N. Car. Dept of Environment, Health, and 10/14/9 6-10/10/98....... IPA--Assist on several food assistance programs........ $82,481.
Natural Resources.
Supervisory Program Analyst (FCS) OMB...................................... 10/1/96-11/22/96......... OMB's Career Development Exchange Program.............. None.
Secretary (FCS).................. Under Secretary, FNCS.................... 10/1/96-3/30/97.......... Secretarial support.................................... $4,950.
Program Manager (NRCS)........... CSREES................................... 10/1/96 -3/19/97......... Program support and assistance......................... $83,271.
Program Manager (NRCS)........... OPM...................................... 10/2/96-Present.......... Policy and program guidance............................ $114,514.
Computer Specialist (NRCS)....... Under Secretary, NRE..................... 12/1/96-2/10/97.......... Technical advice on automated technology............... $7,697.
Contracting Specialist (NRCS).... OO....................................... 2/1/97-4/21/97........... Purchase Card Implementation Team..................... $3,899.
Contracting Specialist (NRCS).... OBPA..................................... 12/16/97-1/31/97......... WEL--To gain managerial experience..................... None.
Management Analyst (NRCS)........ Office of Communication.................. 4/2/95-2/2/97............ Ameri-Corp issues...................................... $70,000.
Secretary (NRCS)................. Under Secretary, NRE..................... 7/7/96-10/23/97.......... Clerical support....................................... None.
Program Specialist (NRCS)........ Under Secretary, NRE..................... 5/30/96-3/15/97.......... To provide assistance.................................. None.
Program Specialist (NRCS)........ Under Secretary, NRE..................... 8/22/96-2/1/97........... To provide assistance.................................. None.
Program Specialist (NRCS)........ Under Secretary, NRE..................... 5/1/96-10/20/96.......... To provide assistance.................................. None.
Program Specialist (NRCS)........ Under Secretary, NRE..................... 3/24/96-3/16/97.......... To provide assistance.................................. None.
Secretary (FS)................... Under Secretary, NRE..................... 10/1/96-11/8/96.......... To provide support..................................... None.
Secretary (FS)................... Assistant Secretary, ADM................. 10/1/96-11/8/96.......... To provide support..................................... None.
Contracting Specialist (FS)...... OO....................................... 10/1/96-9/30/97.......... Purchase card automation project....................... None.
Accountant (FS).................. Under Secretary, NRE..................... 10/1/96-9/30/97.......... Financial Information System Vision and Strategy....... $72,000.
Accountant (FS).................. Under Secretary, NRE..................... 10/1/96-9/30/97.......... Financial Information System Vision and Strategy....... $69,000.
Management Analyst (FS).......... Under Secretary, NRE..................... 10/1/96-9/30/97.......... Financial Information System Vision and Strategy....... $86,000.
Computer Specialist (FS)......... Under Secretary, NRE..................... 10/1/96-9/30/97.......... Financial Information System Vision and Strategy....... None.
Secretary (FS)................... OSEC..................................... 11/1/96-11/12/97......... To provide support..................................... None.
Program Manager (FS)............. DA....................................... 10/1/96-Present.......... FS Liaison Hazardous Waste Management Support.......... $90,000.
Program Manager (FS)............. DA....................................... 10/1/96-Present.......... FS Liaison Hazardous Waste Management Support.......... $80,000.
Engineer (FS).................... DA....................................... 10/1/96-Present.......... FS Liaison Hazardous Waste Management Support.......... $80,000.
Program Manager (FS)............. OC....................................... 10/1/96-12/7/96.......... To assist with public affairs.......................... None.
Program Manager(FS).............. Under Secretary, NRE..................... 10/1/96-9/30/97.......... To provide support..................................... $12,600.
Accountant (FS).................. Under Secretary, NRE..................... 10/1/96-9/30/97.......... Financial Information System Vision and Strategy....... $56,000.
Computer Specialist (FS)......... MAPP..................................... 10/1/96-9/30/97.......... Modernization of administrative processes.............. $86,000.
Administrator (ARS).............. Under Secretary, REE..................... 10/21/96-Present......... To serve as Acting Under Secretary..................... None.
Program Manager (ARS)............ Under Secretary, REE..................... 10/1/96-1/31/97.......... Mission Support/NS TC Liaison.......................... None.
Accounting Technician (ARS)...... OIRM..................................... 8/5/96-1/31/97........... Administrative support................................. $7,418.
Confidential Assistant (ARS)..... Assistant Secretary, Adm................. 10/1/96-3/1/97........... To provide support..................................... None.
Information Specialist (ARS)..... Under Secretary, REE..................... 1/1/96-4/1/97............ Mission Support/NS TC Liaison.......................... None.
Property Dispatch Technician FSIS..................................... 7/8/96-5/27/97........... To learn computer entry trouble shooting............... $24,758.
(ARS).
Supervisory Computer Specialist MAPP..................................... 8/1/96-9/30/97........... Computer management support............................ $91,579.
(ARS).
Admin & Facilities Manager (ARS). MAPP..................................... 11/3/96-11/2/97.......... Technical expertise.................................... None.
Budget Analyst (ARS)............. OIRM..................................... 6/23/96-6/22/97.......... Budgetary support...................................... On OIRM payroll.
Secretary (ARS).................. Civil Rights............................. 11/3/96-3/31/97.......... Clerical support....................................... None.
Account Technician (ARS)......... OIRM..................................... 8/5/96-1/31/97........... Administrative support................................. None.
Property Dispatch Technician FSIS..................................... 7/8/96-5/27/97........... To learn computer entry trouble shooting............... $7,508.
(ARS).
Home Economist (ARS)............. CSREES................................... 5/20/96-10/31/96......... Administrative & managerial support.................... None.
Secretary (ARS).................. Purchasing Card Implement Team........... 4/1/96-3/31/97........... Clerical support....................................... $20,107.
Secretary(CSREES)................ OSEC..................................... 10/1/96-9/30/97.......... Secretarial assistance................................. $38,352.
Secretary (CSREES)............... Under Secretary, REE..................... Indefinite............... Mission support, secretarial assistance................ None.
Associate Administrator (CSREES). Under Secretary, REE..................... Indefinite............... Mission support........................................ None.
Special Assistant (CSREES)....... Under Secretary, REE..................... Indefinite............... Communications Coordinator............................. None.
Social Sci. Analyst (ERS)........ Office of Civil Rights................... 11/1/96-1/3/97........... Civil Rights Task Force................................ None.
Social Sci. Analyst (ERS)........ NAL...................................... 2/24/97-8/2/97........... File Automation........................................ None.
Agr. Economist (ERS)............. FAS...................................... 9/30/96-2/1/97........... Technical assist., Turkey.............................. $41,000.
Budget Coordinator (ERS)......... Under Secretary, REE..................... Indefinite............... Mission Support/Budget Coordination.................... None.
Supervisory Agricultural FAS...................................... 10/1/96-9/30/97.......... Agribusiness advisor................................... $127,000.
Economist (GIPSA).
Agr. Commodity Grader(AMS)....... NRCS..................................... 37 Days.................. Assist with an 1890 scholars data base project......... None.
Secretary (AMS).................. Civil Rights Office...................... 155 Days................. Assist with civil rights case load..................... None.
Program Assistant (AMS).......... Civil Rights Office...................... 211 Days................. Assist with civil rights case load..................... None.
Program Analyst(APHIS)........... NFC...................................... 1/27/97-3/26/97.......... Conduct misconduct investigations...................... $17,600.
Integrated System and Acquisition MAPP..................................... 11/95-9/97............... On team to redesign procurement system................. $180,978.
Project (ISAP) Manager (APHIS).
Supervisory Computer Specialist MAPP..................................... 3/96-3/97................ On team to redesign T&A system......................... $43,833.
(APHIS).
Computer Specialist (APHIS)...... MAPP..................................... 10/96-9/97............... On team to redesign procurement system................. $42,432.
Veterinarian Medical Officer OSEC..................................... 1/7/96-2/28/97........... Assist on food safety project.......................... $42,432.
(APHIS).
Supervisory Computer Specialist MAPP..................................... 7/96-9/97................ On team to redesign procurement system................. None.
(APHIS).
Personnel Management Specialist MAPP..................................... 3/3/96-9/30/97........... On team to redesign procurement system................. $98,103.
(APHIS).
Management Analyst (APHIS)....... OCFO..................................... 10/1/95-3/16/97.......... On team to develop financial systems................... $116,441.
Systems Accountant (APHIS)....... OCFO..................................... 10/1/96-9/30/97.......... On team to develop financial systems................... $133,649.
Budget Analyst (APHIS)........... OSEC..................................... 6/10/96-6/6/97........... Assist Service Center Implementation Team.............. $67,588.
Branch Chief (APHIS)............. MAPP..................................... 10/96-2/97............... On team to implement VISA card reform.................. None.
Special Assistant to the Assistant Secretary, MRP................. 5/96-9/97................ To provide support..................................... None.
Administrator (APHIS).
Confidential Assistant to the Assistant Secretary, MRP................. 10/96-9/97............... To provide support..................................... None.
Administrator (APHIS).
Confidential Assistant (FSIS).... AMS...................................... 5/94-1/97................ Assist with communications............................. None.
Secretary (FSIS)................. OSEC..................................... 11/95-Present............ Clerical support....................................... Agreement being developed.
Secretary (FSIS)................. DA....................................... 1/96-Present............. Clerical support....................................... None.
Food Technologist (FSIS)......... FAS...................................... 3/96-3/97................ Food technology support................................ None.
Budget Analyst (FSIS)............ ARS...................................... 9/96-1/97................ Staff assistance....................................... $22,800.
Program Analyst (FSIS)........... NRCS..................................... 12/96-2/97............... Civil Rights Work Group................................ None.
Industrial Engineer (FSIS)....... ARS...................................... 1/97-5/97................ Staff assistance....................................... None.
Deputy Inspector General......... Dept. of Trans. (DOT).................... 10/1/96-Present.......... Acting Principal Deputy Inspector General.............. $75,000.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
DETAILED FOR MORE THAN 30 DAYS--FISCAL YEAR 1996
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Position/agency Detailed to Dates Purpose Reimbursed
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Conf. Asst. to Adm. (RHS).......... White House............................. 5/20/94--3/30/96.......... Assist Voting Office.............................................. ( \1\ )
Conf. Asst. to Adm. (RHS).......... White House............................. 11/10/9 4-8/31/96......... Assist Domestic Policy Office..................................... ( \1\ )
Conf. Asst. to Adm. (RHS).......... White House............................. 3/8/96-9/27/96............ Assist Office of Presidential Personnel........................... ( \1\ )
Correspondence Control Assistant Under Secretary, FNCS................... 12/24/95-9/26/96.......... Secretarial support............................................... None.
(FCS).
Conf. Asst. To Adm. (FCS).......... Office of Communications................ 11/8/95-9/30/96........... Write speeches for the Secretary.................................. None.
Supervisory Program Analyst (FCS).. Office of Civil Rights.................. 11/30/92-3/31/96.......... Civil rights enforcement.......................................... None.
Program Manager (FCS).............. FAS--South Africa....................... 11/15/95-2/15/96.......... Guidance on FCS programs.......................................... $31,807.
Grants Management Specialist (FCS). Dept. of Justice........................ 2/25/96-9/30/96........... Support Financial Crime Enforcement Network....................... None.
Property Management Specialist OIRM.................................... 2/4/96-8/17/96............ Telecomm. work.................................................... $42,276.
(FCS).
Supervisor Program Manager (FCS)... Under Secretary, FNCS................... 3/31/96-7/29/96........... Serve in the absence of the Executive Assistant to Under Secretary None.
Accountant (FCS)................... OIG..................................... 9/5/95-1/2/96............. Assistance on use of automated accounting systems................. None.
Assistant to the Administrator Under Secretary for FNCS................ 10/30/9 4-8/2/96.......... Program support................................................... None.
(FCS).
Assistant Administrator (FCS)...... Dept. of Treasury....................... 11/15/9 3-1/20/96......... Leader of the Electronic Benefits Task Force (EBTF)............... None.
Policy Analyst (FCS)............... Dept. of Treasury....................... 1/24/94-9/30/96........... Assistant Leader of the EBTF...................................... None.
Financial Management Specialist Dept. of Treasury....................... 11/15/93-9/30/96.......... Assistance on EBTF................................................ None.
(FCS).
Special Assistant for Policy & OCFO.................................... 10/1/95-9/30/96........... Special financial project......................................... $104,510.
Planning (FCS).
Senior Budget Analyst (FCS)........ Under Secretary, FNCS................... 7/9/95-9/30/96............ Budget and legislative support.................................... None.
Assistant Project Manager (FCS).... Under Secretary, FNCS................... 2/13/96-7/31/96........... Support for Team Nutrition........................................ None.
Conf. Asst to Adm. (FCS)........... Under Secretary, FNCS................... 1/22/95-9/28/96........... Administrative support............................................ None.
Conf. Asst. to Adm. (FCS).......... Under Secretary, FNCS................... 9/5/93-9/30/96............ Administrative support............................................ None.
Conf. Asst. to Adm. (FCS).......... Under Secretary, FNCS................... 10/3/93-9/30/96........... Legislative support............................................... None.
Correspondence Assistant (FCS)..... Under Secretary, FNCS................... 10/18/93-11/25/95......... Secretarial support............................................... None.
Conf. Asst. to Adm. (FCS).......... Under Secretary, FNCS................... 3/2/95-10/14/95........... Administrative support............................................ None.
Accounting Officer (FCS)........... OCFO.................................... 11/8/93-9/30/96........... To work on a special project...................................... $83,346.
Staff Assistant (FCS).............. Under Secretary, FNCS................... 2/20/94-9/30/96........... Administrative support............................................ None.
Budget Officer (FCS)............... MAPP.................................... 5/6/96-9/30/96............ Telecommunication activities...................................... $24,037.
Writer (FCS)....................... Under Secretary, FNCS................... 5/19/96-9/30/96........... To write speeches, letters, etc................................... None.
Program Analyst (FCS).............. Under Secretary, FNCS................... 8/19/96-9/30-96........... Support for FCS programs.......................................... None.
Policy Analyst (FCS)............... New Mexico Dept. of Human Services...... 2/15/94-8/30/96........... IPA--Provide assistance to EBT.................................... $63,937.
Program Specialist (FCS)........... Dept. of Health, Commonwealth of Puerto 10/23/95-9/30/96.......... IPA--Develop and help implement a vendor selection system for WIC $54,858.
Rico.
Accountant (FCS)................... Dept. of Health Commonwealth of Puerto 5/12/96-8/31/96........... IPA--Assist in reorganizing WIC................................... $21,431.
Rico.
Supervisory Program Specialist Calif. Dept. of Education............... 10/26/9 5-9/30/96......... IPA--Provide technical assistance on Summer Food Service Program.. None.
(FCS).
Program Specialist (FCS)........... New Mexico Dept. of Health.............. 2/8/93-9/30/96............ IPA--Assistance on WIC and CSFP................................... $50,146.
Executive Assistant (FCS).......... Texas Dept. of Health................... 6/6/94-9/30/96............ IPA--Assistance on civil rights and EEO........................... $37,980.
Program Analyst (FCS).............. Office of Communications................ 6/12/94-9/30/96........... To work on FCS Ameri-Corps Program................................ None.
Supervisory Program Analyst (FCS).. OMB..................................... 7/15/96-9/30/96........... Career Development Exchange Program............................... None.
Executive Assistant (NRCS)......... Under Secretary, NRE.................... 3/24/93-3/16/96........... Assistance on NRE issues.......................................... None.
Secretary (FS)..................... Under Secretary, NRE.................... 10/1/95-9/30/96........... Support........................................................... None.
Program Specialist (FS)............ Under Secretary, NRE.................... 10/1/95-9/30/96........... Support........................................................... None.
Writer (FS)........................ Office of Communications................ 5/1/96-9/30/96............ Support........................................................... $8,866.
Program Specialist (FS)............ OIRM.................................... 5/1/96-9/30/96............ Support........................................................... None.
Secretary (FS)..................... Assistant Secretary, ADM................ 10/1/95-9/30/96........... Support........................................................... None.
Accountant (FS).................... Under Secretary, NRE.................... 10/1/95-9/1/96............ Financial Information System Vision and Strategy.................. $75,086.
Accountant (FS).................... Under Secretary, NRE.................... 10/1/95-9/30/96........... Financial Information System Vision and Strategy.................. $65,263.
Accountant (FS).................... Under Secretary, NRE.................... 3/18/96-9/30/96........... Financial Information System Vision and Strategy.................. $36,007.
Management Analyst (FS)............ Under Secretary, NRE.................... 10/1/96-9/30/96........... Financial Information System Vision and Strategy.................. $84,886.
Management Analyst (FS)............ MAPP.................................... 10/1/96-9/30/96........... Modernization of administrative processes......................... None.
Program Specialist (FS)............ DA...................................... 10/1/96-9/30/96........... Hazardous waste management support................................ $86,000.
Program Specialist (FS)............ DA...................................... 10/1/96-9/30/96........... Hazardous waste management support................................ $76,000.
Engineer (FS)...................... DA...................................... 10/1/96-9/30/96........... Hazardous waste management support................................ $76,000.
Messenger (FS)..................... Under Secretary, NRE.................... intermittently............ Support........................................................... None.
Writer (FS)........................ Office of Communications................ 10/17/95-9/30/96.......... Support........................................................... None.
Entomologist (FS).................. Hispanic Association of Colleges and 10/1/95-9/30/96........... Support........................................................... None.
Universities.
Confidential Assistant (FSIS)...... APHIS................................... 6/94-4/96................. Director of Legislative Affairs................................... None.
Program Analyst (FSIS)............. OP...................................... 11/94-10/95............... Analytical work on Year 2000...................................... None.
Food Technologist (FSIS)........... CSREES.................................. 6/95-10/95................ Biotechnology expertise........................................... None.
Staff Assistant (FSIS)............. OSEC.................................... 11/95-3/96................ Staff assistance.................................................. None.
Staff Assistant (FSIS)............. OSEC.................................... 3/96-6/96................. Staff assistance.................................................. None.
Program Assistant (FSIS)........... OP...................................... 4/96-6/96................. Clerical support.................................................. None.
Asst. to the Deputy Admin. (FSIS).. DA...................................... 4/96-10/96................ Senior staff assistance........................................... None.
Program Analyst (ARS).............. Under Secretary, REE.................... 8/15/96-9/30/96........... Mission Support, NSTC Liaison..................................... None.
Chemist (ARS)...................... Under Secretary, REE.................... 5/20/96-9/15/96........... Special Management Intern Program................................. None.
Supervisory Computer Specialist MAPP.................................... 8/96-9/30/96.............. Computer management support....................................... None.
(ARS).
Supervisory Purchasing Agent (ARS). MAPP.................................... 3/6/95-9/30/96............ Administrative and clerical support............................... $39,435.
Contract Specialist (ARS).......... MAPP.................................... 10/15/95-9/30/96.......... Credit Card Project............................................... $52,188.
Budget Analyst (ARS)............... OIRM.................................... 6/23/96-9/30/96........... Budgetary support................................................. $16,655.
Secretary (ARS).................... Purchasing Card Implementation Team..... 4/1/96-9/30/96............ Clerical support.................................................. $18,574.
Confidential Assistant (ARS)....... Assistant Secretary, ADM................ 7/28/96-9/30/96........... Department support................................................ None.
Confidential Assistant (ARS)....... Under Secretary, REE.................... 10/1/95-9/30/96........... Mission support................................................... None.
Secretary (CSREES)................. OSEC.................................... 9/22/95-9/30/96........... Secretarial support............................................... None.
Computer Specialist (CSREES)....... Washington Service Center............... 11/20/95-3/31/96.......... Computer assistance............................................... None.
Computer Specialist (CSREES)....... MAPP.................................... 10/31/95-2/28/96.......... Computer assistance............................................... $14,234.
Legislative Affairs Assistant National Performance Review............. 5/5/96-9/15/96............ Technical support................................................. None.
(CSREES).
Secretary (CSREES)................. Under Secretary, REE.................... 5/96-9/96................. Mission support................................................... None.
Ecologist (CSREES)................. Under Secretary, REE.................... 8/12/96-9/15/96........... NSTC Liaison...................................................... None.
Secretary (CSREES)................. OP...................................... 12/19/95-1/19/96.......... Secretarial assistance............................................ None.
Agr. Ext. Specialist (CSREES)...... OSEC.................................... 5/1/95-4/30/96............ Chair the Water Quality Initiative................................ None.
Secretary (ERS).................... Under Secretary, REE.................... 12/23/95-3/28/96.......... Secretarial Assistance............................................ None.
Division Director (ERS)............ Under Secretary, REE.................... 9/15/96-9/30/96........... Mission support................................................... None.
Agr. Economist (ERS)............... FAS..................................... 9/2/96-9/30/96............ Technical Assistance--Turkey...................................... $10,500.
Secretary (NASS)................... Under Secretary, REE.................... 3/12/96-12/23/95.......... Secretarial support............................................... None.
Secretary (NASS)................... Under Secretary, REE.................... 10/1/95-9/28/96........... Secretarial support............................................... None.
Commodity Grader (AMS)............. APHIS................................... 4/96-6/96................. To assist with Karnal Bunt........................................ $16,000.
Commodity Grader (AMS)............. APHIS................................... 4/96-6/96................. To assist with Karnal Bunt........................................ $17,000.
Commodity Grader (AMS)............. APHIS................................... 4/96-6/96................. To assist with Karnal Bunt........................................ $20,000.
Commodity Grader (AMS)............. APHIS................................... 4/96-6/96................. To assist with Karnal Bunt........................................ $22,000.
Commodity Grader (AMS)............. APHIS................................... 4/96-6/96................. To assist with Karnal Bunt........................................ $22,000.
Commodity Grader (AMS)............. APHIS................................... 4/96-6/96................. To assist with Karnal Bunt........................................ $22,000.
Commodity Grader (AMS)............. APHIS................................... 4/96-6/96................. To assist with Karnal Bunt........................................ $22,000.
Commodity Grader (AMS)............. APHIS................................... 4/96-6/96................. To assist with Karnal Bunt........................................ $16,000.
Commodity Grader (AMS)............. APHIS................................... 4/96-6/96................. To assist with Karnal Bunt........................................ $23,000.
Commodity Grader (AMS)............. APHIS................................... 4/96-6/96................. To assist with Karnal Bunt........................................ $23,000.
Commodity Grader (AMS)............. APHIS................................... 4/96-6/96................. To assist with Karnal Bunt........................................ $23,000.
Commodity Grader (AMS)............. APHIS................................... 4/96-6/96................. To assist with Karnal Bunt........................................ $23,000.
Commodity Grader (AMS)............. APHIS................................... 4/96-6/96................. To assist with Karnal Bunt........................................ $23,000.
Commodity Grader (AMS)............. APHIS................................... 4/96-6/96................. To assist with Karnal Bunt........................................ $23,000.
Commodity Grader (AMS)............. APHIS................................... 4/96-7/96................. To assist with Karnal Bunt........................................ $27,000.
Secretary (AMS).................... Office of Civil Right................... 4/96-9/96................. Secretarial support............................................... None.
Program Support Assistant (AMS).... Office of Civil Rights.................. 4/96-9/96................. Secretarial support............................................... None.
Marketing Specialist (AMS)......... MAPP.................................... 10/95-9/96................ Telecommunication project......................................... $12,000.
Management Analyst (APHIS)......... Assist . Sec. Adm....................... 4/29/96-9/30/96........... Perform Dept. Adm. workload analysis study........................ None.
Secretary (APHIS).................. National Performance Review............. 10/23/9 5-1/21/96......... Provide secretarial support....................................... None.
Program Analyst (APHIS)............ OP...................................... 9/12/94-4/12/96........... Develop guidelines for accommodating persons with disabilities.... None.
Director (APHIS)................... ARS..................................... 3/3/96-9/27/96............ Acting Director Plum Island Animal Disease Center................. $32,751.
Supervisory Agricultural Economist FAS..................................... 10/1/95-9/30/96........... To serve as an agribusiness advisor............................... $107,000.
(GIPSA).
Branch Chief (OIG)................. MAPP.................................... 6/14/96-8/25/96........... Telecommunication project......................................... None.
Lawyer (OGC)....................... NRCS.................................... 10/1/95-8/30/96........... Legal assistance on Wetlands Reserve Program...................... $34,617.
Lawyer (OGC)....................... Committee on Agriculture................ 10/1/95-11/30/95.......... Legal assistance on Food Stamps and CSFP.......................... $13,613.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ As authorized by 3 U.S.C. 112, the effective date for Reimbursed of White House details begins 180 calendar days after the starting date of the detail in the fiscal year. This provision
applies anew at the beginning of each fiscal year. Reimbursement is requested for details exceeding this 180-day period per fiscal year.
DETAILS UNDER 30 DAYS--FISCAL YEAR 1996
----------------------------------------------------------------------------------------------------------------
Position/agency Detailed to Date/length Purpose
----------------------------------------------------------------------------------------------------------------
Agr. Commodity Grader-Grain (GIPSA) APHIS............. 5/28/96-6/27/96........... To work on Karnal Bunt.
Agr. Commodity Grader-Grain (GIPSA) APHIS............. 5/28/96-6/27/96........... To work on Karnal Bunt.
Agr. Commodity Grader-Grain (GIPSA) APHIS............. 5/28/96-6/27/96........... To work on Karnal Bunt.
Agr. Commodity Grader-Grain (GIPSA) APHIS............. 6/12/96-7/12/96........... To work on Karnal Bunt.
Agr. Commodity Grader-Grain (GIPSA) APHIS............. 6/03/96-7/03/96........... To work on Karnal Bunt.
Agriculture Commodity Tech. Grain APHIS............. 5/28/96-6/26/96........... To work on Karnal Bunt.
(GIPSA).
Agriculture Commodity Tech. Grain APHIS............. 5/28/96-6/26/96........... To work on Karnal Bunt.
(GIPSA).
Agr. Commodity Grader-Grain (GIPSA) APHIS............. 6/04/96-7/02/96........... To work on Karnal Bunt.
Agr. Commodity Grader-Grain (GIPSA) APHIS............. 6/20/96-7/12/96........... To work on Karnal Bunt.
Indl. Specialist, Agriculture APHIS............. 5/28/96-6/18/96........... To work on Karnal Bunt.
(GIPSA).
Agr. Commodity Grader-Grain (GIPSA) APHIS............. 5/29/96-6/19/96........... To work on Karnal Bunt.
Agr. Commodity Tech. Grain (GIPSA). APHIS............. 5/28/96-6/17/96........... To work on Karnal Bunt.
----------------------------------------------------------------------------------------------------------------
discrimination complaints/civil rights enforcement
Question. Mr. Secretary, you have worked to investigate and address
complaints of discrimination and lack of service to minorities and
small farmers in USDA farm loan programs. I know that your civil rights
action team will soon be releasing its recommendations. Is the
moratorium on loan foreclosures still in effect?
Answer. It is not really a moratorium, it is a review. All pending
foreclosures will continue to be reviewed by state and federal
officials to ensure that discrimination or unfair treatment was not a
factor. If discrimination may have played a factor, the foreclosure is
stopped. However, if there is no finding of discrimination, the
foreclosure goes forward.
Question. Can you summarize the major findings of the team and what
safeguards it recommends be instituted to make sure discrimination does
not continue or occur again?
Some have suggested that this problem might be attributed to the
county committee system. Did the action team find this to be the case?
Is it recommending any changes in the county committee structure?
Answer. The Civil Rights Action Team made 92 recommendation in the
areas of management, accountability, program delivery, workforce
diversity and the organization structure of civil rights. The report
also includes actions plans for implementing the recommendations. Most
are feasible. Some may need further review. I have set a goal of
implementing those recommendations that do not require legislative
action within the next six months.
The most dramatic changes at USDA will come from our efforts to
reign in authority to ensure accountability. USDA will seek legislative
authority to convert all non-federal county positions in the Farm
Services Agency to federal employee status.
Other immediate actions include: working to eliminate the backlog
in both program and EEO complaints; vesting the Assistant Secretary for
Administration with the authority to review the civil rights records of
agency heads and Subcabinet officials; creating a civil rights arm of
the Office of the General Counsel; establishing a national commission
on small farms to develop an aggressive strategy for keeping this
important American tradition alive and well; creating a department-wide
workforce planning and recruitment effort; and requiring annual civil
rights training for all employees.
A copy of the civil Rights Action Team Report is also provided for
the use of the committee.
[Clerk's note.--The Civil Rights Action Team Report does not appear
in the hearing record, but is available for review in the
subcommittee's files.]
civil rights
Question. At your request Mr. Secretary, additional funds were
provided for fiscal year 1997 to reduce the backlog of equal employment
opportunity and program discrimination complaint cases.
How did this backlog accumulate?
Answer. The backlog in employment cases resulted from a dramatic
increase in the number of complaints being filed in the past five
years, without a similar increase in the resources assigned. For
example, the average number of counseling contacts annually for fiscal
years 1987-1991 was 1360. For fiscal years 1992-1996, we experienced a
39 percent increase in counseling contacts to an annual average of
1884. More dramatically, the average number of formal complaints filed
rose from an annual average of 271 for fiscal years 1987-1991 to an
annual average of 630 for fiscal years 1992-96, a 132 percent increase.
I will provide a table for the record showing the annual figures.
[The information follows:]
----------------------------------------------------------------------------------------------------------------
Fiscal year Counseled Formal filed Formal closed
----------------------------------------------------------------------------------------------------------------
1987............................................................ 1,469 332 363
1988............................................................ 1,332 277 369
1989............................................................ 1,078 247 327
1990............................................................ 1,349 211 280
1991............................................................ 1,572 288 261
1992............................................................ 1,628 462 229
1993............................................................ 2,005 683 459
1994............................................................ 2,223 666 501
1995............................................................ 1,732 772 383
1996............................................................ 1,830 566 1,035
----------------------------------------------------------------------------------------------------------------
There are multiple reasons for the increase, and we do not pretend
to be able to state with absolute certainty how much each factor
contributed. However, we believe two changes in law and regulation were
major factors. First, the Civil Rights Act of 1991 provided for
compensatory damages in cases of intentional discrimination. This
element of relief, whatever its merits otherwise, has raised the
determination of employees to pursue their complaints further into the
process. Second, the Equal Employment Opportunity Commission issued new
regulations on October 1, 1993. These regulations established time
frames for the informal process which made it more difficult to reach
closure before a complaint became formal.
USDA management also must accept responsibility for allowing the
situation progress to the point it has. During the period from March
1992 until November 1995, the organization responsible for adjudicating
formal complaints underwent several official and unofficial
reorganizations, including 12 destabilizing changes in management. It
has become clear that increased resources will be needed on a permanent
basis to made the necessary improvements in this area.
Question. Is progress being made with the additional funds
provided?
Answer. The funds are being used to track, process and resolve the
USDA employee complaints. In addition, there are plans to assemble two
major staffs to review and to the extent possible resolve all of the
1450 outstanding employee complaints and 550 outstanding program
complaints. It is my understanding that findings indicate that
significant progress has been made toward investigating and holding
hearings regarding the employment complaints. It is our expectation
that this will lead to a significant reduction. However, the findings
further indicate that most of the 550 program complaints have not been
investigated. Further investigation will be necessary for most of the
program complaints prior to the time these complaints can be resolved.
Question. What is being done to ensure that this problem does not
recur in the future?
Answer. We are trying to attack the problem from three directions.
First, it is critical that we improve our rate of resolving complaints
during the informal stages. We will be exploring more use of mediation,
and will soon be deciding on the optimum placement of the EEO
counseling function. Second, we will be maintaining an increased staff
of adjudicators to handle formal complaints, and trying to improve
their productivity through training and process reengineering. Third,
we will be initiating efforts to prevent complaints in the first place.
Supervisors need to be better trained in performing their jobs, and we
are taking steps to institutionalize such training. Supervisors also
need to be held accountable, so problems can be corrected before they
multiply. Finally, we need to provide and strengthen alternative
methods of addressing disputes in the workplace; employees need an
effective avenue to get their concerns addressed without filing a
discrimination complaint when discrimination is not the real problem.
market access program
Changes have been made in the Market Access Program (MAP) to make
it more targeted and to increase small business participation in the
program. For fiscal year 1998, the budget includes the full authorized
permanent funding level of $90 million for MAP.
Question. How important is the Market Access Program to the
promotion and expansion of U.S. agricultural exports?
Answer. The Market Access Program has been an important contributor
to the gain in U.S. world market share of sales of consumer-oriented
products since 1985. During this period, MAP and its predecessor, the
Targeted Export Assistance Program, have helped this share grow from 11
percent to 18 percent in 1994. Each percent gain represents sales of
more than $1 billion. While changes in the value of the dollar have
added to the growth, analysis carried out by FAS has indicated that
market promotion contributed to more than half of the total increase.
Mr. Secretary, your prepared testimony indicates that ``additional
program improvements have recently been made which are designed to
broaden participation, clarify program participation criteria,
strengthen evaluation and accountability, and simplify program
requirements for participation.''
Question. How have these program changes been executed and could
you briefly summarize the changes made and the reasons for those
changes?
Answer. Consistent with the Administration's commitment to
streamlining government activity, new MAP regulations were published on
February 1, 1995, that increased flexibility and simplified program
requirements for participants. The revised regulations also reflected
public comments and changes made by the Omnibus Budget Reconciliation
Act of 1993. Among the changes made by the rule are:
(a) U.S. exporters no longer need to show that a U.S. agricultural
commodity faces an unfair trade practice in an overseas market in order
to participate in the program;
(b) small businesses and cooperatives are accorded priority
consideration in the allocation of brand promotion funding;
(c) application and allocation approval criteria are clarified;
(d) procedures for appealing compliance findings are added; and
(e) paperwork requirements have been reduced by simplifying
contracting standards and procedures and streamlining the format for
various program documents.
With regards to evaluation, FAS allocates funds in a manner that
effectively supports decision-making initiatives of the Government
Performance and Results Act (GPRA) of 1993. FAS considers a number of
factors when reviewing MAP proposals, several of which relate to export
performance, both past performance and projected export goals. In fact,
in the MAP competitive allocation process, 60 percent of the total
weight relates to export performance.
In addition, each participant is required to conduct an annual
program evaluation to determine the effectiveness of the participant's
strategy in meeting overall goals. Participants must identify goals to
be met within a specified time, a schedule of measurable milestones for
gauging success, plans for achievement, and results of activities at
regular intervals. The evaluation results are analyzed by FAS and help
guide the development and scope of a participant's program.
With these changes in place, program management and accountability
have been strengthened. For example, over the last 6 years compliance
findings against program participants have decreased and repayments by
program participants for unauthorized or inappropriate expenditures
have been less than 1 percent of the total MAP funding level, a clear
indication that these steps are working.
export enhancement program
The President's fiscal year 1998 budget proposes to make $500
million available for the Export Enhancement Program, the maximum level
permitted by provisions of the 1996 Farm Bill. Quite frankly, EEP was
limited in the appropriations act for fiscal year 1997 and in previous
years because there was a general consensus that the maximum permitted
level would not be required.
Question. Do you expect to utilize the $100 million currently
available for the Export Enhancement Program, and why do you believe
that the $500 million maximum program level will be required in the
fiscal year 1998?
Answer. EEP allocations for the July 1996-June 1997 period,
announced last summer, were at the maximum quantity levels allowed
under the Uruguay Round Agreement reduction commitments. However, at
present, we do not believe that current world market conditions warrant
the use of subsidies by anyone. In general, U.S. supplies are
relatively tight, and we are exporting what we have available without
the need to use subsidies. Unfortunately, the responsible restraint by
the United States has been tested by renewed subsidization by the
European Union, which began in September 1996. We believe it is
extremely important that we maintain a strong position in order to
protect our agricultural trade interests. Resumption of EEP is an
option we may need to consider and we have, therefore, provided funding
for EEP in 1998 at the maximum level permitted by the 1996 Farm Bill.
proposed public law 480 title i rescission
The Administration proposes a $50 million total reduction in fiscal
year 1997 appropriations for Public Law 480 Title I (a $3.5 million
rescission of Title I ocean freight differential funds and a rescission
of $46.5 million in subsidy budget authority in the direct credit
program). The budget indicates that commodity shipments would be
reduced by 200,000 metric tons as a result of this proposed rescission.
However, it also indicates that allocations of Title I commodity
assistance that have already been announced for fiscal year 1997 would
not be affected by the proposed rescission because the reduction in
program funding will be taken from a reserve of unallocated funds and
from unobligated funds carried over from fiscal year 1996.
Question. With respect to the proposed rescission of Public Law 480
Title I funding, what is the total reserve of unallocated funds and
unobligated funds carried over from fiscal year 1996?
Answer. The total reserve of unallocated fiscal year 1997 funds is
$24.6 million, and the unobligated funds carried over from fiscal year
1996 total $32.9 million. The total from both sources is $57.5 million.
Question. How much of the proposed rescission would come from the
reserve and how much would come from fiscal year 1996 carryover
balances?
Answer. The fiscal year 1996 carryover funds have been made
available for programming in fiscal year 1997 through the apportionment
process and, thus, funding from both sources is now commingled. The
rescission proposes to reduce budget authority for the Title I credit
account by $46.5 million and for the ocean freight differential account
by $3.5 million. Upon enactment of the rescission, just over $7 million
would remain in the ocean freight differential account for fiscal year
1997. We believe this remaining reserve is needed to meet current
programming plans because the rate of ocean freight differential
payments has been increasing recently. If our original estimate of the
costs of meeting cargo preference requirements for Title I proves to
have been too low, we will need the reserve to meet the higher costs.
Question. Does the proposed rescission have the impact of reducing
commodity shipments by 200,000 metric tons because, in its absence, the
unobligated and reserve funds would be spent?
Answer. Our tonnage estimates for Public Law 480 programming are
always based on the assumption that program funds will be fully
obligated. Consequently, when we reduce Title I budget authority by $50
million, we need to make a corresponding reduction in our tonnage
estimate.
Question. The law permits available funds to be transferred between
titles of the Public Law 480 program. Has the Administration concluded
that if unobligated and carryover funds are not required for Title I of
the program, they also will not be required to supplement funds for
Titles II and III of the program this year?
Answer. The decision to propose the Title I rescission was based on
the need to identify an offset for the supplemental that has been
requested that includes the Special Supplemental Nutrition Program for
Women, Infants, and Children. However, at this time we have no reason
to believe that funding will be inadequate for the Titles II and III
programs this year. It is also important to note that, even with the
rescission in Title I, we estimate total Public Law 480 commodity
programming of 3.2 million metric tons for the year, which is still
above the 3.0 million metric tons we programmed last year.
public law 480--fiscal year 1998 request
The fiscal year 1998 request proposes to maintain funding for
Titles II and III of the Public Law 480 program, but to reduce funding
available for Title I credit sales. Direct credit authority is reduced
from the fiscal year 1997 level of $227 million to $113 million (a
reduction of $114 million); the subsidy appropriation is reduced from
$186 million to $88 million (a reduction of $98 million); and ocean
freight differential costs are reduced from $14 million to $10 million
(a reduction of $4 million). The budget also proposes to transfer
budget and expenditures for the Title I concessional sales program from
the international affairs function to the agricultural function. The
rationale given for this shift is to allow the Title I program to be
managed and budgeted as part of a consistent package of agricultural
export programs.
Question. Why does the fiscal year 1998 request propose to reduce
funding for the Public Law 480 Title I program?
Answer. The reduction proposed for Title I programming in fiscal
year 1998 reflects constraints on discretionary spending and the
difficult choices that had to be made in order to meet the President's
commitment of balancing the Federal budget by fiscal year 2002. It is
important to note that 1998 funding for Titles II and III of Public Law
480 will remain largely unchanged from 1997 enacted levels, which
ensures that adequate resources will be available to meet the most
serious food assistance needs, including emergencies.
Question. Is this proposed reduction in any way related to the
proposed transfer of the program from the international affairs
function to the agricultural function of the budget?
Answer. The reduction does not result from the transfer of Title I
from the international affairs function to the agriculture function. In
fact, one of the primary reasons for making the transfer is to improve
the Department's ability to support future budgetary resources for the
program. Because the market development objectives of Title I are more
closely aligned with the purposes of the agriculture function, it will
be easier to allocate funding for Title I there rather than in the
international affairs function where the primary objectives are foreign
policy and national security.
Question. I thought changes in budget presentation were made by OMB
after consultation with the Budget Committees of the Congress. Why is
this change proposed formally in the President's budget?
Answer. It is our understanding that OMB did consult with senior
staff of the Budget Committees and the Agriculture Appropriations
Subcommittees. Following those consultations, the President's budget
was modified to move the Title I credit account to the agriculture
function. Because of time constraints, ocean freight differential
funding for Title I could not be transferred and remains in the
international affairs function. However, we plan to modify the budget
presentation for the 1999 budget so the ocean freight differential
funding will also be included in the agriculture account.
Question. Are you asking that we legislate the change?
Answer. The President's budget has already transferred the Title I
credit account to the agriculture function, so we will not be
submitting proposed legislation on this matter.
Question. The prepared testimony indicates that the fiscal year
1998 budget request for the Public Law 480 program would provide for
approximately the same level of metric tons of commodity assistance as
currently estimated for fiscal year 1997. However, the budget
justification indicates that the program level for Title I would
decrease from 0.919 million metric tons grain equivalent (MMTGE) to
0.634 MMTGE in fiscal year 1998; the Title II program level would
remain the same at 2.4 MMTGE; and the Title III program would be
increased from 0.117 MMTGE to 0.150 MMTGE in fiscal year 1998. The
fiscal year 1998 request in fact proposes a net reduction from fiscal
year 1997 in Public Law 480 metric tons of commodity assistance and,
specifically, a reduction of 0.285 metric tons in Title I commodity
assistance from fiscal year 1997. Is this correct?
Answer. The table in the budget justification materials which
provides estimates of Public Law 480 tonnages does not reflect the
effect of the proposed rescission in Title I budget authority for
fiscal year 1997. The rescission would reduce the tonnage estimate for
fiscal year 1997 Title I programming by approximately 200,000 metric
tons. If the effect of the rescission is taken into account, total
Public Law 480 tonnage is estimated to be 3.2 million metric tons in
both FYs 1997 and 1998.
supplemental nutrition program for women, infants, and children (wic)
Mr. Secretary, the Administration is seeking $100 million in fiscal
year 1997 supplemental funding for the supplemental nutrition program
for women, infants, and children (WIC).
Question. I understand that food package costs and participation
have increased above projected levels. However, perhaps you could tell
us the impacts of not acting on this request. Would available funding
still be adequate to maintain the existing WIC caseload? In other
words, are we talking about throwing WIC participants off the rolls
without this additional funding, or are we talking about slowing the
growth of or not further expanding program participation?
Answer. Our rationale for requesting the supplemental really is
simple. We are committed to full funding WIC, serving about 7.5 million
eligibles by the end of fiscal year 1998. This goal would be
compromised by participation fall off forced by lack of funds.
Food and Consumer Service historical data shows that States usually
underspend their grants, due to correctly cautious management and to
the uncertainties of rebate cash flows, fluctuating demand for service
and unanticipated food cost changes. This has resulted in carry over
funds from one year to the next. While States will work harder than
ever to fully use their grants this year, and should reduce carry over,
program history suggests that carry over will be about 2.5 percent. If
there is no supplemental, States may not be able to sustain their
current caseload levels in fiscal year 1997.
managing wic within available funds
Question. What did the Department do at the outset of the fiscal
year to manage the WIC program within its available funding level so as
to prevent a large drop in participation at the end of the year?
Answer. The States handle the WIC program at the recipient service
level. USDA, through the Food and Consumer Service's seven Regional
Offices, provides oversight, policy guidance, and technical assistance
to WIC State Agencies. FCS does not allocate caseload to the States,
only funding. And we believe that this is as it should be.
When we advise States of their grant levels at the start of the
year, we provide them with a projection of the caseload we think they
can handle, given their prior year's food costs, expected rebate
revenue, and food inflation projections. We take a snapshot several
times during the year to see if any State has funds it will not need,
so that they can be recovered and reallocated to a State needs them. We
provided States extra warnings this year, that funding was likely to be
tight--and we are continuing with this process. Ultimately, however,
the States decide which and how many individuals they can serve within
their grants.
offsets for wic 1997 supplemental request
Question. As you are aware, if this supplemental funding is
provided, this subcommittee most likely would have to offset its cost,
both in budget authority and outlays, by reducing existing
appropriations for other USDA activities. The Administration has
proposed a $50 million rescission of Public Law 480 Title I funding,
but this would offset only half the budget authority and only about
one-third of the outlay impact of the requested WIC supplemental. Is
this WIC supplemental funding request a priority if further reductions
need to be made in existing funding for other USDA activities? If so,
what other offsetting reductions would you suggest?
Answer. The WIC supplemental is a priority of the Administration's
and has been accounted for in the President's plan to balance the
budget by the year 2002. This plan includes other high priority USDA
programs in addition to WIC. If the Administration's plan is adopted by
Congress, no further cuts to USDA will be required to offset the WIC
supplemental.
wic offsets for 1998
For fiscal year 1998, the administration proposes a $378 million
increase in WIC funding above the fiscal year 1997 level. I don't think
there is a member of the Congress who would not like to fully fund the
WIC program. However, I do not expect that this Subcommittee will
receive a discretionary spending allocating higher than the fiscal year
1997 level, requiring at least an offsetting reduction for any increase
provided.
Question. Is the proposed fiscal year 1998 WIC funding increase a
priority for the Department to the extent that you would suggest
offsetting reductions in funding for other USDA programs? What funding
reductions would you suggest?
Answer. WIC full funding is a priority of the Administration's.
Funding sufficient so that all eligibles may participate by the end of
fiscal year 1998, has been taken into consideration in preparing the
President's plan to balance the budget by the year 2002. If the
President's plan is followed, no further offsetting reductions to
Agriculture will be required.
office of the secretary
Question. The explanatory notes indicate that $207,000 in fiscal
year 1997 and $273,000 in fiscal year 1998 of the funds available for
the Office of the Secretary will be obligated under another USDA
appropriations for an Assistant to the Secretary for Western Affairs.
Under which USDA appropriation will these funds be obligated? Is this a
new position? Why was it created?
Answer. These funds will be obligated equally between the Forest
Service and Rural Business-Cooperative Services. This is a new position
established to represent the Secretary in natural resource and rural
economic development issues that cut across USDA and other Federal
agency lines. The position of Assistant to the Secretary for Western
Affairs was created to coordinate with other Federal agencies, local,
State and tribal governments issues of concern in the Western region.
service center implementation
Question. The explanatory notes indicate of the $7,500,000
appropriated in fiscal year 1998 for Infoshare and now designated for
Service Center Implementation, $3,098,302 was obligated in fiscal year
1996 and $4,401,698 will be obligated in fiscal year 1997. Please
provide a detailed breakdown, by fiscal year, on the purposes for which
these funds were obligated.
Answer. I will be glad to provide this information for the record.
[The information follows:]
[Dollars in Thousands]
------------------------------------------------------------------------
Fiscal Fiscal
Project year 1996 year 1997 Project
actual estimate totals
------------------------------------------------------------------------
Infoshare Program...................... $495 ......... $495
Kentucky Pilot......................... 438 ......... 438
Telecommunications..................... 500 ......... 500
Business Process Reengineering/Business
Process Improvement/Data Management... 831 $637 1,468
Change Management...................... 657 2,760 3,417
Service Center Implementation Project
Management............................ 62 319 381
1996/1997 Departmental Administration/
Office of the Chief Information
Officer Oversight..................... 115 285 400
Reserve for determination of future
oversight needs....................... ......... 401 401
--------------------------------
Total, Appropriation............. 3,098 4,402 7,500
------------------------------------------------------------------------
advisory committees
Question. For fiscal year 1997, the appropriations act establishes
a $1 million limitation on activities of advisory committees, panels,
commissions, and task forces, excluding panels to comply with
negotiated rulemaking or to evaluate competitively-awarded grants.
Please provide a listing of the advisory committees, panels,
commissions and task forces funded in fiscal year 1997, by agency, and
the amount of funds allocated for each.
Answer. I will provide for the record a listing of those advisory
committees, panels, commissions and task forces that are subject to the
$1 million limitation.
[The information follows:]
USDA Advisory Committees
Food, Nutrition and Consumer Services:e 1997 Estimate
National Advisory Council on Maternal, Infant and Fetal
Nutrition.........................................................
National Advisory Council on Commodity Distributio..................
--------------------------------------------------------------
____________________________________________________
Total.............................................................
==============================================================
____________________________________________________
Food Safety:
National Advisory Committee on Meat and Poultry Inspection $32,158
National Advisory Committee on Microbiological Criteria
for Foods............................................... 38,517
--------------------------------------------------------------
____________________________________________________
Total................................................... 70,675
==============================================================
____________________________________________________
Research, Education and Economics:
National Ag. Research, Extension, Education & Econ.
Advisory Board.......................................... 329,149
National Genetics Resources Advisory Council.............. 19,000
Dietary Guidelines Advisory Committee..................... 5,376
National Nutrition Monitoring Advisory Council............ 36,000
Forestry Research Advisory Council........................ 24,748
Census Advisory Committee on Agriculture Statistics....... 56,000
--------------------------------------------------------------
____________________________________________________
Total................................................... 470,273
==============================================================
____________________________________________________
Marketing and Regulatory Programs:
Federal Grain Inspection Advisory Committee............... 30,000
Advisory Committee on Foreign Animal and Poultry Diseases. 20,350
General Conference Committee of the Nat'l Poultry
Improvement Plan........................................ 7,969
National Animal Damage Control Advisory Committee......... 25,000
National Organic Standards Board.......................... 43,000
--------------------------------------------------------------
____________________________________________________
Total................................................... 126,319
==============================================================
____________________________________________________
Farm and Foreign Agricultural Services:
Agricultural Policy Advisory Committee for Trade.......... 14,119
Ag. Tech. Adv. Comm. for Trade in: Animals & Animal
Products................................................ 14,110
Fruits and Vegetables..................................... 14,110
Grain, Feed & Oilseeds.................................... 14,110
Sweeteners................................................ 14,110
Tobacco, Cotton & Peanuts................................. 14,110
Edward R. Madigan Ag. Export Excellence Award............. 14,110
Board..................................................... 28,090
Beginning Farmers and Ranchers......................................
--------------------------------------------------------------
____________________________________________________
Total................................................... 126,869
==============================================================
____________________________________________________
Natural Resources & Environment:
Task Force on Agricultural Air Quality.................... 50,000
--------------------------------------------------------------
____________________________________________________
Total................................................... 50,000
Subtotal, Advisory Committees........................... 844,136
Contingencies................................................. 155,864
--------------------------------------------------------------
____________________________________________________
Total, Advisory Committees Limitation................... 1,000,000
Question. Why is the Department proposing to eliminate this
limitation in fiscal year 1998?
Answer. We have proposed this change in order to provide the
agencies with the flexibility needed, within available resources, to
carry out the appropriate level of committee activities in support of
USDA programs.
advisory committees
Question. Please provide a list of the advisory committees, panels,
commissions, and task forces, by agency, included in the fiscal year
1998 budget request, and the amount of funds proposed for each one.
[The information follows:]
Agency/group 1998 estimate
ARS--National Genetic Resources Advisory Council.............. $23,000
ARS--National Nutrition Monitoring Advisory Council........... 37,000
ARS--Dietary Guidelines Advisory Committee.................... 159,140
CSREES--National Agricultural Research, Education, Extension,
and Economics Advisory Board.............................. 329,149
CSREES--Forestry Research Advisory Council.................... 25,396
APHIS--Foreign Animal and Poultry Diseases Advisory Committee. 20,913
APHIS--General Counsel of the National Poultry Improvement
Plan...................................................... 9,928
APHIS--National Animal Damage Control Advisory Committee...... 25,000
AMS--National Organic Standards Board......................... 44,000
GIPSA--Federal Grain Inspection Service Advisory Committee.... 30,000
NASS--Census Committee on Agriculture Statistics.............. 58,000
FAS--Agricultural Policy Advisory Committee for Trade......... 14,119
FAS--Ag Tech. Advisory Committee for Tradein Animal & Animal
Products.................................................. 14,110
FAS--Ag Tech. Advisory Committee for Tradein Fruits and
Vegetables................................................ 14,110
FAS--Ag Tech. Advisory Committee for Tradein Grain Feed and
Oilseeds.................................................. 14,110
FAS--Ag Tech. Advisory Committee for Trade in Sweeteners...... 14,110
FAS--Ag Tech. Advisory Committee for Trade in Tobacco, Cotton
and Peanuts............................................... 14,110
FAS--Edward R. Madigan Ag. ExportExcellence Award Board....... 14,110
FSIS--National Advisory Committee on Microbiological Criteria
for Foods................................................. 75,000
FSIS--National Advisory Committee on Meatand Poultry
Inspection................................................ 75,000
NRCS--Task Force on Agricultural Air Quality.................. 80,000
FSA--Advisory Committee on Beginning Farmers and Ranchers..... 35,393
hazardous waste management
Question. The fiscal year 1998 request proposes an increase of $9.3
million for hazardous waste management to meet mandated compliance
deadlines for high risk sites. How many sites on USDA properties
require hazardous waste cleanup, and what is your estimate of the
amount of funds needed to complete all work identified?
Answer. The USDA currently estimates that over 4,500 sites under
our jurisdiction, custody, or control will require a response action.
The current estimate to complete this work is approximately, $3.6
billion. This includes 1,728 abandoned or inactive mines at a cost of
$1.9 billion and up to 1,000 sites leased by the Commodity Credit
Corporation at an estimated cost of $1.5 billion. The Department has
begun an initiative to increase the number of site cleanups by
potentially responsible parties in order to accelerate the pace and
share the financial responsibility for cleanup.
national finance center
Question. The fiscal year 1997 appropriations act requires the
Chief Financial Officer to actively market cross-servicing activities
of the National Finance Center--NFC. Is this being done?
Answer. NFC is pursuing many avenues to actively market its full
range of services to non-USDA agencies including actively participating
in national conferences and symposiums to market NFC services
Nationwide. In addition, publicizing NFC successes through established
media and NFC publications is important to maintain the NFC's image as
a leader in providing financial services.
In 1996, NFC began servicing the Federal Mediation and Conciliation
Service and the Office of Congressional Compliance. We are scheduled to
bring another four agencies into the National Finance Center over the
next two years: the U.S. Capitol Police, the U.S. Architectural and
Transportation Barriers Compliance Board, the Federal Housing Finance
Board, and the Federal Elections Commission. NFC is also currently
pursuing several other potential clients for our payroll systems as
well as other administrative payment systems.
In addition, NFC is pursuing a number of marketing strategies to
make our services more visible and appealing to potential users. For
example, NFC held an NFC Payroll/Personnel EXPO here in Washington last
October and participated in an information processing interagency
conference in Austin, Texas, in December. NFC is scheduled to
participate in at least four more conferences this fiscal year,
allowing it to market the full range of NFC services to conference
participants. NFC will also be initiating use of the Internet for
marketing of services.
office of the inspector general: asset sharing
Question. What amount has been deposited in the Department of
Justice and/or Treasury Department Assets Forfeiture Fund in each of
fiscal years 1996 and 1997 as a result of investigations in which the
USDA Office of Inspector General (OIG) participates?
Answer. Cumulatively, over $10 million has been identified for
possible forfeiture to the Government as a result of our investigative
actions since OIG was provided authority to receive proceeds from
forfeitures in November 1995. In fiscal year 1996, property and/or
funds valued at approximately $7 million have been provided to the U.S.
Department of Treasury's Assets Forfeiture Fund, and property and/or
funds valued at approximately $712,000 have been provided to the U.S.
Department of Justice's Assets Forfeiture Fund as a result of
investigations involving this agency. To date in fiscal year 1997,
property and/or funds valued at approximately $160,000 have been
provided to the Treasury Asset Forfeiture Fund, and property and/or
funds valued at approximately $2.4 million have been provided to the
Justice Assets Forfeiture Fund.
Question. Is a memorandum of understanding between the OIG and the
U.S. Department of Justice and/or U.S. Department of Treasury in place
to allow USDA to receive an equitable share of these funds? If not,
why?
Answer. Previously, a memorandum of understanding between OIG and
the Department of Treasury was agreed to and signed by both agencies;
however, Treasury has since withdrawn its agreement. No memorandum of
understanding has been completed between OIG and the Department of
Justice. Currently, OIG is involved in discussions with Justice,
Treasury, and the Office of Management and Budget on OIG's receipt of
forfeiture proceeds through equitable sharing. These discussions
continue. Justice objects to equitable sharing with any Federal agency,
including OIG.
______
Questions Submitted by Senator Bond
wic sugar limit
The USDA raised the possibility that it might alter the sugar cap
for breakfast cereals approved for the WIC program many months ago and
in response it received an avalanche of negative comments from parents,
teachers, health professionals, public service and child care groups.
The essential facts noted by the commentators is that the WIC diet is
supplementary diet designed to be nutrient dense. For this reason it
specifically limited the amount of sugar, fats and sodium. There seems
to be no rational reason for adding empty sugar calories to a
prescriptive diet designed for undernourished children.
Question. Can we expect that the retention of the sugar cap will be
proclaimed by the Department in the near future?
Answer. As you noted, WIC foods are intended to provide nutrients
lacking in the WIC population. And WIC foods are also a nutrition
education tool used to help recipients learn how to select nutritional
foods. We periodically consider recent research findings and advice
from leading professional health and nutrition authorities to determine
whether revisions in Federal program guidelines orregulations are
needed.
The March 1996 WIC Cereal Sugar Limit Notice stated that USDA was
aware that the newer clinical evidence indicated that sugar consumption
is not believed to be an independent risk factor in the development of
the chronic diseases of coronary heart disease, noninsulin diabetes,
obesity and hyperactivity. We used the public forum of a Federal
Register Notice to solicit feedback from the broad sectors of the
community on whether continuation of a Federal restriction on the
amount of sugar allowed in adult WIC cereal is still warranted. Among
the many comments we received were suggestions that neither sugar nor
any other attribute of WIC foods should be viewed in isolation, but
rather they should be reviewed in the context of all of the WIC foods
and their use in achieving WIC goals.
In follow-up, the Department will publish a notice in the Federal
Register to summarize the public comments USDA received on the March
1996 Notice and to announce the Department's decision to examine WIC
foods for consistency with the 1995 Dietary Guidelines for Americans
and supporting scientific knowledge. USDA's Food and Consumer Service,
in conjunction with the Center for Nutrition Policy and Promotion, will
be conducting a scientific review of the WIC foods. Until this review
is completed, the Department will not be making any changes in the
current Federal sugar cap for WIC cereals.
american dental association on wic sugar limit
The American Dental Association is, as you know unconditionally
opposed to an upward alteration in the sugar cap. The principal
argument for such a revision seems to be that while additional sugar
would do no good, it would also do no harm. This would be a strikingly
weak argument even if it were true but it clearly is not. Added sugar
would mean increased tooth decay among a group of children who already
have a higher incidence of caries than the general juvenile population
does.
Question. Has the position of the American Dental Association in
this matter been given the full consideration it obviously deserves?
Answer. Yes. We have reviewed the materials provided by the
American Dental Association in looking at the WIC sugar limits. Also,
we welcome the American Dental Association's interest in WIC and in WIC
foods, and encourage them to help us with our planned review of all WIC
foods, including the sugar limits. Further, we hope the American Dental
Association will help with our other programs in any way that they can.
national corn genome initiative
On December 18, Senator Mosley-Braun and I sent a letter to you
regarding the status of USDA's efforts to provide funding for the
National Corn Genome Initiative (NCGI) which is he critical research
priority by corn growers and processors. As we said in the letter, we
believe that this project is of vital interest to our efforts to retain
our leadership position in agricultural research and to ensure that our
producers have the tools necessary for environmentally-responsible and
sustainable agricultural production.
We had hoped that the research components of the Fund for Rural
America might be recognized as a part of the Fund for Rural America. It
was specifically mentioned in Farm Bill report language and is
precisely the kind of basic science that will be the basis for us being
competitive into the next century or falling behind. While I understand
that many rural development projects yield immediate and visible
benefits and are important, we should also have the vision to provide
the tools that will be the key to success in the future.
The letter also notes that the fiscal year 1997 funding bill for
the USDA included language urging that the Department provide increased
attention and develop a long-term approach for corn genome mapping.
Question. We have not received a response to the December 18
letter. While I understand the Department has been active during the
period since, I have several questions regarding the Corn Genome
Mapping project. Does the Department consider the NCGI eligible for
Fund for Rural America grants?
Answer. A broad-reaching proposal to map the corn genome could be
submitted to the Fund for Rural America--FRA. Given that the FRA is
designed to support multifunctional and multidisciplinary projects that
combine research, education, and extension to some degree, the proposal
should be one that also looks at the impact of the mapping project on
the community, on breeders, and/or on producers. It might be beneficial
to include technology transfer to indicate how the generated
information will be disseminated and used.
Question. If so, will the Department give such an endeavor priority
under the criterium that has been issued?
Answer. The FRA is a peer-reviewed competitive grants program. Many
high quality proposals are expected to be submitted. All proposals will
be reviewed competitively for quality, merit, and relevance. A proposal
on corn genome mapping will compete under the same procedures through
the peer review process.
Question. Are there funding limits (ceilings) on research projects
funded by the Fund for Rural America? If so, what are they?
Answer. The Fund for Rural America includes several funding limits.
The limit on planning grants for up to six months is $25,000. Standard
grants can be funded at up to $600,000 for the life of a project;
projects can extend for up to four years but cannot exceed the $600,000
cap on total funding regardless of length of time. Center projects can
be funded at up to $1.0 million per year for up to four years. This
puts the cap on total funding for a four-year center grant at up to
$4.0 million.
Question. What efforts are currently underway at the Department to
fundgenome mapping projects?
Answer. The major effort currently underway in the Department to
fund genome mapping projects is the Plant Genome Program supported
through the Cooperative State Research, Education, and Extension
Services's--CSREES--National Research Initiative Competitive Grants
Program--NRICGP--along with database development supported by the
Agricultural Research Service--ARS. Other sources of fundinginclude
Special Research Grants, Hatch Act formula funds, and the NRICGP Animal
Genetics Program under CSREES.
Question. Does the fiscal year 1998 request include funding for
NCGI?
Answer. The fiscal year 1998 request does not include specific
funding for NCGI. However, a portion of the increases requested for the
CSREES NRICGP will be directed towards the priority area of plant
genetic enhancement.
Question. If not, is the Department taking steps towards developing
a long-term approach for funding this project?
Answer. ARS and CSREES are in the process of establishing an
interagency corn genome mapping team to lay the groundwork for fiscal
year 1999 and to develop strategies for corn genome mapping work.
______
Question Submitted by Senator McConnell
wic sugar limit
It strikes me, Mr. Secretary, that an upward revision of the sugar
cap on WIC cereals might set a precedent that could effect a wide
variety of government actions and programs. The purpose of the WIC
program has from the beginning been clearly and narrowly defined. It is
to provide a defined service--a nutrient dense diet--to a defined
group--women, infants and children who without a special supplementary
diet would be poorly nourished and would inevitably suffer the serious
physical and mental consequences of under nourishment.
This is a program which meets its goal in a most impressive way and
it is clearly not a program that should be tinkered with.
Question. Would you agree with this observation? And if you would,
would you also agree a lowering of WIC's very high standards for foods
in the program would establish an unfortunate precedent that could be
applied to dilute the original purpose of other precisely targeted
programs?
Answer. Yes. I would agree with your observation. WIC foods are
intended to provide nutrients lacking in the WIC population. Also, WIC
foods are a nutrition education tool, used to help recipients learn how
to select nutritional foods. We periodically consider recent research
findings and advice from leading professional health and nutrition
authorities to determine whether revisions in Federal program
guidelines or regulations are needed.
The March 1996 WIC Cereal Sugar Limit Notice stated that USDA was
aware that the newer clinical evidence indicated that sugar consumption
is not believed to be an independent risk factor in the development of
the chronic diseases of coronary heart disease, noninsulin diabetes,
obesity and hyperactivity. We used the public forum of a Federal
Register Notice to solicit feedback from the broad sectors of the
community on whether continuation of a Federal restriction on the
amount of sugar allowed in adult WIC cereal is still warranted. Among
the many comments we received were suggestions that neither sugar nor
any other attribute of WIC foods should be viewed in isolation, but
rather they should be reviewed in the context of all of the WIC foods
and their use in achieving WIC goals.
In follow-up, the Department will publish a notice in the Federal
Register to summarize the public comments USDA received on the March
1996 Notice and to announce the Department's decision to examine WIC
foods for consistency with the 1995 Dietary Guidelines for Americans
and supporting scientific knowledge. USDA's Food and Consumer Service,
in conjunction with the Center for Nutrition Policy and Promotion, will
be conducting a scientific review of the WIC foods. Until this review
is completed, the Department will not be making any changes in the
current Federal sugar cap for WIC cereals.
______
Questions Submitted by Senator Burns
bison management
Question. Mr. Secretary, I have always had great respect for the
Animal Plant Health Inspection Service and the work that they have done
to provide a healthy standards for American agriculture. I have never
had a problem working with the restrictions that they have imposed in
order to re-enter this country after visiting foreign countries. Today
though this faith is waning. Can you explain to me the value of the
guarantees that APHIS has provided the State of Montana?
Answer. One of APHIS' top priorities is to ensure the integrity of
the Cooperative State-Federal Brucellosis Eradication Program and to
protect the brucellosis-free status of the States surrounding
Yellowstone National Park. These goals are critical to our efforts to
encourage and support the domestic and international trade of beef
cattle.
APHIS, along with the National Park Service (NPS), proposed a plan
to stop bison from migrating outside of Yellowstone. This proposal
suggests expanding the bison range into the adjacent Gallatin National
Forest. The NPS will deploy 24-hour patrols to keep bison migrating
from Yellowstone to a minimum and contain those animals that stray to a
section of the Gallatin National Forest.
Question. I ask this Mr. Secretary, because in the past States have
either placed or threatened to place restrictions on the shipment of
Montana beef cattle into their States. Yet APHIS continued to guarantee
the brucellosis free status of Montana. Can you explain the value of
your determination to continue the brucellosis free status for Montana?
Answer. Maintaining Montana brucellosis free enables Montana
ranchers, as well as other border States, to continue shipping cattle
into other markets. The threat of the spread of brucellosis can cause
havoc to the state's livestock economy.
Question. In more than a dozen years of discussion among all the
parties involved, and more recently the discussions between your office
and Secretary Babbitt. Would you provide me with a breakdown on the
movement that has occurred, if any?
Answer. APHIS, in cooperation with the Department of Interior's
(DOI) NPS and the State of Montana, has recently agreed to an interim
management plan in Yellowstone. The plan includes provisions for the
capture, testing, slaughter, and removal of diseased bison that migrate
outside certain areas in or adjacent to the Park. Federal and State
agencies are also using additional coordinated nonlethal means to
manage the bison and maintain the viability of the Yellowstone herd.
Additionally, APHIS is working with DOI and State officials to develop
long-term solutions that would eliminate brucellosis from the Park's
herd and manage its population within the confines of available
rangeland.
Question. Mr. Secretary, it is my understanding that you have
finally taken a role in this discussions on this issue. With this in
mind I would like to know why it took so long for you to come to the
table on this matter?
Answer. As you know, this has been a very critical and sensitive
issue. I have been engaged in the ongoing discussions regarding the
management of bison at Yellowstone. I would like to take this
opportunity to reassure you that I am committed to making progress
towards a long-term solution for bison management that is acceptable to
all parties involved in this process.
appropriate funding mechanisms
Question. Mr. Secretary can you provide the committee with your
position on the issue of funding of grants from he federal government?
Do you in your position believe more in competitive grants or do you
have faith and a commitment to the formula form of providing funding
for agriculture research?
Answer. Federal grant programs provide the most effective mechanism
for eliciting and supporting meritorious science being conducted by the
land-grant universities, public and private universities, Federal
laboratories, and other research institutions and individuals across
the country. Federal dollars often support highly innovative research
which requires an investment in time and money to which private
industry often cannot commit.
However, Federal formula funding is also necessary to have a
balanced funding portfolio. Formula funding for the land-grant
universities continues to provide stable support for core university
staff, operations, and equipment. Formula funding is also used to
support on-going research projects which provide the information
required to respond to critical issues currently faced by the
agricultural community.
federal support for agricultural research
Question. Mr. Secretary, could you provide me and this committee
with any and all information you have of organizations outside the
Federal government that are in a true position to pick up the role of
USDA in agricultural research? I would like to find out where you
expect the slack to be picked up and how you can justify the funding
you have established at this time?
Answer. The USDA budget for agricultural research in fiscal year
1998 is $1.8 billion, and represents a continuing strong commitment to
that activity. Our role is to address research issues that are national
and regional in scope, and long term and high risk in nature. Within
the constraints of our budget and in order to ensure that we provide
the resources necessary to work on those programs and new issues of
highest priority in the broad national interest, we have proposed
termination of some projects and activities judged to be less critical
at this time. USDA has not specifically suggested that the terminated
research be picked up by other organizations outside the Federal
government.
However, other organizations also conduct research relevant to
agriculture. Land-grant institutions, for example, are well noted for
their research capabilities. Some industry or other private
organizations are also involved in agricultural research. However, they
tend to focus on projects that solve a specific industry problem or
where there is financial profit. We recognize that both state and
private institutions, like the Federal government, are experiencing
financial constraints, which limits their level of research.
To the extent a particular problem or research activity is truly
essential to a state, local or private sector group, they need to go
through the same difficult priority setting process, as USDA has done,
to decide on how best to allocate their available resources. All
Federal agencies, universities and private industry need to work
together in partnership to assure a well-balanced agricultural research
agenda that collectively serves national, regional, state and local
agricultural interests.
justify redirection of research dollars
Question. Mr. Secretary, I know you are aware of the many threats,
including karnal bunt, foreign competition, that face our producers in
the world market. Can you explain to me how you can justify the
redirection of research dollars at a time when our yields on crops are
dropping and when we face the problems of outside pressure on our
crops.
Answer. Federal resources are being curtailed government-wide in an
effort to reduce the deficit and help balance the Federal Budget. The
Administration and the Congress are examining all programs in order to
generate savings that will enable a leaner, more responsive Federal
government that will provide for the most essential services to promote
the Nation's economy, sustain the environment and improve the lives of
all Americans.
The ongoing ARS research programs that have been identified for
termination have been deemed less critical for ARS to continue in light
of higher priority research needs and important agricultural problems.
The savings achieved will be redirected to finance higher priority
agricultural research initiatives recommended by the Secretary and the
Administration in accordance with the President's budget.
Finally, we believe the trend in total factor productivity--a broad
measure of output per unit of purchased inputs, labor, and capital
rather than just yields per acre, is more appropriate indicator of the
return on investments in agricultural research. The trend in factor
productivity is encouraging. In the period 1948-1993, the productivity
increased at an annual rate of 1.8 percent.
disaster assistance
Question. Mr. Secretary, I understand that you have the authority
to establish an emergency committee made up of leaders of the various
agencies in the States. Mr. Secretary, can you explain why these
committees don't seem to be functioning in the many States in the west
that are suffering through very difficult conditions this winter?
Answer. A USDA State Emergency Board (SEB) is established in each
State and in the Caribbean Area. The boards constitute the organization
responsible for carrying out USDA's national security and emergency
functions. The boards consist of representatives from the following:
Farm Service Agency, Animal and Plant Health Inspection Service, Food
and Consumer Service, Forest Service, Food Safety and Inspection
Service, Natural Resources Conservation Service, National Agricultural
Statistics Service, and Rural Utilities Service. The SEB's are
functioning and meet on a regularly scheduled basis and when needed.
For example, SEB's in Montana, North Dakota, and South Dakota have
reviewed or will review the Damage Assessment Reports required for
those States' Secretarial Designation requests.
Question. I cannot understand how people sitting in Washington can
look at news reports and think that the only disaster in the mid-west
this year occurred in North and South Dakota. Mr. Secretary, storms do
not understand State lines. Can you explain the process for declaring
feed assistance disaster for the States?
Answer. Requests for FSA implementation of feed assistance programs
originate from county committees which are composed of producers and
ranchers in the local communities. However, the Federal Agriculture
Improvement and Reform Act of 1996 (the 1996 Act) suspended, through
the year 2002, several provisions of the Agricultural Act of 1949,
including all Livestock Feed Programs and the Indian Acute Distress
Donation Program. With the exception of 210 counties in four States
that were authorized to provide assistance before the suspension, most
livestock producers were left without any viable emergency feed
assistance programs for the 1996 crop year.
USDA implemented the Disaster Reserve Assistance Program (DRAP) for
the 1996 crop year only on the basis of an FR Notice published on
October 29, 1996. Funding for the program was provided by sales of
disaster reserve stocks. The Disaster Reserve was authorized under the
1970 Act, Section 813(c). A concurrent resolution of Congress in 1996
provided authority for the Secretary to use these stocks. DRAP has been
authorized in 463 counties in 20 States, and has eligibility criteria
similar to the former LFP; however, DRAP provides a 30 percent cost
share rather than 50 percent. No authority currently exists beyond the
1996 crop year for this program. Proposals are being developed to
utilize the provisions under the Agricultural Act of 1970 to operate
emergency programs for 1997 and future years; however, funds are
limited.
In response to severe winter weather in the Plains, USDA developed
and delivered the Emergency Feed Grain Donation Program (EFGDP) in
North and South Dakota, and the Foundation Livestock Relief Program
(FLRP) was implemented in North and South Dakota, portions of
Minnesota, and in several contiguous counties in adjacent States.
Authority for the program was an Interim Rule, effective January 10,
1997, which amended 7 CFR Section 1439.402(a) to read: ``(a) Assistance
is for eligible livestock that are commingled, stranded, and
unidentified as to the livestock owner. . . . Such losses must occur
during the 1996 crop year because of snow or freezing conditions where
a emergency declaration has been made by the President and while
emergency snow conditions exist as determined by DAFP.''
According to this Interim Rule, the President must have made an
emergency declaration for a State or county as a condition of
eligibility for initiating this program. The entire States of South
Dakota, North Dakota, and certain counties in Minnesota were declared
disaster areas by President Clinton. The FSA Deputy Administrator for
Farm Programs (DAFP) determined that all counties in North and South
Dakota met all eligibility requirements for EFGDP, and that all
counties in North and South Dakota, counties contiguous to North and
South Dakota, and counties in Minnesota for which a Presidential
disaster declaration was made, were eligible for assistance under FLRP.
As indicated above, although EFGDP benefits were limited to North
and South Dakota, FLRP benefits were available in North and South
Dakota, and certain counties in Minnesota, Iowa, Nebraska, Wyoming, and
Montana.
Question. In Montana this winter we have seen people feeding in
October who are not usually scheduled to feed until late spring. We
have cattle starving because of the conditions of the range. They
cannot get to the sod and find the forage necessary to continue. Yet it
took until January for the department to address this situation. Then
it took another two weeks to get the information into the hands of
those people who need the help. Could you explain this?
Answer. As indicated in an answer to another question, the 1996 Act
suspended all emergency livestock feed programs beginning with the 1996
crop year through the year 2002. Emergency livestock feed assistance
was implemented for the 1996 crop year on an ad hoc basis on the basis
of an FR Notice published on October 29, 1996. Funding for the programs
was provided by sales of disaster reserve stocks. The Disaster Reserve
was authorized under the 1970 Act, Section 813(c). A Presidential
designation in 1996 provided authority for the Secretary to use these
stocks.
Although much of the fall grazing acreages in the Northern Plains
were covered by snow in November, emergency conditions did not ensue
until severe storms and extended sub-zero temperature conditions
occurred, beginning in January. At that time, assistance was requested
from USDA, and Secretary Glickman responded by initiating the EFGDP and
FLRP programs, effective as early as January 10, 1997.
packer concentration
Question. Mr. Secretary, what are the Department's plans for
continued investigation into what is happening in regards to packer
concentration?
Answer. I established a task force in the Department co-chaired by
the Assistant Secretary for Marketing and Regulatory Programs and the
Chief Economist. The Department has already (1) broadened the coverage
of market reports to include the volume of slaughter cattle contracted
for sale, (2) expanded reporting of livestock and poultry markets to
include value-based pricing indicators (ie., premiums and discounts)
and,(3) sought comments on the petition for rulemaking from the Western
Organization of Resource Councils (WORC) requesting USDA to restrict
certain livestock procurement practices. We are also seeking comments
regarding regulations to address contract poultry grower issues.
conservation reserve program
Question. I would appreciate you explaining to me the process of
the determination of lands that will be eligible for admittance into
the Conservation Reserve Program. I would also be very interested in
the process that was used in the rule making procedure. I am greatly
concerned that the way the rules were written that you provided no
opportunity for Congressional review. We have numerous inquiries in our
offices as to what happened and why it happened in the way it did.
My question is, how can you justify making almost half of the crop
land in America eligible for the enrollment in the program, when the
acreage for inclusion in the program is capped at 36.4 million acres?
Answer. The focus of CRP involves three major objectives, including
reducing soil erosion, improving water quality, and enhancing wildlife
habitat. Our determination to include a larger pool of eligible acreage
ensures that acreage with the greatest environmental benefits,
considering all program objectives based on the environmental benefits
index, will be selected. It was also decided that all land classified
as Highly Erodible Land should be eligible to be offered for CRP since
those lands are subject to conservation compliance provisions.
Also, because no more than 25 percent of the cropland in a county
can be enrolled in the program at on time, a significant amount of
otherwise eligible land could not effectively compete for enrollment.
Once a county has reached the 25 percent limit, enrollment generally
ceases, even for lands that my be eligible and rank higher based on EBI
scores than other accepted lands in another county that has not reached
the 25 percent limit. Thus, of the 230 million to 240 million acres,
about 55 to 60 percent of the 420 million acres of U.S. cropland in
1992 (including cultivated and non-cultivated cropland and CRP lands),
that are eligible based on environmental and cropping history criteria
only about 100 million acres (less than 25 percent of U.S. cropland)
could ever really have a chance to be enrolled.
After the proposed rule was published in September 1996, 3,467
comments were received which were reviewed by National, State, and
local FSA employees to categorize by subject. An interagency team
composed of several USDA agencies, United States Fish and Wildlife
Service and the Environmental Protection Agency developed issues which
were reviewed by NRCS and FSA field employees and a final rule was
published in February 1997. USDA is committed to moving forward with
the signup and notifying producers as soon as possible.
role of the secretary of agriculture
Question. In my statement, I mentioned the problems my staff faced
in scheduling a meeting with you. On numerous occasions they called
your office over a two week period of time. On one occasion they were
told that you were on travel and that they would get back to us to
schedule a meeting. Mr. Secretary, we never heard from them. I wonder
if this is commonplace in the department and if you can assure me that
this type of action was an oversight or what exactly occurred here.
Answer. I regret that there was a misunderstanding regarding our
efforts to schedule a meeting with you and other members of the Montana
congressional delegation on February 27. Coordinating the schedules of
one Congressman, two Senators and two Cabinet Secretaries is never an
easy task, but I am happy that ultimately we were able to arrange a
meeting to discuss the bison issue. I am sorry that your staff was
apparently no contacted directly with respect to the scheduling of this
meeting. However, I am told by our scheduling office that it is easier
to coordinate delegation-wide meetings when one congressional office
serves as the principle point of contact for the scheduling of such
meetings. In most cases, this minimizes confusion and
misunderstandings. I regret that this was not the case in this
instance.
Question. Could you provide me a brief summary of what plans are in
the coming year to get out in the country and talk about the
agriculture producers in our country?
Answer. Throughout my 18 years in the United States Congress and
during the two years as Secretary of Agriculture, I have traveled to 37
states visiting both rural and urban communities impacted by USDA
programs and services. The members of my subcabinet and I are tireless
advocates for all Americans living in rural communities and
agricultural producers, especially family farmers. Last year alone 1
million Americans moved back into rural communities, and rural
incomes--both on and off the farm--are steadily climbing. I have
traveled from Indiana where I met with producers to discuss corn and
row crop issues to the central valley of California where farmers and I
talked about vegetable harvesting and international trade. I have flown
around North Carolina to view hurricane damage and flown to Indonesia
to increase U.S. agricultural markets abroad. Everyday, my subcabinet
and I work to ensure that the United States is the number one
agriculture producer in the world.
At USDA, we are changing the way government does business by
increasing opportunities for all stakeholders--consumers, producers,
and industry--to have a voice in policy development. After attending
countless listening sessions on issues such as concentration, food
safety, dairy pricing, and civil rights--we have taken decisive action
to make things better. My plans for the coming year are to take every
opportunity I get to listen to agricultural producers and rural
Americans and serve as their advocate at home and abroad.
Question. What do you see as your role for being the primary
spokesman for agriculture in America? I would hope that you will be
more involved than I have witnessed in the past.
Answer. Most Americans do not realize how much they are touched
each day by the programs and services of the United States Department
of Agriculture. As an 18 year Congressman and now as Secretary of
Agriculture, my job has always been to educate Americans that from the
food we eat, to the clothes we wear, to the soil we farm and the
streams we fish, USDA programs affect the quality of life all Americans
enjoy. USDA programs impact the American landscape from our National
Forests to the great plains, soil conservation, agriculture research,
and food and nutrition programs--they are all a part of USDA.
Although the recent Farm Bill significantly reduced the
Department's role in production agriculture, there is still much the
Department is doing to ensure the continued economic prosperity of the
U.S. agricultural sector. We are working to expand trade opportunities,
promote a fair and competitive marketplace at home and abroad, and
improve the safety net for farmers. Also, the research the Department
conducts helps farmers to be more productive, more environmentally
conscious, and more profitable, all at the same time. American
agriculture has seen a lot of change and progress, and the future holds
even more. As the primary spokesman for agriculture, I want to help
farmers and ranchers take advantage of the tremendous opportunities
this new era in agriculture offers.
farm service administration
Question. It is my understanding that the Administration looks to
reduce the staffing of the field offices in the states. That there is a
movement afoot to make the employees of the county offices federal
employees. Could you explain the entire process by which you are
looking to reduce the Farm Service Administration at the state and
county level?
Answer. The fiscal year 1998 President's budget anticipates
reducing the Farm Service Agency's employment by approximately 2,100
staff years from fiscal year 1997 estimated levels. This reduction,
primarily in the field, reflects the reduced workload associated with
the programmatic impacts of the 1996 Farm Bill and anticipated closing
of another 500 USDA field service centers by 1999. We are uncertain at
this time of where the employee reductions and office closures will
take place because agency and USDA plans have not been finalized. We
anticipate spending much of fiscal year 1997 analyzing our delivery
systems for additional opportunities to achieve greater efficiencies in
the Farm Service Agency and other agencies located in the field. FSA
and other program delivery agencies face a different future today than
they did one year ago. The 1996 Farm Bill significantly changed FSA
workload requirements and further study is needed. To assure that USDA
provides the best service possible to our customers, any decisions to
close USDA field offices or reduce an agency presence in a USDA service
center must be done in coordination with other agencies located at the
site, including Rural Development and Natural Resources and
Conservation Service. No additional office closures will take place
until the situation has been thoroughly studied and USDA plans have
been shared with Congress and USDA's customers.
Question. What is the plan to make county directors and staff
Federal employees?
Answer. While the Federal Crop Insurance Reform and Department of
Agriculture Reorganization Act of 1994 provides that Federal and non-
Federal employees could be used interchangeably in local USDA offices
in the implementation of programs and activities assigned to the FSA,
operating a dual employee delivery system at the county level has been
difficult. Recently, the USDA Civil Rights Action Team (CRAT)
recommended that the FSA county committee system be modernized by
converting all county non-Federal employees to Federal status. This
will require legislation.
Question. Would you not agree that this will move the focus from
local control to a more centralized Federal control system?
Answer. Converting non-Federal county employees to Federal status
would remove local county committee control from employment decisions
in FSA county offices. However, this change would not significantly
lessen or eliminate the county committee program delivery system
because county committees would retain most of their responsibilities
for programs and other functions delegated to them by the Secretary of
Agriculture and the FSA Administrator.
I support the effort to convert non-Federal county employees to
Federal status for the following reasons: 1) FSA Federal and non-
Federal county employees are working side-by-side, and as farm credit
functions continue to be integrated, are, in many cases, doing the same
work. 2) having all FSA county employees under one Federal personnel
system makes it easier for FSA to supervise and deliver programs in the
field; treat all county employees fairly, consistently, and equitably;
and extend Career Transition Assistance Program benefits to all county
employees who are involuntarily separated. 3) as pointed out by the
CRAT report, converting non-Federal employees to Federal status makes
all county employees accountable to Federal regulations and minimizes
the effect of farmer elected county committees on employment decisions.
Question. Can you describe the process that will be used to reduce
the state office numbers?
Answer. No agency or USDA plans for reducing employees or number of
offices have been finalized. The fiscal year 1998 President's budget
proposes a reduction of 2,119 staff years, of which 269 are federal
staff years and 1,850 are non-Federal staff years. These staffing
reductions reflect the programmatic impact of the 1996 Farm Bill, and
imply a reduction of about 500 local offices providing service
delivery. In order for FSA to meet the changing mission of the agency,
FSA is in the process of preparing strategic plans to address these
issues and determine program delivery changes which will provide an
optimum organizational structure to reduce costs and streamline the
delivery of services. However, no plans have been approved at this
time. Once plans are finalized, FSA intends to offer buyouts in an
effort to minimize involuntary separations. However, it is unlikely
that all reductions can be achieved through buyouts. After we have
offered a voluntary buyout, then FSA will use RIF's to meet reduction
targets. Federal RIF procedures (using tenure, veterans' preference,
performance, and length of service) will be used to determine which
Federal employees will be RIFed. Internal FSA RIF procedures
(identifying the employees who are best qualified to perform work) will
be used to determine which non-Federal employees will be RIFed. If non-
Federal employees are converted to Federal civil service status, they
will be subject to Federal RIF procedures after the conversion.
grain inspection, packers and stockyards administration
Question. Mr. Secretary, you have been blessed by having a very
competent person in the leadership position at GIPSA. Can you explain
to me how it is that you expect these people to address the continuing
concerns of the agriculture producers in our country, without providing
them with the funds to do any such investigation and prosecution?
Answer. An additional $2.8 million is included in the fiscal year
1998 Budget request for GIPSA to increase their capability to monitor
and analyze packer market competition, study the implications of
structural change and behavioral practices in the meat packing
industry, address poultry compliances issues, and enable the electronic
submission of industry data. These additional resources will enable an
increased capability to support legal actions that require complex
economic and statistical analyses.
wic sugar limit
Question. I wrote to you in June 1996 regarding USDA's Notice of
Intent to Propose Rulemaking regarding the Special Supplemental
Nutrition Program for Women, Infants and Children (WIC). USDA proposed
to review the nutritional regulations limiting the amount of sugar in
WIC-eligible cereals. In my June letter, I expressed my support of WIC
and the program's current cap on sugar content, given the importance of
a healthy and nutritious diet to WIC recipients. I wanted to reiterate
my support for the current limit on sugar content, and I again request
any information supporting a review of this issue by USDA.
Answer. I am pleased to know that you, like many of your colleagues
in Congress, are a supporter of the WIC Program. We periodically
consider recent research findings and advice from leading professional
health and nutrition authorities to determine whether revisions in
Federal program guidelines or regulations are needed.
The March 1996 WIC Cereal Sugar Limit Notice stated that USDA was
aware that the newer clinical evidence indicated that sugar consumption
is not believed to be an independent risk factor in the development of
the chronic diseases of coronary heart disease, noninsulin diabetes,
obesity and hyperactivity. We used the public forum of a Federal
Register Notice to solicit feedback from the broad sectors of the
community on whether continuation of a Federal restriction on the
amount of sugar allowed in adult WIC cereal is still warranted. Among
the many comments we received were suggestions that neither sugar nor
any other attribute of WIC foods should be viewed in isolation, but
rather they should be reviewed in the context of all of the WIC foods
and their use in achieving WIC goals.
In follow-up, the Department will publish a notice in the Federal
Register to summarize the public comments USDA received on the March
1996 Notice and to announce the Department's decision to examine WIC
foods for consistency with the 1995 Dietary Guidelines for Americans
and supporting scientific knowledge. USDA's Food and Consumer Service,
in conjunction with the Center for Nutrition Policy and Promotion, will
be conducting a scientific review of the WIC foods. Until this review
is completed, the Department will not be making any changes in the
current Federal sugar cap for WIC cereals.
______
Questions Submitted by Senator Bumpers
organic standards
Several years ago, Congress enacted legislation to establish
federal standard for organic products of which there is a growing
demand. Organic producers in Arkansas have shared with me their
continuing frustration with the delays in USDA's promulgation of these
standards.
Question. What is the status of this effort and when do you think
these standards will be in place?
Answer. I share your frustration and have been assured that these
are complex standards for a wide range of fruits, vegetables, nuts,
field crops, livestock, dairy, and poultry. We anticipate that the
proposed rule for national standards for organic products will be
published this spring. In addition to standards for production, the
national organic program will include provisions for labeling of
organic products; certification of organic farms and processing
facilities; USDA accreditation of private and State agents who will
conduct certification; compliance and enforcement measures; user fees;
and criteria for determining the equivalency of imported organic
products. When the comment period on the proposed rule has closed, we
will move as quickly as possible to address concerns that are raised
and publish a final rule in time for the next crop season.
Accreditation of private and State agents, and the certification of
farms and processing facilities, would begin shortly thereafter.
Question. Can you provide information relating to the economic loss
to the organic industry due to the failure to implement these
standards?
Answer. The organic industry has been growing at a rate of 22
percent each year for the past six yeas. We estimate that the
implementation of national organic standards will allow the industry to
continue to grow at this rate, or higher, for several more years,
particularly with the introduction of organically produced meats and
poultry.
program terminations
Question. The FAIR Act of 1996 terminated many programs that had
long been relied upon by farmers across America. Even before the 96
Act, congress had taken other action to terminate or vastly modify
various agricultural programs. The Honey Program comes quickly to mind.
I know the 96 Act creates a commission to evaluate the direction farm
policy should take in the 21st Century. But I am wondering what
evaluations you may have already made about the short and long term
effects of terminating programs like the Honey Program? Is USDA
following the effects of the termination of farm programs?
Answer. USDA continues to establish supply, use, and price
estimates for a number of crops that remain eligible for production
flexibility contract payments but were subject to the termination of
programs such as the Acreage Limitation, Cash Land Diversion, and
Farmer Owned Reserve Programs.
In the case of honey, all prior program provisions and payments
were terminated. No formal evaluation of effects of this program
termination has been initiated and accounting for honey program supply
and use at the national level has been discontinued. However, honey
marketing information continues to be collected. The monthly National
Honey Market News continues to be published by USDA's Agricultural
Marketing Service. This publication tracks State-level honey prices and
weather, disease, and marketing events affecting the industry.
Additionally, USDA's National Agricultural Statistics Service is
continuing its survey and reporting of the number of honey producing
colonies, yield, production, stocks, average price per pound, and value
of production. These information collection activities do not
constitute an evaluation of the full effects of the termination of the
honey program, but they do help us monitor the situation in the honey
production sector.
Question. What has been the effect of eliminating the Honey Program
on the pollination of crops?
Answer. USDA is not currently examining the effects of the
elimination of the Honey Program on crop pollination. In May 1994,
USDA's Economic Research Service published ``The U.S. Beekeeping
Industry,'' a study directed by Congress. That report included a
profile of the pollination industry but did not establish any
particular linkages between pollination services and provisions of the
Honey Program, so a baseline relationship between the old program and
the availability of pollination is lacking.
The marketing loan provision for honey terminated effective with
the 1994 honey crop, and loans were available only through the 1995
crop. However, in August 1995 the U.S. entered into an agreement with
the Government of China limiting Chinese honey exports to the U.S. and
establishing a price floor for Chinese imports. This agreement is
generally viewed as a major cause of the increase in domestic honey
prices from an average of 53.9 cents per pound in 1993 and 52.8 cents
in 1994 to 68.5 cents in 1995 and 89.4 cents in 1996. Over the same
period, and in spite of these market-price increases, honey production
has steadily declined. USDA estimates domestic honey production at
230.6 million pounds in 1993 and at 198.1 million pounds in 1996. Some
industry opinion is that price increases since 1993 have only offset
operating-cost increases that have occurred due to mite and disease
problems.
The steady decline in the estimated number of colonies (from 2.876
million in 1993 to 2.566 million in 1996) suggests an overall decline
in pollination, and the cause of the decline in colonies appears to be
mites and diseases and not the reduction/termination of price supports.
It is widely held in the honey industry that mites and diseases have
largely eliminated feral bee populations, thereby eliminating
pollination unless provided by commercially managed colonies. The
results of these mite and disease problems are lack of pollination or
deformed fruits and vegetables due to reduced pollination.
Question. Is research on Honey Bee disease and similar topics
keeping pace with this problem?
Answer. Research in honey-bee disease and mite control is not
keeping pace with the growth of these problems, as evidenced by the
dramatic decline in the number of colonies (from 3.528 million in 1989
to 2.566 million in 1996). There is evidence that mites are becoming
resistant to the one insecticide that has been in use, and effective
treatments are not yet perfected for the viral, bacterial, and fungal
diseases that result in colony loss. Further reductions in colony
numbers are anticipated and reduced commercial pollination services may
result.
Question. What other problems do you foresee for the termination or
substantial modifications of other traditional farm programs?
Answer. The new Farm Bill has substantially modified many of our
traditional programs. It is widely assumed that the termination of
Federal acreage controls on crops previously managed by acreage
reductions and land diversions will generate more price and income risk
for producers and possibly more volatile prices for consumers. It has
been difficult to separate the effects of programs from the effects of
market factors on price volatility. However, the phase out of programs
that provided price and income support signals the need for greater
efforts within remaining programs to protect producers from income
fluctuations. Thus, the Department is proposing an expansion of the
revenue insurance programs and is proposing other steps to improve risk
management programs.
Another concern is that any decline in income payments as a result
of a program phaseout may make it more difficult for some commodities
to compete in international markets that are heavily subsidized. And
since export markets are crucial to the prosperity of many commodity
producers, the effect of program changes on our ability to compete in
these markets is an important concern. On the plus side, the
modifications which increase producer flexibility to respond to market
signals should enhance our competitiveness in international markets.
The Department will be studying the effects of changes made in the
1996 Farm Bill. Clearly, when programs are terminated or modified,
substantial adjustments are required by producers and landowners. Our
experience with program terminations is quite limited. The Honey
Program was recently terminated as well as the Wool and Mohair Program.
Both were rather specialized and its not clear yet what lessons can
eventually be drawn from these cases.
The wool and mohair support programs authorized under the National
Wool Act were phased out during the 1994 and 1995 marketing years, and
the National Wool Act was repealed as of December 31, 1995. Since the
program ended, USDA has maintained two annual reports--Sheep and Goats
and Wool and Mohair--which indicate that both industries have continued
a decline that began long before the program phase-out. USDA also has
continued holding quarterly interagency meetings to derive supply/use
estimates and projections for both commodities. However, USDA has not
conducted a formal study to assess the effects of the termination of
the program.
Although support to individual producers has been terminated, the
Federal Agriculture, Improvement and Reform Act of 1996 authorized up
to $50 million for a National Sheep Industry Improvement Center. One
objective is to ``strengthen and enhance production and marketing of
sheep or goat products in the U.S.'' Rural Development is the lead
agency for this effort.
farm safety net
Question. I understand you will soon be sending to Congress a
package of legislative proposals to improve the safety net for farmers
and ranchers to help ease some of the harsh results of the FAIR Act of
1996. Included in that package will be a proposal to extend the period
of time in which commodities may be held under CCC loan.
I have been hearing from farmers in my state, cotton farmers in
particular, who are suffering terribly from falling market prices and
whose CCC loans will be expiring this summer. For example, a cotton
farmer in southeast Arkansas may have cotton under loan for $0.52 a
pound. The price on the New York Cotton Board is around $0.73 a pound.
The farmer may now be able to sell his cotton to a merchant for an
$0.08 equity giving him a total of $0.60 a pound, far below the New
York price. If the term of the loan could be extended, many farmers
would be able to ride out the current marketing cycle. However, I fear
many farmers in my state will not be able to stay in business long
enough to wait for a lengthy legislative process to amend the 1996 Act.
What steps can USDA take immediately to reduce the harm to cotton
farmers, and to farmers generally, resulting from current market
conditions?
Answer. Virtually no policy initiatives have been left to USDA
under the Federal Agriculture Improvement and Reform Act of 1996 (the
1996 Act) which could be used to strengthen prices. This is the primary
reason that we have submitted our legislative proposal which would
grant authority for 6-month loan extensions under certain market
conditions. The tenor of the 1996 Act is that farmers will look more to
the marketplace for their income and essentially requires that farmers
learn new marketing techniques. At this point, we can only suggest that
farmers try to hedge their crops on New York. Instead of selling loan
equities to merchants, farmers do have the option of selling on New
York, themselves, and receiving more than the merchants are offering.
Question. Is there anything USDA can do in this respect short of
legislation?
Answer. The 1996 Act eliminated the authority for loan extensions,
and we cannot use other legislation such as the Commodity Credit
Corporation Charter Act as authority to do so. New authority must be
enacted by Congress.
county office closures
Question. I appreciate your statement of recent days that county
offices will not be closed without close examination of continuing
demands for service delivery. Can you provide an idea of the type of
criteria and timetables you will use in implementing further downsizing
and office closures?
Answer. The fiscal year 1998 President's budget anticipates
reducing the FSA's employment by approximately 2,100 staff years from
fiscal year 1997 estimated levels. This reduction, primarily in the
field, reflects the reduced workload associated with the programmatic
impacts of the 1996 Farm Bill and the anticipated closing of 500 USDA
field service centers by the end of 1999 as stated in the 1998 Budget
proposal. Agency and USDA plans have not yet been finalized and will
not be until after consultations with Congress on any further office
closures. We anticipate spending much of fiscal year 1997 analyzing our
service delivery systems in order to obtain an optimum organizational
structure while stressing efficient and effective service to our
customers. This includes contracting for an independent study to
explore opportunities for further savings in FSA and NRCS.
Question. If we have no choice but to provide funding levels for
personnel below the budget request, do you have enough buy-out or
similar authorities to avoid the disruptive results of simple
Reductions in Force?
Answer. The fiscal year 1998 President's Budget request for FSA
Salaries and Expenses includes $56.2 million in separation costs in
order to achieve staffing reductions of 2,119 employees in fiscal year
1998. This amount includes $6.7 million to separate 269 Federal office
employees and $49.5 million to separate 1,850 non-Federal county office
employees. These estimates reflect the assumption that reductions-in-
force will make up 75 percent of all separations since the number of
employees eligible for buy-out is declining due to the major use of
buyouts within the FSA over the last several years. If Congress
appropriates 1998 funds below the budget request, the Agency would be
forced to conduct an even greater RIF in fiscal year 1998. As stated,
not all reductions can be achieved through buyouts since the number of
remaining buyout candidates is insufficient to meet any additional
staff reduction that reduced funding levels might require.
meat and poultry inspection user fees
The budget again proposes user fees for meat and poultry
inspection. This time, the proposal goes beyond previous efforts to
recover the cost of second shift activities and would, instead, cover
all in plant activities. This would cover roughly 70 percent of all
FSIS costs and generate approximately $390 million annually.
User fee proposals have been defeated in the past for a number of
reasons and, obviously, this is a matter for the authorization
committee. One of the reasons for these defeats has been a perception
that having the companies paying for food safety inspection might be
like the fox guarding the proverbial hen house.
Question. Is there a strategy whereby the imposition of these fees
could be perceived as enhancing food safety and, thereby, improving
consumer confidence?
Answer. The Administration believes that expanding the authority
for the collection of user fees is essential to the successful long-
term implementation of meat, poultry, and egg products inspection
reforms, including HACCP. The collection of user fees will permit the
agency to achieve dual goals of ensuring that the demand for on-site
inspection services are met and the implementation of reforms to
improve food safety are completed. Ensuring adequate inspection
coverage and improving inspection processes will give consumers greater
confidence in the safety of the American food supply. Some have
indicated that the collection of user fees will compromise our ability
to fulfill our obligation to ensure the safety of the food supply. This
is not so. We currently collect fees for overtime holiday, and for
providing voluntary inspection services to facilities handling
nontraditional animals, which does not affect the manner in which we
carry out our inspection responsibility.
conservation reserve program
Question. You recently announced new rules to implement the
Conservation Reserve Program (CRP) hoping to achieve a total enrollment
of 36.4 million acres. CRP has been criticized for keeping valuable
lands out of production and enrolling lands of questionable
environmental benefit.
Your final rule, in my opinion, is well suited to meet the
objectives of CRP that I think are worthwhile and of which I believe
will silent past criticisms. Still, there are those who might question
the fact that, technically, millions of acres will be eligible that are
of marginal environmental value. I understand the use of your
Environmental Benefits Index should result in the enrollment of only
the most environmentally sensitive lands.
Can you explain how you will regard the ``cost'' factor of your
eligibility criteria to make sure lands of value environmentally will
be enrolled instead of less advisable lands?
Answer. The cost factor is one component of the overall
Environmental Benefit Index (EBI). The EBI is simply the sum of 6
environmental factors plus cost. The cost factor provides more points
to offers with lower rental rates. If two bids had the exact same
scores for environmental benefits, the offer with the lower rental rate
would receive a higher score and would be ranked above the other offer.
CRP rental rates are based on soil productivity; thus, the bid with the
more productive land will rank lower than the less productive acreage.
The decision on the weights to be used for the cost factor will be
determined after signup concludes.
Question. How soon do you think you will have the results of your
first sign-up under the new rules?
Answer. Our goal is to notify producers as soon as possible after
signup concludes. We anticipate the fifteenth CRP signup to be the
largest in the history of the program. This will present the Department
many challenges but we are committed to getting the job done in a
timely manner. All producers will be notified as soon as possible;
however, due to the volume of offers to be processed, it is likely to
be late May or early June before producers receive word on the
acceptance or rejection of their offer.
fund for rural america
Question. The Fair Act of 1996 provides you $100 million annually
for three years to fund research and rural development activities
beyond the normal appropriations process. There has been concern that
unless the Fund was used in a most innovative manner, there would be
attempts to recapture those savings for shortfalls in other
discretionary items.
Do you think the Fund for Rural America will meet the
``innovative'' test? Can you explain how your implementation of the
Fund will do more than simply placing additional funds in select
appropriations? How will you use the Fund to do what this subcommittee
can't?
Answer. As you are aware, I decided to use the Fund to augment the
single family housing program level which, because of interest rate
differences decreased from $1 billion to $525 million in fiscal year
1997. Using the Fund enabled us to increase the program level to $740
million. We also used the Fund for Water 2000 projects, Rural Business
Enterprise Grants, and to meet some other critical needs. I am
convinced the Research component of the Fund will generate innovative
projects that address both agricultural and rural development problems.
In addition, I directed that a small part of the Fund be used to
address some needs related to value-added cooperative development
efforts. The announcement on the use of this funding will be
forthcoming.
rural development program
Question. The budget proposal calls for combining several rural
development programs in order to give additional flexibility to State
Directors> Previous appropriations bill have given you increasing
levels of flexibility to mix and match rural development programs, Your
proposal also calls for $50 million for rural development grants to
states.
Can your quantify the result of the flexibility in program delivery
previously provided by appropriations acts? Even though $25 million of
the $50 million in grants to states are ``matching'' grants, what
assurance do you have that the states will spend an additional $25
million from what they would otherwise spend? Have you examined the
history of other federal economic development grant programs that were
delegated to the states? If so, what were the fate of those programs?
If we provide grants to the states, do you advise allowing the states
broad use of those funds for any activity?
Answer. I understand that during 1996 there was 46 instances of
State Directors transferring budget authority within the water and
waste disposal loan and grant programs. The vast majority of the
transfers were from grant to loans, indicating to me that the State
Directors were exercising good judgement by funding more projects than
they would have under previous authority. A total of 30 state offices
transferred budget authority from grants to loans. The monetary effect
of these transfers was $9 million in grant generated $40 million more
in loans. Sixteen states transferred budget authority from the loan
program to grants, thereby reducing available loan funds by $9.3
million to make $2 million in grant funds available. One State Director
shifted all of the grant funds to loans.
I understand the 1996 Farm Bill requires that States not supplant
normal state expenditures with the funds made available under RCAP. We
would of course have to monitor that, but there is some assurance the
funds would be used for additional projects. I agree that the history
of block grants is checkered. However, the Fair Act requires that the
States expend the block grant funds for purposes similar to those
funded by our agencies.
municipal annexation
Question. Section 1926(b) of the Consolidated Farm and Rural
Development Act imposes prohibitions on the curtailment or limitation
of services provided through certain USDA programs.
Please provide your view of what a repeal or substantial
modification of this section would do to the delivery of services to
rural areas and additional cost to USDA that might result through
defaults or by other means. What is the Department's position on any
changes to this provision?
Answer. There are several areas of concern when discussing the
annexation of property served by USDA financed water and waste systems.
These concerns are:
1. Many rural systems serve users that are sparsely located and not
easily served by traditional municipal systems. If part of the system
is annexed, the remaining system must remain viable, but to do so may
require increases in user rates that would make the system non-
affordable to most users. If that occurs the entire system fails.
2. If all or part of a system is annexed, the USDA borrower must
receive appropriate value for it because the borrower is still
obligated to repay the USDA loan. If the system involves grant funds,
then the value must reflect the value of the grant when originally
financed. Otherwise the system is obtained at less than true value.
3. To ensure protection of loan security, USDA must approve any
lease or sale that pertains to a USDA financed system. In many parts of
the country the service areas are defined by State or local
jurisdictions and when the service area is defined prior to development
of systems, the need to invoke protection under section 1926(b) is
alleviated. However, other States do not establish legal boundaries. It
should be noted that section 1926(b) does not prevent the annexation of
areas into a city. It only prohibits cities from taking USDA financed
systems and the customer base that is needed to ensure that the debt is
repaid.
falling trade projections
Last year, you reported that U.S. agricultural exports were
approaching $60 billion and you anticipated we would exceed that amount
during the current fiscal year. Earlier this week, you released figures
showing the estimate for fiscal year 1997 is $55.5 billion and
projections for fiscal year 1998 are only up to $56.5 billion. These
figures are well below the $59.8 billion of fiscal year 1996 let alone
the anticipated $60 billion plus.
Question. To what can you attribute this decline in export
activity?
Answer. The Department first released its $60 billion forecast for
fiscal year 1996 U.S. agricultural exports in February 1996, after only
the first quarter of trade data was available. The Department held to
the $60 billion figure when trade forecasts were reexamined in May and
August of 1996. When the full fiscal year 1996 trade figures were
available in November 1996, the figure came in at $59.8 billion--a
difference of less than one-half of one percent from the forecast which
the Department had carried for nine months.
In December 1996, the Department released its second fiscal year
1997 export forecast placing the value at $55.5 billion. In February
1997, the fiscal year 1997 export forecast was revised upward $1
billion to $56.5 billion. This is the Department's current fiscal year
1997 forecast. There are no official Department trade forecasts for
fiscal year 1998.
The decline from $58.9 billion in fiscal year 1996 to an estimated
$56.5 billion in fiscal year 1997 is mainly due to reduced export
prospects for U.S. wheat and corn which should more than offset
expected export gains for U.S. soybeans and products, and high-value
meat and horticultural products. Both lower prices and lower shipment
volumes are expected to reduce export value for U.S. wheat and corn.
With respect to wheat, Argentina and Australia have just harvested
their largest wheat crops on record, and the European Union has also
harvested a large crop. Faced with greater competition in global export
markets, world prices have weakened and U.S. export volume is expected
lower. With respect to corn, larger crops in some key importing
countries and increased availability of foreign feed grain supplies,
including feed-quality wheat, are expected to reduce U.S. corn export
value and volume.
Question. What outlook do you have for the years beyond fiscal year
1998?
Answer. With respect to long-term trade forecasts, the Department's
Economic Research Service publishes its ``Agricultural Baseline
Projections'' twice a year. ERS currently projects U.S. agricultural
exports to the year 2005, which reflect the U.S. agricultural policies
set in place by the 1996 Farm Bill as well as other important domestic
and international factors affecting trade. According to ERS's latest
projections, published in January 1997, U.S. agricultural exports
initially decline from the record set in 1996, but then begin a steady
rise in 1998 to approach $80 billion by 2005.
From 1998 to 2005, high-value product exports are projected to
account for about 60 percent of total U.S. agricultural exports led by
export gains in horticultural and animal products. Bulk commodities
should continue to account for about 40 percent of the total, which
implies that export gains for bulk commodities will remain above the
gains recorded in the late 1980's and early 1990's.
It is important to understand that such long-term projections are
based on trend analysis and, therefore, cannot be expected to
anticipate the inevitable shorter-term, year-to-year variations from
the estimated trends. The bulk commodity portion of U.S. agricultural
exports is especially hard to forecast due to the difficulty of
predicting short-term supply ``shocks''--that is, annual changes in
U.S. and major foreign producer crop size.
public law 480 reductions
The budget proposal provides a reduction of Public Law 480 Title I
by $117.2 million in program level. In addition, the budget calls for a
rescission of $50 million in budget authority in fiscal year 1997. In
particular, the rice shipments under Title I are projected to drop from
126,000 metric tons in fiscal year 1997 (without the rescission) to
17,000 metric tons in fiscal year 1998.
Question. In view of declining trade figures, why has USDA called
for further reductions in Title I?
Answer. The budget proposes reduced funding for Public Law 480
Title I in fiscal year 1998 because of the constraints on discretionary
spending we face. In order to meet the President's goal of balancing
the budget by 2002, we are required to make difficult choices and
propose lower funding for certain programs.
Question. Since Title I levels can be transferred to Title II, does
this action indicate less of a need for Title II?
Answer. The reduction proposed for the Title I program is not
directly related to funding requirements for the Title II program.
However, in developing our Public Law 480 budget proposals, we have
maintained funding for Title II donations at the current year level
because of its humanitarian objectives, while proposing a reduced
program level for Title I.
rice trq in the eu
As part of the GATT Agreement, the U.S. was to achieve duty-free
access for rice imports equalling 38,000 tons into the EU. To date, no
U.S. rice has been exported to the EU duty-free. I understand you have
little if any authority to take action until an agreement within the
U.S. rice industry has been achieved.
Question. Can you provide your thoughts regarding ways to resolve
this issue?
Answer. As compensation for lost trade resulting from the accession
of Austria, Finland, and Sweden to the European Union, an agreement
between the United States and the EU was negotiated under the GATT and
went into effect on January 1, 1996. As part of this compensation
package, the EU agreed to open a tariff-rate quota or TRQ of 63,000
metric tons for semi-milled and wholly milled rice at a zero in-quota
duty, of which 38,000 metric tons was reserved for the United States.
The compensation also provided for a TRQ of 20,000 metric tons of
husked brown rice to enter at an 88 ECU/MT in-quota duty, of which
8,000 metric tons was reserved for the United States.
In July 1996, the EU passed a regulation implementing the TRQs for
rice, but this did not include a system to allocate the U.S. portion of
the TRQs. The Commission was waiting for the U.S. industry allocation
system to be finalized before implementing the TRQs for the United
States. In order to implement a system for allocating the U.S. share of
the TRQs, several U.S. industry groups have applied to the U.S.
Department of Commerce for an Export Trade Certificate of Review.
However, largely because of the lack of agreement within the U.S.
industry, the EU has not yet opened the TRQs for either 1996 or 1997.
There seem to be only three possible ways in which this issue could
be resolved. Ideally, if the U.S. industry could come to agreement on a
way to allocate the quota, the U.S. industry could benefit from the
quota rents which are worth about $30 million a year. Alternatively, if
the U.S. government were given the ability to allocate quotas, the
benefits would still remain on the U.S. side. If neither of these
options is feasible, however, it will be necessary to allow the EU to
allocate the quotas; this would deprive the United States of the quota
rents, but would at least preserve the market access of the TRQ's.
Question. What do you see as being at stake for the U.S. rice
industry long-term?
Answer. The stakes are substantial. As a result of the three new
countries acceding to the EU, the United States lost a considerable
amount of rice trade. U.S. exports of milled rice to those countries
fell from an average $17.1 million in 1992-94 to an average $3.8
million in 1995-96; exports of brown rice to the three countries fell
from $1.1 million in 1992-94 to $23,570 in 1995-96.
Question. In what way might this dispute spill over into other
trade issues such as trade barriers such as with Chile or China?
Answer. The way in which this issue is resolved could have an
impact on how we negotiate quotas with other countries in the future,
i.e., whether we try to achieve--either for the U.S. industry or for
the U.S. government--the quota rents inherent in any TRQ.
______
Question Submitted by Senator Kohl
state trading enterprises
Mr. Secretary, on the issue of international trade, we have had
several discussions about our mutual concerns about the activities of
the monopoly state trading enterprises, such as the New Zealand Dairy
Board and the Canadian Wheat Board, and some of the unfair trade
advantages that those groups have in the world market. And I appreciate
your efforts to make this matter a priority in international
negotiations, such as the recent WTO Ministerial Meeting in Singapore.
Question. Given the growing importance on this matter, and the
potential negative effects of STEs on the international trade potential
of so many commodities of importance to the United States, would you be
willing to establish a special STE Advisory Group? We have such a low
threshold of knowledge on this issue, and there is so much at stake, I
believe a more concentrated effort could be useful.
Answer. The import and export activities of STEs, along with other
issues such as tariff reductions, definitions of subsidy policies, and
further cuts in subsidy levels, continue to be priority issues for the
Department as we assess compliance with Uruguay Round commitments and
our goals and objectives for continuation of the reform process in
agricultural trade. Regarding any WTO-inconsistent policies of STEs, we
welcome industry input, including through our Agricultural Technical
Advisory Committee and Agricultural Policy Advisory Committee system.
Such input would supplement the considerable amount of analysis of STEs
which has already been done by the Department and the General
Accounting Office.
Additionally, as we prepare for the continuation of agricultural
negotiations in the year 2000, we would welcome industry input on
negotiating objectives with respect to STEs. We do not believe that a
special advisory group is required at this time, as appropriate
mechanisms already exist, but welcome hearing your concerns.
______
Questions Submitted by Senator Byrd
water 2000
Question. What progress did the U.S. Department of Agriculture
(USDA) achieve on meeting the goals of Water 2000 in West Virginia in
fiscal year 1996?
Answer. In fiscal year 1996 the USDA achieved significant, steady
progress in the state of West Virginia toward the safe drinking water
service targeting goals of Water 2000.
In total, the department invested $23.3 million in Water and
Wastewater loans and grants ($13.1 million in loans, $10.2 million in
grants) in water and wastewater projects in West Virginia. This
investment funded a total of 22 drinking water projects, and three
wastewater projects.
Of the 22 water projects, 14 were deeply targeted Water 2000
investments to the projects of lower income communities with
significant numbers of unserved or under served residents.
Finally, of the 54 projects funded by the department in mid-July of
1996 as part of its Water 2000 nationwide roll-out, four were in West
Virginia (Page-Kincaid Service District, Downs Public Service District,
Leadsville, and Red Sulphur Public Service District). Of a total of
$58.7 million in loans and grants invested in the roll-out, $2.25
million went to West Virginia.
These numbers show that despite a 25 percent overall reduction in
funds for fiscal year 1996, the department made measurable progress on
Water 2000 in West Virginia, the state with the fifth greatest need in
the nation for targeted safe drinking water investments.
Question. What progress does the agency expect to make in fiscal
year 1997?
Answer. For fiscal year 1997, a 35 percent increase in the loan and
grant program level means that the department will fund substantially
more targeted drinking water projects in West Virginia than in fiscal
year 1996.
Our staff in West Virginia are working closely with the State
Infrastructure Fund to leverage their loan and grant dollars. Such co-
funded proposals compete very well for national USDA discretionary
funds.
Question. What progress does the agency expect to make toward the
goals of Water 2000 with respect to the President's budget?
Answer. Within the President's request for loans and grants, the
USDA will continue to make significant, steady progress toward the
goals of Water 2000. Nationwide in fiscal year 1995 and fiscal year
1996, combined, the USDA invested $351,960,836 in deeply targeted loans
and $195,306,345 in deeply targeted grants, for a total of
$547,267,181, in 535 Water 2000 projects. This investment, however,
still leaves a gap of over $2.8 billion to reach the at least $3.4
billion needed (according to the USDA's 1995 Water 2000 Needs
Assessment) to correct the nation's most serious rural safe drinking
water problems.
Question. Are there any barriers that the agency can identify that
are preventing West Virginia agencies from receiving USDA
telecommunications grants and loans?
Answer. There are no barriers in West Virginia that we are aware We
have received very few applications from West Virginia over the past
four years of the program.
fsa downsizing
Question. How will the expected Farm Service Agency downsizing
impact West Virginia?
Answer. I cannot provide any details on that because no specific
agency or USDA plans for reducing employees or numbers of offices, by
State, have yet been finalized. Any decisions to close USDA field
offices must be done in coordination with other agencies, including
Rural Development and Natural Resources Conservation Service, and
approved by me, after full consultation with Congress.
flood control planning
Question. In 1996, the President made five national disaster
declarations for West Virginia as a result of severe flooding. The
affected communities critically need leadership in developing flood
control plans. Please provide recommendations on how the USDA might
assist West Virginia.
Answer. In response to Congressional appropriations language, the
Natural Resources Conservation Service (NRCS) is providing $300,000
from the PL-534 program under Watershed Protection and Flood Prevention
to develop community-based comprehensive resource management plans for
communities devastated by the 1996 flood events. The funds are being
used to secure Agricultural/Engineering consulting firms to develop a
North Fork South Branch Potomac River Watershed Plan. The consultant
will work under the direction of the NRCS Community Based Assistance
planner and will provide direct assistance to the North Fork Watershed
Committee.
Also, NRCS is working with other Federal agencies in West Virginia
and other states where there has been a declared national disaster to
implement guidance issued on February 18, 1997, by the Office of
Management and Budget and the Council on Environmental Quality. This
guidance establishes a goal that Federal agencies ``...achieve a rapid
and effective response to damaged flood and floodplain management
systems that will minimize risk to life and property, while ensuring a
cost-effective approach to flood damage mitigation and floodplain
management and the protection of important environmental and natural
resource values that are inherent to the floodplain and adjacent
lands.''
This guidance includes the following procedure:
1. Setup or use existing repair coordination team to review all
needs and proposals
2. Include representative from applicable state and federal
agencies
3. Make recommendations as to the appropriate program and measure
to use in addressing the damages
4. Encourage local community involvement
5. Develop a flood response plan.
The local NRCS staff and the other agriculture agencies work
together after each storm event or other natural disaster to identify
the damaged areas and develop damage survey reports (DSRs). DSRs
include the work needed and the estimated cost. Total costs are then
included in a request for supplemental appropriations for the Emergency
Watershed Protection Program (EWP).
aquaculture
Question. While the National Center for Cool and Cold Water
Aquaculture is under construction, what actions will the USDA take to
expand cool and cold water aquaculture opportunities in the state?
Answer. The National Center for Cool and Cold Water Aquaculture
(NCCCWA) could be operational as early as the year 2000. While the
Center is under construction, USDA will take the following actions to
expand cool and coldwater aquaculture opportunities in West Virginia:
1. The Agricultural Research Service (ARS) will continue to work
closely with the Freshwater Institute in Shepherdstown in implementing
a comprehensive research program in ``Development of Aquacultural
Systems for Appalachia'', administered by ARS. The goal of this program
is to promote the expansion and diversification of the cold water
aquaculture industry through the development of high volume, under-
utilized water resources common to Appalachia. With guidance from ARS,
the Freshwater Institute is presently developing a new 5-year proposal
to design and install a scaled-up intensive production facility for
trout and other salmonids, employing state-of-the-art technology for
water reuse, that will be evaluated for commercial use.
2. ARS will continue to conduct an aquaculture research program at
its Appalachian Fruit Research Laboratory in Kearneysville. The focus
of this program is to determine the feasibility of using fish wastes
from intensive aquaculture production systems as a nutrient source for
fruits produced hydroponically in greenhouses. This is a promising
approach to managing aquaculture wastes, maintaining water quality, and
diversifying agriculture in West Virginia and Appalachia. ARS is
conducting this program in cooperation with the Freshwater Institute
and the Leetown, WV Science Center of the U.S. Department of the
Interior.
3. ARS has reached an agreement with the Leetown Science Center
(LSC) to contract for the services of a highly qualified LSC fisheries
scientist, with considerable aquaculture experience, to serve as an on-
site liaison for the design phase of the NCCCWA. This individual will
assist ARS in ensuring that the facility design complements the
facilities and resources of the LSC and optimizes the opportunities for
conducting research and delivering results that best serve the needs of
the U.S. in general and West Virginia in particular.
4. ARS will work closely with the University of West Virginia and
appropriate state agencies to identify and develop opportunities for
collaboration in aquaculture research and delivery of research results.
5. ARS is developing a technical resource group, consisting of
aquaculture scientists, representatives of the cool and coldwater
aquaculture industry, and key individuals in West Virginia. This group
will work closely with ARS to help define a comprehensive research
program for the NCCCWA that will best serve the interests of the U.S.
aquaculture industry and the state of West Virginia and that will
effectively complement related programs within and outside West
Virginia.
______
Questions Submitted by Senator Leahy
national cheese exchange
I think everyone would agree that dairy farmers, regardless of the
region, deserve a fair, accurate, and representative price for milk. I
am deeply concerned that the cheese exchange fails to meet those
important criteria. Strong evidence shows that the cheese exchange may
have been manipulated by large corporate traders to the detriment of
farmers across the country. As you know, Senator Jeffords and I
recently sent you a letter explaining our view of the cheese exchange
and its role in determining the Basic Formula Price. I think an
alternative pricing mechanism which deserves strong consideration is a
national electronic survey, operated by the Department.
Question. I would like to know whether you think a national
electronic survey of dairy prices could provide a more accurate
estimate than the current system of using the cheese exchange?
Answer. In response to concerns about the accuracy of cheese prices
reported by the National Cheese Exchange, I have directed the National
Agricultural Statistics Service to develop a weekly cheddar cheese
price survey. With the support of the industry, this weekly survey will
provide a timely reliable national cheese price. Plans include the
combination of reporting through electronic mail, facsimile, and
telephone to expedite data collection.
On January 29, 1997, the Department announced it was taking steps
to address concerns raised about how milk prices are calculated and is
seeking comments on whether there exists a superior alternative to NCE
prices for administering Federal milk marketing orders. If improved
price setting arrangements are identified, the Department will not wait
for the Milk Marketing Order reform deadline of April 1999 to implement
them.
Question. Do you believe such a survey would require additional
funding?
Answer. Although conducting the weekly price survey of cheddar
cheese prices is a new activity for the National Agricultural
Statistics Service, they will perform this activity within available
funds.
conservation reserve program
Question. I appreciate the efforts the Department has made in
carrying out our intent to refocus the Conservation Reserve Program to
enroll the most environmentally-sensitive lands as contracts begin to
expire later this year. As part of this effort, I understand you are
going to enroll cropped wetlands and adjacent upland buffers, as well
as upland buffers around non-cropped wetlands in the CRP. Departmental
guidance indicates that these adjacent upland buffers may be up to six
times the size of the wetlands around which they are established. Has
the Department developed technical criteria for establishing these
buffers to ensure that only the lands needed to buffer the wetland from
adjacent land use are enrolled and to establish manageable contracts?
Answer. Guidance has been issued by the Natural Resources
Conservation Service to its field units to ensure that buffer areas are
limited to that which is needed (copy attached). Additionally, NRCS is
undertaking a coordinated oversight effort to determine the extent to
which the buffer area decisions and other technical CRP decisions being
made in the field are consistent with national guidance and to
determine where it may be necessary to issue additional instructions.
Question. What efforts are you making to ensure that accepting
wetlands and associated buffers into the CRP will not result in direct
competition with enrollment in the Wetlands Reserve Program,
potentially driving up the cost of both programs?
Answer. The Department does not believe there is a competition
problem. The purpose of expanding CRP land eligibility to include
cropped wetlands and their adjacent lands is to restore and protect
wetland functions and values to achieve substantial wildlife habitat,
water quality, erosion control, and flood control benefits without
competing with existing programs like WRP. The maximum enrollment level
under each program and the duration and extent of conservation
protection are notably different which could result in each program
having a separate landowner constituency. If there is a cost increase,
it may be in the form of higher WRP per acre easement payment costs as
the WRP program begins to enroll a higher percentage of PC's in lieu of
cropped wetlands. Generally, the PC's would be expected to have a
somewhat higher land value than would the cropped wetlands.
wetlands reserve program
Question. We restructured the Wetlands Reserve Program in the 1996
Farm Bill such that the Department would enroll, to the extent
practicable, one-third of the acres in permanent easements, one-third
of the acres in temporary easements, one-third in voluntary cooperative
agreements. Have you experienced interest among landowners in all three
enrollment types to meet the 1/3-1/3-1/3 enrollment goals?
Answer. Under the 1997 continuous sign-up, we have received
applications for all three of the program components. Landowners have
thus far offered approximately 144,000 acres for permanent easements,
96,000 acres for 30-year easements, and 13,000 acres for restoration
cost-share agreements. We anticipate that landowner offers will
continue throughout the year in the same relative proportion that has
occurred during the first five months of the year. By the end of
September, total offers will likely be at least double that which has
already been received. This extensive backlog list of ranked offers
will serve as the basis for the initial allocation under the 1998
program.
Question. Is splitting the enrollment equally among these three
options practicable? If not, do you have an alternative ratio that
would be more reasonable to achieve?
Answer. The 1/3-1/3-1/3 split is not the best manner in which the
program could be implemented. Based on the landowner response to date
it is apparent that permanent easements are the most popular and are
being severely underfunded. The 30-year easements, while less popular
than the permanent easements, still have enough landowner interest to
make it practicable for the Department to reach the goal established in
the 1996 Act. The restoration cost-share agreements appear to be far
less popular than will be needed for the Department to be able to reach
the goal established in the 1996 Act. This may become even more
problematic once the CRP cropped wetlands enrollment begins to take
full effect. For the Department to be able to enroll the most cost
efficient and most ecologically sound wetland restoration projects in
response to landowner offers, a ratio of 45 percent permanent, 40
percent 30-year, and 15 percent restoration cost share agreement would
be more practicable. We do continue to support having all three options
as components of the WRP.
mitigation exemptions
Question. An underlying theme of the Wetland Conservation
provisions in the 1996 Farm Bill was increasing mitigation flexibility
options to the producer, while maintaining existing wetland functions
and values on the landscape. How is USDA implementing these provisions
to ensure wetlands functions and values are in fact being maintained?
Answer. In order to successfully implement the wetland mitigation
exemption provision of the 1996 Farm Bill, it is necessary to conduct
functional assessments of the wetlands to determine the impact of the
conversion activities in order to replace the functions that are lost.
Interagency (NRCS, USACE, FWS, EPA) workshops are scheduled this spring
to provide guidance to the states on developing an Interim Wetland
Functional Assessment Method based on the philosophy of the
Hydrogeomorphic Approach to the Functional Assessment of Wetlands (HGM
approach). The objective of the workshops is to train partners in the
development of a functional assessment method that has the potential to
be used by all agencies involved in wetland programs. Thus, providing a
science-based process for making mitigation decisions which is
developed and supported by these agencies.
When a wetland mitigation exemption is granted by NRCS, the
landowner is required to place an easement on the mitigation site. NRCS
documents the information regarding the functions and values lost on
the converted site and the functions and values replaced on the
mitigation site, based upon the output from a functional assessment
evaluation. It is the responsibility of NRCS to ensure that the
proposed mitigation plan is viable. NRCS will conduct follow-up
inspections of the mitigation sites until all practices are
successfully established, including successful establishment of
vegetation and restoration of hydrological features as planned.
conservation reserve program
Question. As you know, I and many other Northeastern Senators
played an important role in making sure CRP was reauthorized. That
represents a huge federal financial contribution. Obviously, one reason
we could do so was our belief that CRP could help address water quality
and other environmental problems in our regions. In the last generation
of CRP, the region from Virginia north enrolled only 300,000 acres. In
Vermont, only 193 acres were enrolled. Most experts believe that a
critical reason was the rate structure. CRP pays prevailing
agricultural rental rates. And, in much of the Northeast, even the
speculative possibility of development has a strong influence on fair
market value. Second, in much of our region, the rental market is
influenced by residential landowners who rent farmland out at cheap
rates, essentially to make sure the land is cared for. And it seems to
me that CRP is not paying fair market value. The proof is that we have
extremely limited enrollments in my region.
The market is showing us the rates as they are now set are not at
fair market value, or farmers would be enrolling their land. So my
question is--what is the Department going to do about this?
Answer. Rental rates have been developed to reflect the dryland
agricultural market value cash rents, or cash equivalent of a share
rent, for each cropped soil in each county through two general steps.
In the first step, NRCS and FSA national offices developed a soil
productivity index for each unique soil type based on existing soil
characteristics data from soil surveys. In the second step, these draft
soil rental rates were distributed to each State and County FSA and
NRCS office, who worked with other agencies to review and analyze, and
if necessary, adjust the rates to ensure that they reflected prevailing
market rents.
The State and county FSA committee in Vermont, along with other
local representatives with knowledge of agricultural rental rates,
developed dryland cash rental rates, adjusted for soil productivity,
for each soil. The State and county FSA committees, with NRCS
concurrence, determined that the rates needed no further adjustments.
The CRP rental rate accurately reflects the local prevailing
agricultural rental rates in their State.
Along with the use of an environmental benefits index, adoption of
the new soil-specific market-based maximum acceptable rental rates has
had a positive effect on CRP enrollment in the northeastern U.S.
(including Virginia). As a proportion of total CRP enrollment, the
northeast's share nearly doubled from about 0.7 percent of the 33.9
million acres that were enrolled before 1990; to about 1.3 percent of
the 3.1 million acres that were enrolled after 1990.
Question. The Department clearly has authority to be creative on
this issue, the Food Security Act (paragraph 1234(c)(1), states: ``In
determining the amount of annual rental payments to be paid to owners
and operators for . . . (CRP), the Secretary may consider, among other
things, the amount necessary to encourage owners or operators . . . to
participate in the program . . .''
In other words, you may consider what rates will actually encourage
enrollments. Further, section 1231(f)(4) states, that in conservation
priority watersheds: the Secretary shall attempt to maximize water
quality and habitat benefits . . . by promoting significant level of
enrollment . . . by whatever means the Secretary determines appropriate
and consistent with no additional measures are necessary to promote a
``significant level of enrollment.'' But in the Northeastern priority
areas, such as Lake Champlain, additional incentives would seem to be
necessary to promote ``significant level of enrollment.''
What type of incentives could the Department use to address this
concern and have you done it in other areas of the country?
Answer. CCC currently provides incentives to encourage enrollment
of certain high priority environmental practices such as filter strips
and riparian buffer areas. The incentives provide an annual increase of
10 percent to 20 percent over the site specific soil rental rate for
the CRP offer. The incentives are used to encourage the implementation
of these high priority practices. Any producer in any region of the
country is eligible to receive an incentive payment if they install
certain continuous signup practices such as riparian buffer areas.
Question. My region has a number of water bodies of high public
concern that are threatened by pollution. Obvious examples include Lake
Champlain, Long Island Sound, and the Chesapeake Bay. In many of these
areas, farmers, environmentalists and State officials have come
together to develop a comprehensive plan to improve water quality, but
they sorely need financial support. I have heard about new use of the
CRP provision that allows you to approve State-submitted Conservation
Reserve Enhancement Programs which would allow States to submit
comprehensive plans to tailor CRP to local needs with an additional
contribution of State funds. This seems to demonstrate an important way
to show the public that CRP can make a real difference for dealing with
pollution problems and that incentive-based approaches can solve a
specific problem. I know that several states are awaiting the
Department's reaction to plans submitted by Maryland and Illinois.
What is the Department's attitude toward them? Do you have a
schedule for approving these plans?
Answer. The Department supports the development of partnerships
with States to address critical resource needs of State and National
importance using applicable and appropriate provisions of CRP. State
Government, working with CCC, is requested to develop a comprehensive
plan that outlines: (1) the resource issues to be addressed; (2), the
expected societal benefits to be achieved by the program; (3), the
State and local contributions; and (4) the role of CRP to address
resource issues. Currently, negotiations are under way between USDA and
State agencies in both Maryland and Minnesota to develop and finalize
Conservation Reserve Enhancement Programs.
Question. Have you set a date when other States would be invited to
submit proposals?
Answer. States may submit requests for a State Enhancement Program
at any time. The final rule published in the Federal Register included
language regarding the availability of the Conservation Reserve
Enhancement Program, and training has been provided to all FSA and NRCS
State personnel.
A number of Senators have raised concerns over the Department's
decision to expand the amount of eligible land for enrollment in CRP as
the bulk of existing CRP contracts expire. I have long been a champion
of the Program and believe that under the new rule the Agriculture
Department will have the opportunity to move this Program forward to
maximize environmental benefits and to help American farmers conserve
the resources of their land. How the Department applies the
Environmental Benefits Index (EBI) to select land for enrollment will
be critical to ensuring that CRP funds are used most appropriately. I
am concerned about several factors in the EBI and how they will be used
in the 15th sign-up.
First, I am concerned about the cost factor in the EBI. Land with
very high environmental benefits but relatively high cost should not be
disadvantaged by the index. At the same time, it is very important that
within a state or region, the cost factor in EBI be used to maximize
competition to ensure the most cost-effective program possible.
Question. Will the cost factor be used primarily to encourage
competition within regions? Or will it be used to give priority to
enrollments in low-cost land areas rather than to the most competitive
bids within a given area?
Answer. The Environmental Benefit Index (EBI) is the sum of 6
environmental factors plus cost. The EBI is designed to rank lands for
enrollment into CRP that will maximize environmental benefits relative
to cost. In order to effectively achieve that goal, each CRP offer is
evaluated relative to every other offer in the country. An offer with a
lower point score on the 6 environmental indices but a lower rental
rate may not be more competitive than an offer that has a higher score
on the 6 environmental factors and a high cost per acre. EBI is
evaluated based on the total score of environmental factors and cost.
Second, I am concerned that during the 15th sign-up and a possible
fall sign-up the Department will be flooded with applications from
expiring contract holders. In this situation, it is possible to enroll
a great deal of land that has a lower EBI in the next two sign-ups than
land that may be available for enrollment in future years.
Question. Will the USDA implement a ``floor'' for an EBI rating
when it is selecting the land for enrollment in future sign-ups?
Answer. After signup, CCC will thoroughly review all offers to
ensure that land accepted into CRP provides significant environmental
benefits relative to cost. CCC will use actual CRP bid data to evaluate
the relative environmental benefits for each offer. Bids that do not
provide significant environmental benefits relative to cost will not be
enrolled in the program. USDA will announce the minimum EBI value at
the same time it notifies producers of bid acceptance.
Third, it appears that any cropland near any water body or within
any impaired watershed will receive the maximum number of points. The
concern I have heard expressed is if these points are too easy to
achieve, the effect could be enrollment of many whole fields even
though partial field practice enrollment would be adequate to meet
whatever water quality concerns do exist.
Question. How will the Department determine how much land should be
enrolled to meet a specific water quality objective?
Answer. The EBI is composed of six environmental factors (soil
erosion, water quality, wildlife habitat, long-term retention beyond
the contract period, air quality, and conservation priority area).
Rather than focus on an individual factor, the EBI was constructed to
maximize the environmental benefits of all factors related to cost.
Also, any area offered for CRP will likely contribute multiple
environmental benefits making it difficult to target individual
factors.
The determination of how much land to enroll during the 15th signup
is limited by the authorized program level of 36.4 million acres. It is
impossible to determine, though, the amount of land that will be
accepted until after the end of signup when all offers are evaluated.
Question. Within the water quality scoring system, will maximum
points be given to rare and native habitat and critical areas?
Answer. High priority water quality areas can be designated to
receive an additional 30 points under the water quality factor of the
EBI if the use of CRP will assist in achieving the desired water
quality and habitat protection objectives in a cost-effective manner.
The critical area may contain areas of rare and native habitat which
may be designated by the State technical committee and approved by the
State FSA Committee.
Question. Fourth, will the EBI be applied nationally or regionally?
Answer. The EBI will be applied nationally. Every offer will be
compared against every other offer. Each offer will be ranked and
evaluated and only those offers that provide significant environmental
benefits relative to cost, will be eligible to enroll in CRP. In order
to achieve the goal of maximizing environmental benefits relative to
cost, each offer must be compared to every other offer.
Question. For instance, if a parcel of land in one region of the
country ranks high in comparison to parcels in its region, but less
favorably in comparison to parcels in other regions, how will the
Department evaluate its EBI rating?
Answer. The Department will utilize the actual CRP bid data and
other data sources to evaluate the impacts of the EBI. Utilizing the
bid data, the Department will evaluate the impacts that EBI could have
on land selection for enrollment into the program and the environmental
and program impacts. This data will be available when determining the
weight for the cost component of the EBI.
Question. Fifth, in the three categories being considered in the
EBI (water quality, wildlife habitat and soil erosion) will there be a
minimum threshold in each category for land to be enrolled? For
example, if an application ranks very low in soil erosion and water
quality but very high in wildlife habitat, could it be enrolled in the
CRP only for its wildlife benefits?
Answer. There will be no decision on a minimum EBI threshold until
after the CRP offer data is evaluated. The overall score of all factors
is used to develop the EBI score. It is this score that is used to rank
an offer. An offer that ranks low on one factor (water quality) but
high on the other environmental factors could be enrolled into the
program. Applicants have opportunities to increase their score by
planting better wildlife cover or reducing their bid amount.
To be eligible for enrollment, crop land must have a cropping
history, be physically and legally capable of being cropped in a normal
manner and meet one of the following conditions:
--Have an Erosion Index (EI) of 8 or higher or be considered highly
erodible land according to the conservation compliance
provisions; (Redefined fields must have an EI of 8 or higher)
--Be considered a cropped wetland;
--Be devoted to any of a number of highly beneficial environmental
practices, such as filter strips, riparian buffers, grass
waterways, shelter belts, wellhead protection area, and other
similar practices;
--Be subject to scour erosion;
--Be located in a national or state CRP conservation priority area;
or
--Be cropland associated with or surrounding non-cropped wetlands.
Question. Finally, assuming the Department's goal is to sign-up
36.4 million acres, will the Department reserve a set amount of acres
as a ``future land bank'' for acreage to be enrolled under continuous
sign-up in order to provide the necessary flexibility to conserve land
with high environmental benefits in the future?
Answer. The Department will reserve acreage for continuous signup
and for State Enhancement Programs.
conservation farm option
Question. The new farm bill creates a Conservation Farm Option
which provides for ten-year contracts with farmers utilizing a
combination of land retirement, incentive and cost-share payments to
foster long-term, innovative conservation improvements. This program
holds great promise for encouraging total resource management planning,
alternative farming systems and practices, innovative combinations of
land management improvements and partial field land retirements. It is
my understanding that the program in its first year of implementation
will go out as a request for proposals without the need for formal
rulemaking. What is the current status of the request for proposals?
Answer. The Conservation Farm Option (CFO) request for proposals
for fiscal year 1997 is undergoing final review prior to issuance in
the Federal Register.
Question. When will it be issued and when will the proposals be
due?
Answer. The CFO request for proposals is expected to be published
in the Federal Register by March 31, 1997 subject to approval by OMB.
Proposals will be due on or about May 15, 1997.
Question. Will there be appropriate program information and
technical assistance for groups and individual farmers who may wish to
apply for funds?
Answer. Yes. Appropriate CFO program information will be published
in the Federal register and technical assistance will be available at
the field level for groups and individual farmers who wish to apply.
green mountain national forest
Question. In the Fiscal Year 1997 Omnibus Appropriations Act,
Congress authorized a land exchange between the Green Mountain National
Forest (GMNF) and Sugarbush Resort Holdings, Inc. and allowed the
proceeds of that exchange to be retained by GMNF for purchase of other
lands to be added to the Forest in the future. The land exchange would
have considerable benefits for the GMNF and the public. The GMNF would
be able to acquire lands that are more consistent with the goals of the
management of the GMNF and would provide far greater environmental
benefits than the parcel GMNF would offer to Sugarbush. In addition,
Sugarbush would acquire a 57-acre parking lot from the Forest Service
and be able to provide better skier access and facilities from
Sugarbush Village. The GMNF staff have done an exemplary job in
negotiating and preparing this exchange. At this point in time, all the
details of the exchange have been resolved except one--Departmental
approval of the exchange. Although the appropriations language was
drafted and interpreted to allow the exchange, one technical question
remained involving the establishment of an escrow account. It is my
understanding that this question is being resolved to the satisfaction
of the USDA Office of the General Counsel. I appreciate the cooperation
and hard work on behalf of both agencies to resolve this issue.
Unfortunately, due to the short construction period in Vermont approval
of the exchange is needed in the immediate future. I am confident that
your staff will be able to move this exchange forward with great
efficiency. When can I expect the Forest Service to indicate to the
GMNF that the land exchange is approved?
Answer. The Green Mountain National Forest is moving forward with
the exchange as directed in the legislation. The Forest Supervisor is
prepared to issue a decision on the exchange soon and we anticipate the
first portion of the exchange will be processed by May 1 of this year.
electronic benefit transfer--food stamps
Question. I have favored eliminating the use of paper food stamp
coupons and switching over to an electronic benefit transfer system for
some time. It has been estimated that program losses caused by
diversion of benefits and fraud could be reduced by as much as 80
percent under a national EBT system. USDA spends millions each year
just on printing and distributing coupons that are used once. Would you
support the mandatory elimination of paper food stamp coupons? How is
the Department supporting the adoption of the EBT system in the fiscal
year 1998 Budget?
Answer. The welfare reform legislation enacted last August does, in
effect, mandate the elimination of coupons insofar as it requires full
implementation of EBT by the year 2002. Other provisions of that
legislation serve to promote timely implementation of EBT, including
the exemption of EBT systems from Regulation E requirements.
Currently, EBT is operational in 18 States--Statewide in 8 of these
States---and in various stages of planning and implementation in the
remaining States.
The 1998 Budget supports EBT implementation via sharing the cost
50:50 with the States, under the standard food stamp administrative
cost share formula. In addition, $4.6 million is earmarked for EBT
implementation, less than in prior years reflecting a reduced need for
implementation funding at this stage.
EBT will eventually supplant the cost of the paper food stamp
system--the printing, distribution, and redemption activities--these
costs will all disappear. In their place, the program will incur
greatly reduced costs for card issuance and electronic redemption.
Another advantage, as you point out, is that EBT will help detect and
deter trafficking and some ineligible items purchases. EBT provides an
audit trail making it possible to identify both stores and recipients
that are abusing the program, and to do so at a fraction of the cost of
traditional, labor intensive investigatory activity--which were in many
cases, prohibitively expensive. In fact, EBT has already helped
identify existing fraud--and EBT was at first being blamed for causing
it, rather than getting credit for detecting it. Nonetheless, EBT will
significantly improve program integrity. Until further advances are
made, however, trafficking and ineligible items abuses are still
possible with EBT, they are just harder to do without detection.
rural development initiatives
Question. The 1996 Farm Bill included authorization for a one
hundred million dollar Fund for Rural America. I strongly supported the
establishment of the Fund as a much needed resource for the Department
to support rural development initiatives and research that fall between
the cracks of existing programs. Too often strict regulatory
requirements of narrowly targeted Departmental programs disqualify
innovative projects that could more effectively address the needs of
rural communities.
I was therefore disappointed by the Department's decision to depend
almost all of the rural development allocation on backlogs within
existing rural development programs. I agree completely with the need
to augment fiscal year 1997 funding for rural housing programs t offset
the interest rate assumptions in the bill which would have dramatically
reduced the loan program level. I am also a strong supporter of the
Department's distance learning and water and sewer programs. However,
within the approximately $53.8 million direct to rural development
initiatives, I had hoped to see some commitment to flexible and
innovative approaches to problems facing rural America.
Do you support using the flexibility provided by the Fund for Rural
America to fund initiatives which do no fit within the framework of
existing Department programs, but which might more effectively address
the problems facing rural communities?
Answer. I certainly support more flexible approaches to the
problems of rural America. This is why the Administration strongly
supported the Rural Community Advancement Program (RCAP) which contains
that flexibility. Unfortunately, implementation of RCAP was blocked by
the 1997 Appropriations Act.
The statutes providing for the Fund for Rural America requires the
moneys specifically for rural development be used through existing
programs. We are therefore limited to a certain extent by existing
statutory and regulatory requirements. Additionally, it was the opinion
of many Members of Congress that the funds be used to address the
backlog of applications so prevalent in many of our programs and the
Appropriations Act Conference Report encouraged the Department to use
the funds to address the shortfall in program funding caused by the
difference in interest rates. Therefore, I directed the funds be
utilized to meet the most pressing needs. As you are aware, I also
directed that a portion of the funds, $2.2 million, be used for value-
added cooperative development efforts and I expect some innovative
proposals to come forth from this process. We will be announcing the
availability of these funds in the near future and inviting
applications. I also believe we will see some innovative proposals from
the research component of the Fund for Rural America.
Question. I was also disappointed by the lack of communication
between the Department and Congress regarding the disposition of the
Fund. As an author of the bill which established the Fund I had hoped
to discuss ideas about the Congressional intent behind the program.
Unfortunately that opportunity was not available until the division of
the Fund was finalized.
How do you intend to improve communications between members of this
Committee and the Department to allow input from interested members and
to ensure that detail about how the Fund for Rural America will be used
are available to members well before their publication in the Federal
Register?
Answer. A significant number of the Members of Congress did contact
my office to express their thoughts on how the Fund for Rural America
should be utilized. Those ideas, as well as the thoughts of a number of
others from outside the Department, were considered in the
deliberations on how best to use the funds.
rural fire task force
Question. I would like to thank you for the unflagging support you
have shown for the AmericaCorps program. The initiatives that the
Department has funded in Vermont have improved nutrition services to
children and the elderly, improved trails and recreation in the Green
Mountain national Forest and reduced fire insurance costs for the
hundreds of homeowners touched by the rural Fire Task Force.
While the AmericaCorps direct grant program has ended, the
initiatives the Department helped to establish have not. I have written
to you asking for your assistance in helping those organizations which
wish to continue make the transition from direct Federal assistance.
The Rural Fire Task Force in particular has shown tremendous return in
reductions of fire insurance costs for a minimal investment of Federal
dollars.
Are there existing Department of Agriculture programs the Rural
Fire Task Force could apply to, or funding available within the
Department to ensure that this valuable initiative will continue
despite the loss of the AmeriCorps direct grant program?
Answer. There are three components to the forest service
cooperative fire programs including rural fire prevention and control
(through the Interior Appropriations Committee), the rural development
community fire protection grant funds are passed through to the Forest
Service which in turn funds applications from the State Foresters, and
the Federal excess property programs through the Defense Department. In
addition, there is the rural development community facilities loan
program which finances a significant number of fire protection
projects. I would suggest the Rural Fire Task Force contact the State
Forester and the Rural Development State Director in Vermont and
inquire as to the availability of funds for fiscal year 1997.
empowerment zone/enterprise communities
Question. In 1994 when the first round of rural and urban
Empowerment Zone and Enterprise Communities (EZ/ECs) were chosen, I was
surprised to discover that no Vermont communities were eligible for
consideration as rural Enterprise Communities. This despite the fact
that Vermont is the most rural State in the country based on the 1990
Census. While Vermont does not have the high poverty levels and
unemployment rates the current EZ/EC criteria require, it faces other
hurdles such as higher cost of living, high fuel and heating costs and
high costs for construction of housing and utilities. When take in
combination with the common rural problems of a small tax base and
small, widely separated communities it is clear that Vermont and other
northern states have a need for rural EZ/ECs as the southern states
that this designation has largely been restricted to.
The Administration requested funding in its fiscal year 1997 and
fiscal year 1998 proposed budgets for another round of Enterprise
Communities. I believe that any new round of rural Enterprise
Communities should take into consideration a broader spectrum of
economic indicators to ensure that struggling rural communities in all
parts of the country are eligible to compete.
Question. What are the specific criteria for consideration as a
rural Enterprise Community? How are those criteria scored?
Answer. The criteria in the legislation proposing a second round of
designations is again based on the degree of poverty. Each census tract
in the area seeking designation must have a poverty rate of not less
than 20 percent with at least 90 percent of the census tracts having
poverty rates of not less than 25 percent. The only exception provided
for is that the Secretary of Agriculture may designate not more than
one EZ and not more than 5 EC's that satisfy emigration criteria
developed by the Secretary.
I certainly agree that there are rural areas experiencing economic
problems that are not associated with poverty or unemployment and that
the Federal government needs the flexibility necessary to address those
problems. However, the reasoning behind the EZ/EC legislation is that
traditional approaches to solving these problems have not worked well
in poverty stricken communities and a comprehensive, well-focused
effort is needed to build the economic infrastructure necessary to
reverse the situation. This approach is being proven successful by the
initial round of rural designations.
Question. Are the criteria and scoring for the selection of EZ/EC's
set by law or by Departmental regulation?
Answer. The criteria for designation as an EZ/EC are established in
statute. The criteria for rating and scoring the applications will be
established in regulation.
Question. What steps would be required to modify selection criteria
for rural EZ/EC's?
Answer. Members of Congress will have ample opportunity to review
and modify the legislation as it considered by Congress. Subsequent
regulations will also be available for public comment.
Question. Would you support expanding the criteria for rural EZ/ECs
to address the problems facing rural communities in northern states?
Answer. I would be happy to discuss possible solutions to the
problems facing rural communities in the northern states with you.
______
Questions Submitted by Senator Faircloth
tobacco research
Question. What has been the result of this language on ARS and
CSREES research efforts for the production, processing or marketing of
tobacco or tobacco products?
Answer. ARS terminated its research program on the production,
processing, or marketing of tobacco or tobacco products, and no CSREES
funds have been approved for these purposes. Tobacco research is still
conducted at the State Agricultural Experiment Stations supported by
state or industry funds.
Question. Are there any USDA funds expended for the production,
processing or marketing of tobacco products?
Answer. There are no ARS funds expended for research on the
production, processing, or marketing of tobacco products. CSREES no
longer approves Federally-supported research projects directly dealing
with tobacco production and processing. There are however, some funded
projects using tobacco as a model system for basic genetic and
physiological studies. Research dealing with the health effects of
tobacco use is still permitted.
Question. Has the Department analyzed what the impact of this
language has been on tobacco farmers and tobacco-producing States? I
wish to see any documentation that the Department can provide on this
matter.
Answer. Neither ARS or CSREES has collected information to analyze
the impact of research restriction on tobacco farmers and tobacco-
producing states.
Question. Is it your understanding that this language prohibits any
ARS or CSREES employee at the state level from doing research on
anything to do with tobacco?
Answer. ARS and CSREES employees are not specifically prohibited
from doing research on anything to do with tobacco. In some instances,
research must be performed on plants that are amenable to specific
kinds of manipulations in experiments. Tobacco plants often serve this
purpose, and they are widely used for basic research in plant molecular
biology. Tobacco plants can be regarded as the ``white rat'' of the
plant sciences. Although the objectives of these experiments are not
specifically related to production, processing, or marketing of
tobacco, all crops benefit from the advances of knowledge and direct
applications that might develop from sound basic science.
Question. Is it your understanding that this language would
prohibit any ARS or CSREES employee at the state level from doing
research on alternative uses of tobacco?
Answer. Research on certain alternative uses of tobacco might be
permissible if the research objectives are to improve production
systems for other crops, rather than for the production and processing
of the tobacco crop itself. For example, ARS has in the past conducted
research to identify unique insecticidal compounds from tobacco and
closely related plants, and to learn how to use those natural compounds
for pest control as part of integrated pest management for cotton and
other crops.
Question. Does this language affect any other tobacco program that
falls under the Tobacco Division of USDA?
Answer. There are no other tobacco-related programs in ARS or
CSREES.
______
Questions Submitted by Senator Coverdell
karnal bunt
Question. How much money do you anticipate will be spent by the
Animal and Plant Health Inspection Service (APHIS) this year and next
to enforce any quarantines imposed to prevent the spread of Karnal Bunt
(Kb)?
Answer. In fiscal year 1997, we anticipate spending approximately
$5.6 million on regulatory activities to enforce Karnal Bunt (Kb)
quarantines. Our costs are decreasing as we develop efficiencies in our
quarantine enforcement methods. The budget requests an increase of $4.5
million for pest detection activities in fiscal year 1998 largely for
Karnal Bunt regulatory activities, the National Survey, and to examine
alternative control and eradication measures for Karnal bunt and
potential future infestations.
Question. Do you believe implementing a quarantine in the Southeast
is necessary, in light of the fact you have not found any bunted
kernels?
Answer. We will not take regulatory action in the Southeast unless
proof exists that Karnal Bunt is present. We are examining wheat lots
for bunted kernels and conducting pathogenicity tests with spores
recovered from the Southeast to determine whether there is the presence
of the disease.
Question. In the United States Department of Agriculture's 1998
Budget Summary, there is a request by the Animal and Plant Health
Inspection Service (APHIS) of $9 million for pest detection activities,
a $5 million increase from fiscal year 1997. The stated reason for this
large increase is to enable APHIS to provide assurance to all trade
partners that Karnal Bunt is not present in major wheat-producing areas
of the United States. How can you provide such an assurance if Karnal
Bunt has been detected from coast to coast?
Answer. Since March 1996, we have committed $65 million for program
operations and compensation to producers. With survey data, we can
clearly demonstrate where the disease is and is not. And, it has not
been detected coast to coast. Because of this, we have largely
maintained market access for U.S. wheat from non-infected areas. To
date, negotiations have been successful with several significant
markets, including Germany and Italy.
Question. Which States will this increased money be spent?
Answer. We will spend this increased money in the 42 wheat-
producing States for conducting the National Survey and in the Karnal
Bunt regulated areas which are currently limited to the Southwest.
Question. It is my understanding that Karnal Bunt is a disease
which can not be eradicated. Do you believe that Karnal Bunt can be
eradicated?
Answer. As a regulatory agency, APHIS considers eradication a
reasonable first objective in dealing with a new quarantine pest. When
Karnal Bunt was first detected in March 1996, this position was
strongly supported by various industry groups, State departments of
agriculture, and officials involved in international trade. Presently,
the main goals of the program are to (1) protect U.S. export markets,
(2) protect U.S. wheat producers in Karnal Bunt-free areas, (3) provide
the best possible option for producers in regulated areas, and (4)
maintain the best possible information on where Karnal Bunt is located.
Question. If yes, please explain how? If no, how much will it cost
to continuously implement a quarantine on a disease that can not be
eradicated?
Answer. The management strategy we are currently using against
Karnal Bunt concentrates on minimizing the probability that it will
expand beyond areas where it currently exists and detecting and
identifying it in other areas to which it might have inadvertently been
moved. We expect that this strategy will be sufficient to allow wheat
exports to continue moving.
With a program like Karnal Bunt, where the negative consequences
that affect exports is so great, we feel that regular investment in
enforcement activities are justifiable since these activities would
play a crucial role in protecting export markets. During fiscal year
1997, we plan to spend approximately $5.6 million on enforcement
activities and to conduct the National Survey. Our costs are decreasing
as we develop efficiencies in our quarantine enforcement methods.
Question. Do you believe Karnal Bunt is a major disease threat?
Answer. While there is no human or animal health problem associated
with this plant disease, it is considered a pest of quarantine
significance by more than 30 nations with which the U.S. does business.
In the next few months, APHIS will be addressing this issue at an
international forum in an attempt to create a better understanding of
this disease within the international agricultural community.
Question. If APHIS found Karnal Bunt spores or Karnal Bunt in the
Midwest, would that change your opinion?
Answer. Well, if Karnal Bunt spores were found in the Midwest, we
would have a much more serious problem with the export market. As a
result, we would have to change our program strategy since we would no
longer meet our goals of protecting U.S. export markets or of
protecting U.S. wheat producers in Karnal Bunt-free areas.
Currently, exports are not significantly affected. Only three
percent of U.S. wheat is located in Arizona. We are able to certify
wheat for export by demonstrating that over 90 percent of U.S. wheat
originates in areas where Karnal Bunt is not known to be present and we
have seen relatively normal movements of wheat exports since the
beginning of our program.
Question. Since a quarantine was imposed in the Southwest, what
have the economic losses been for farmers?
Answer. For the 1996 crops, we estimated the losses for
compensation to be $39 million.
Question. It is my understanding that you plan on compensating
farmers affected by any quarantine imposed to prevent the spread of
Karnal Bunt. How much do you anticipate this will cost?
Answer. For the 1997 crops, we estimate the losses to be
significantly reduced because of the actions which were already taken
in the regulated areas and the knowledge gained from the National
Survey. At this time, we estimate the losses at no more than $10
million.
Question. Who will be eligible?
Answer. If regulations are necessary for the 1997 crop,
compensation will be provided to producers and handlers of regulated
wheat, and owners of grain storage facilities which require
decontamination.
Question. Is this included in your budget request for fiscal year
1998?
Answer. At this time, we have no way of projecting whether
additional Karnal Bunt areas will be identified for the 1998 crop. The
increase of $4.5 million included in the fiscal year 1998 Budget for
pest detection is primarily for Karnal Bunt regulatory activities and
to conduct the National Survey.
Question. Are there plans by you or the Administration to work with
other nations to have the status of Karnal Bunt changed from a major to
minor disease threat?
Answer. We have initiated plans for an international conference
this summer to consider whether the status of Karnal Bunt should be
changed. By that time, APHIS will have the results from pathogenicity
tests performed on spore samples from the southeastern United States.
We will be asking Mexico and Canada to sponsor the conference, possibly
through the auspices of the North American Plant Pathology Organization
(KNOOP). Hopefully, this conference will provide all countries the
opportunity to review the available data and create rational and
objective standards for the international movement of grains affected
by various smut diseases. The suggested conference title is, ``The
International Conference on Regulatory Issues Related to Smut in Small
Grains in the United States''.
Question. If Karnal Bunt is found in the Midwest, would your answer
change?
Answer. No, it would not.
Question. What increased costs do you anticipate for farmers if
there is a quarantine imposed in the Southeast?
Answer. If regulations are necessary, we have estimated the
additional needs for compensation to be $6.4 million.
Question. How will this affect peanuts, vidalia onions, cotton, and
other major crops in the Southeast?
Answer. Field-packed nuts and vegetables that meet normal industry
standards for cleanliness are not considered to be contaminated. If we
find a bunted kernel in a field that is double-cropped, we would place
restrictions only on soil movement. The term ``soil'' generally refers
to large clumps or clods; dust or road film is not considered to be
soil. Cotton harvesting would not be affected.
Question. What will be the economic losses for farmers in the
Southeast?
Answer. If regulations are necessary, our estimate of the losses to
be compensated is about $6.4 million.
Question. Does the U.S. Department of Agriculture regulate suspect
spores?
Answer. No regulatory action will be taken until clear evidence
exists that the disease is present.
Question. What is the reliability of the spore identification
techniques and can your current DNA test differentiate between Karnal
Bunt spores and spores from fungi present on weedy and cultivated
grasses found in the Southeast?
Answer. APHIS' test procedures provide a reasonable assurance that
spore counts of one or more in a 50-gram sample, from a railcar or
elevator, will be detected. Spore counts which average less than one
per 50 grams may not be detected. APHIS policy accepts the negligible
risk of spread of the disease posed by such spore counts.
Current DNA testing does not distinguish between Kb spores and
ryegrass spores. The pathogenicity tests underway are designed to
determine if the ryegrass pathogen infects wheat. And, we are
developing other tests to distinguish the two pathogens based on
physical and chemical properties.
Subcommittee Recess
Senator Cochran. The next hearing of this subcommittee will
be on Tuesday, March 4, at 10 a.m. in this room, 124, of the
Dirksen Senate Office Building. We will hear at that time from
the Department's witnesses on the budget request regarding food
safety, marketing, and regulatory programs. Until then, the
subcommittee stands in recess.
[Whereupon, at 12:35 p.m., Thursday, February 27, the
subcommittee was recessed, to reconvene at 10:08 a.m., Tuesday,
March 4.]
AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR
FISCAL YEAR 1998
----------
TUESDAY, MARCH 4, 1997
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:08 a.m., in room SD-124, Dirksen
Senate Office Building, Hon. Thad Cochran (chairman) presiding.
Present: Senators Cochran, Burns, and Bumpers.
DEPARTMENT OF AGRICULTURE
STATEMENT OF MICHAEL DUNN, ASSISTANT SECRETARY,
MARKETING AND REGULATORY PROGRAMS
ACCOMPANIED BY DENNIS KAPLAN, DEPUTY DIRECTOR, OFFICE OF BUDGET AND
PROGRAM ANALYSIS
Animal and Plant Health Inspection Service
STATEMENT OF TERRY MEDLEY, ADMINISTRATOR
Agricultural Marketing Service
STATEMENT OF LON HATAMIYA, ADMINISTRATOR
Grain Inspection, Packers and Stockyards Administration
STATEMENT OF JAMES R. BAKER, ADMINISTRATOR
Food Safety and Inspection Service
STATEMENT OF THOMAS J. BILLY, ADMINISTRATOR
ACCOMPANIED BY DR. CRAIG REED
Opening Remarks
Senator Cochran. The subcommittee will please come to
order.
This morning we are very happy to welcome our panel of
witnesses to discuss the proposed budget for the Department of
Agriculture as it relates to the Food Safety and Inspection
Service; the Animal and Plant Health Inspection Service; the
Agricultural Marketing Service; and the Grain Inspection,
Packers and Stockyards Administration.
We are happy to have with us Assistant Secretary for
Marketing and Regulatory Programs Michael Dunn. We welcome you
and your colleagues, the Administrators of these programs which
I mentioned. We also welcome Mr. Kaplan from the Budget Office
of the Department of Agriculture.
Mr. Secretary, we have copies of your statements and we
will make them all a part of the record. But before proceeding
any further, I'm going to see if my colleagues have any opening
comments or statements they would like to make.
Senator Burns.
STATEMENT OF SENATOR BURNS
Senator Burns. Thank you, Mr. Chairman. I have just a
couple of comments, but I think it would be better if my
statement just be entered in the record.
I still have some concerns about Mr. Billy and some of the
concerns we have on the border of meat inspections coming in
from Canada. I would hope that we could maybe lay aside some
fears that we have in the State of Montana.
Anytime we start talking about food inspection and food
safety, we know that part of the problem in the Northwest with
the Jack-in-the-Box situation was not created by American
producers.
I am concerned about how we are moving more to a fee
situation with our inspection service. Food safety is
everybody's problem, and we know who will pay the fees for
inspection. It will be the producer. That will be one of the
expenses that has to be incurred by a processing plant whenever
they start buying and paying for the raw product. They will
take it off of the purchase price. I said this the last time.
Anybody that does not believe that we in agriculture do not
live at the end of the railroad where we buy retail and sell
wholesale and we pay the freight both ways and all the fees
that are incurred has never experienced being raised on 160
acres of two rocks and one dirt like I have been.
So, we understand those.
Mr. Baker, I see you today and I want to congratulate you
on what you have done in your Department. I think you have
brought a lot of credibility. And P&S, maybe it ain't working
as smooth as we would like to see it in some places, but I
think you have done a great job there and I want to commend you
for that.
Other than that, I would just put my statement in the
record, Mr. Chairman, and thank you for holding this hearing.
Prepared Statements
Senator Cochran. Thank you, Senator Burns.
Senator Bumpers. Mr. Chairman, I have a statement I'll put
in the record.
Senator Cochran. Without objection, the statements will be
made a part of the record.
[The statements follow:]
Prepared Statement of Senator Burns
Thank you, Mr. Chairman.
I would like to welcome the Assistant Secretary and the Agency
Administrators to the committee hearing today. In an attempt to get the
input we all seek I will try to keep my statement as short as possible.
This should provide us with the time we need to hear testimony from
these people and learn more about the budget proposal put forth by the
Department of Agriculture and the Administration.
I would like to address my issues as they appear to us in the list
of witnesses appearing before the committee today. With this I will
start with the Administrator of the Food Safety and Inspection Service.
Mr. Billy, I must say coming from a state with little or no poultry
production, and from a state that shares a border with our neighbors to
the north, that I cannot see the workings of a partnership between
Congress and the Food Safety and Inspection Service. I can also see
that, with the most recent lawsuit filed by the state of Ohio against
the Federal government that this partnership does not seem to be
working as well as you are describing here today. I also have to say
that the cooperation does not seem to be as clear to the producers and
consumers in the field. I will commend you and your agency for going
out into the field to get an understanding of what those packing houses
of a smaller size are facing, but I do not believe that you have
alleviated all the fears that these people have about staying in
business.
As with the general Department budget, I am concerned about the
number of employees that you are taking out of the field. It appears to
me that we continue to reduce those jobs in the field that mean most to
our smaller communities and provide the real work in this government.
I also have fears about the changes that are being proposed in
regulatory form. I agree with you that the basic goal of FSIS should be
the improvement of the safety of our food sources. But the clear, sharp
and precise fact we see, is that if somebody gets ill from food borne
pathogens, then it is always related to our own American products. Not
the meat and vegetables we see coming in from other countries. Our
producers in Montana, Mississippi, Missouri, Washington, Arkansas and
Wisconsin take the hit in the public eye.
Mr. Billy, I hope that in your position you can and will continue
to work to form the partnerships that you have mentioned in your
testimony today. With this partnership comes much work and even
heartbreaks at times, but it is what the people in America seek from
government, and it is my hope that you can work out the many
particulars which are required in this close working relationship.
Mr. Chairman I would also like to welcome Assistant Secretary Mike
Dunn and the Administrators of the Animal Plant Health Inspection
Service, Agricultural Marketing Service and the Grain Inspection
Packers and Stockyards Administration to this hearing. These are all
good people I am willing to put my faith in as they work for the future
of American agriculture.
It wasn't even a week ago that I met with the Assistant Secretary
and the APHIS Administrator along with Secretary Glickman to discuss a
very important issue in Montana, Bison. I was pleased to see how far
the Department of Agriculture has come in the past two years, but still
am disappointed in the current state of the Yellowstone bison herd. I
appreciate the way you came to the table with some suggestions which I
hope the Secretary of the Interior will open his mind too in the coming
months.
There are a few issues of concern I have with the budget proposal
coming out of Marketing and Regulatory Programs. First among these in
my state is the issue of the reduced funding in the Animal Damage
Control budget. I understand that according to your testimony Mr.
Secretary that you feel that this is in response to the wishes of
Congress. Well I can guarantee you that this is not among the wishes of
this member of Congress. Approximately two years ago, Secretary Babbitt
found it necessary to introduce a predator into Yellowstone National
Park, the Canadian wolf. With this action he placed a predator on the
ground that preys upon the livestock in Montana. This is bad enough,
for the controls are rigid in defending one's property. But add to this
the increased numbers of coyotes in western states and you have a
serious problem.
The problem we face is that due to the wolf ADC, is unable to do
the work necessary to provide protection for the livestock producers in
Montana. The real problem will be down the road however, because
without ADC workers and control, the people will begin to take the law
and the necessary steps for protection into their own hands. The
results of this of course will be the criminal prosecution for a number
of people only trying to protect what is theirs.
When we talk about the needs on the ground today, one of the main
areas of interest that all of us in the west share, is the need for
effective work in the area of packers and stockyards. As we have seen
in the past two years, this has been a high point of interest with all
members of Congress in the west. We have discussed and we have
bargained and we have read the reports, but the basic premise which is
on the ground is that the packers are taking advantage of the producer.
Now this is not something that is new, it goes on in all commodities
and with all manners of livestock, but the fact is the people have a
lack of confidence in the government to do something. I have the utmost
faith and confidence in the Administrator of the agency, but he really
needs the help of the Department and this Congress to do an effective
job.
I do not have the answer in my hip pocket to the problems we face
in this area, but I do know we do need to work with Mr. Baker to see
that he can and does get the most bang for the dollar. I look forward
to sitting down with him in the near future to discuss many of the
concerns we share with the current system, and what Congress can do to
assist him.
Finally, I have real problems with the inclusion of the large
numbers and the amounts sought to be generated by the user fees in this
budget. I do not think that this is the really fair approach to the
funding needs of this Department. I believe the Administration and the
Department is falling into the same mind set as the majority of our
country is, that they see the Ag budget and figure it all goes to the
farmers and ranchers. Well we see numerous dollars, over half of the Ag
budget I believe, going to programs of a social nature. Food Stamps,
and WIC are among these. I do not want to see the poor and the needy in
our land suffer any more than anyone at this table, but let's be honest
when we are dealing with the taxpayer's funds.
The imposition of the user fees is just another tax on the people
in rural America, and they are not in a much better position to afford
than many of the people that live in our cities. These people toil day
in and day out for the tax dollars they put into the treasury of this
land, and now we are asking them to pay more for services that they
really feel that they have paid for with their original tax payment.
I know in Montana we don't have the great need for mass transit
that we find here on the east coast and in our nation's capital. But we
do have the need for the services provided by APHIS, AMS and GIPSA.
These are what we like to think we pay our tax dollars for. Now this
Administration and the Department have made a move, which I believe we
have fought in the past, to pass additional costs onto our producers.
As I mentioned to Secretary Glickman last Thursday before this
committee, these costs are not going to be borne by the consumer, they
are reflected directly in the price which is paid to the producer for
the food and fiber they provide this country. At this time I do not
know where I will make up the difference, but I will work hard to
protect my agricultural producers in Montana and throughout this
country against this tax plan by the Administration.
Mr. Chairman, I really wanted to keep this short and sweet and to
the point, but agriculture is still the number one industry in Montana
and I need to make my feelings known on a variety of topics which this
hearing allows me to address. I am sure I will need to address many of
these again down the road, but I need to make my intentions known. I
thank you, Mr. Chairman for the time, and I look forward to hearing
from the panel today.
______
Prepared Statement of Senator Bumpers
I wish to join Senator Cochran in welcoming our guests from the
U.S. Department of Agriculture who appear before us this morning.
Agencies of the Department of Agriculture have jurisdiction over a vast
array of services and obligations. However, within the purview of all
those agencies there may be no others that hold the high level of
responsibility for protecting the continued health and safety of
agriculture and the ultimate consumer of all that agriculture may
produce than those collected here today.
We all recall from history, nearly 100 years ago, how President
Theodore Roosevelt having just completed reading Sinclair Lewis' The
Jungle, tossed his breakfast out the window when placed before him.
Reminded of and revolted by the imagery of Lewis' masterpiece, wound
too much in fact for comfort, President Roosevelt reportedly stormed
from the room to begin work toward passage of legislation that led to
the creation of the Food Safety and Inspection Service. Whether it is
to the writing skills of Lewis or the ill-served breakfast of a
President, we all owe a great deal of gratitude.
As much as we think we know about how to protect our crops and
livestock from pests and disease, truth is we live in a very dynamic
world where new threats to agricultural stability appear to be in a
constant state of introduction to our shores. Problems we never thought
we might see, such as Karnal Bunt, and hopefully never will see, such
as Bovine Spongiform Encephalopathy (Mad Cow Disease), remind us we
must be ever vigil in the protection of our productive capabilities and
consumer confidence in those products. In some cases, introduction of
serious pests, such as the Imported Fire Ant or the Zebra Mussel, are
inadvertent. Still, that does not reduce our responsibilities in
removing these threats from the public domain.
Aside from pathogens, insects, diseases, and other adversaries of
nature, we must also guard against the unwise use of chemicals as
methods of control. Pesticides have helped American Agriculture produce
bountiful and hardy foods and certainly rank among those items we
regard as the arsenal of the agricultural revolution. These products
remain important for continued production and we are learning more
about proper means of application. We must continue to learn more about
how to ensure our food is safe from all forms of harm.
American agriculture is as dynamic as the forces of life itself.
New forms and presentation of products, such as organics, cater to the
ever changing demands of the public. Growth and changes in the
livestock sector remind us to ensure that the benefits of growth accrue
to all. A safe and healthy agriculture, and a safe and healthy world of
consumers can feel secure that there are those at USDA charged with the
duty to see that these dynamic forces remain positive.
The budget before us presents certain challenges. We are here to
discuss the range of priorities, areas in which attention should
decline or increase, and the manner in which some of these services
should be paid. In some cases, we might even need to find agreement on
who the actual beneficiary may be. But regardless of the points of
detail, I believe we can all agree that the work before us is serious
and touches on levels of safety no one here is willing to reduce even
slightly.
Statement of Michael Dunn
Senator Cochran. Mr. Secretary, why don't you proceed and
make whatever comments or statements that you think would be
helpful for the committee.
Mr. Dunn. Thank you, Mr. Chairman. I thank you and members
of the committee. I am pleased to appear before you today to
discuss the activities of marketing and regulatory programs at
the U.S. Department of Agriculture for fiscal year 1998.
I have a written statement and would like that to be made
part of the record.
Senator Cochran. Without objection, it is so ordered.
Mr. Dunn. With me today are Terry Medley, Administrator for
the Animal and Plant Health Inspection Service; Lon Hatamiya,
Administrator for the Agricultural Marketing Service; and James
Baker, Administrator for the Grain Inspection, Packers and
Stockyards Administration. They have written statements for the
record and will answer questions regarding the specific
proposals.
The Marketing and Regulatory Program activities are funded
by both the taxpayers and beneficiaries of program services.
The programs are proposed to carry out $789 million of
activities. Over $396 million of that will be funded through
fees from beneficiaries of these services. Currently over 58
percent of the Department's user fee programs are administered
by marketing and regulatory programs. These programs have been
marketed, tested, and are high performers under the Government
Performance and Results Act.
The fiscal year 1998 budget on the discretionary side, we
request a current law appropriation of $431 million for APHIS,
$51 million for the Agricultural Marketing Service, and $25.7
million for the Grain Inspection, Packers and Stockyards
Administration.
Legislation will be submitted to cover $28 million more in
user fees. The budget proposes new fees to recover the cost of
administering programs in all three of the agencies.
APHIS provides leadership in anticipating and responding to
issues involving animal and plant health, conflicts with
wildlife, environmental stewardship, and animal well-being.
The APHIS 1998 budget request proposes under current law
$424 million for salaries and expenses compared to fiscal year
1997 appropriations of $435 million.
The budget request contains an increase of $1.3 million for
the Agricultural Quarantine Inspection Program to handle the
increased workload along the Mexican and Canadian borders and
from Hawaii and Puerto Rico.
Approximately $9 million are requested for increased pest
detection activities and will be largely devoted toward the
Karnal bunt program.
The budget proposes a decrease of $3.3 million for animal
damage control.
APHIS will conduct architectural and engineering work with
carryover money funded by the screwworm program for a sterile
screwworm rearing facility to be built in Panama. Legislation
will be proposed to cover the costs of providing activities for
animal welfare, veterinary biologics, pink bollworm,
biotechnology, and the swine health protection program. We
believe that the identifiable beneficiaries of these Federal
programs, rather than the general taxpayer, should pay for the
services they receive.
An appropriation of $3.2 million is proposed to complement
the Agricultural Research Service's request for modernization
of the Plum Island Animal Disease Center and $4.0 million for
basic facility repairs, alterations and preventive maintenance.
Agricultural Marketing Service's fundamental mission is to
facilitate the strategic marketing of agricultural products in
domestic and international markets while ensuring fair trade
practices and promoting a competitive and efficient marketplace
to benefit consumers of U.S. food and fiber products.
In response to the changing needs of its customers, the AMS
has improved program delivery and broadened the focus of
programs to incorporate a global approach to marketing
services. The Market News reports are nearly 700 reports on a
daily basis available on the Internet.
In response to recommendations made by the Advisory
Committee on Agricultural Concentration, AMS broadened the
scope of market news to include more information about cattle
traded under contract or formula, value-based pricing, and
regional market forces. These actions have given our farmers
and ranchers more tools to compete in today's marketplace which
relies on timely and accurate market information.
AMS's budget request under current law for fiscal year 1998
is $49.8 million for the Marketing Service Program and $1.2
million for the Federal-State Marketing Improvement Program. We
are requesting an increase of $320,000 to begin marketing news
collection in South and Central America and the Pacific rim.
Market surveys conducted by AMS for these areas are needed as
international competitions increase in the post-GATT and NAFTA
economy.
We are also requesting an increase of $500,000 to expand
domestic market news reporting in accordance with
recommendations made by the Secretary's Advisory Committee on
Agricultural Concentration.
We are working diligently to publish a rule on the national
organic standards and to implement a national program. In order
to meet the increased responsibility for accrediting organic
certifiers and administering the program, the AMS budget
includes an increase of $505,000. Consistent with the National
Organic Standards Act, we will seek to recover the cost of the
program through user fees that will be deposited into the
Treasury.
The budget also proposes to return program funding for the
Pesticide Data Program to AMS from the Environmental Protection
Agency. With the implementation of the Food Quality Protection
Act, the pesticide residue data will play a critical role in
conducting risk assessments of re-registration of pesticides.
Finally I want to discuss GIPSA. Its mission is to
facilitate the marketing of livestock, poultry, meat, cereals,
oilseeds, and related agricultural products, and to promote
fair and competitive trading practices for the overall benefit
of consumers in American agriculture.
Federal grain personnel work with over 2,000 State and
private inspectors to provide highly qualified inspection and
weighing services on a user-fee basis. In 1996 this unique mix
of Federal, State, and private inspection agencies provided 2.3
million inspections on an estimated 250 million metric tons of
grains and oilseeds, issued 118,000 official weight
certificates, and weighed over 114 million metric tons of
grain, and met with trade teams representing 41 countries
around the world.
GIPSA's Packers and Stockyards is located in 11 offices
throughout the United States to monitor compliance with the
Packers and Stockyards Act with approximately $95 billion of
livestock, meat, and poultry products.
During fiscal year 1996, GIPSA targeted resources at
providing financial protection, promoting fair business action,
and enabling a competitive marketing environment for livestock,
meat, and poultry.
GIPSA's 1998 budget request under current law is $68.8
million, of which $25.7 million represents appropriated funds.
The remaining $43.1 million represents user fee authority for
grain inspectors and weighing services.
The fiscal year 1998 budget proposes legislation to
authorize, subject to appropriations, the collection of $3.6
million in additional user fees to cover the costs of grain
standardization activities. The grain industry is the primary
beneficiary of the grain standards and should pay for these
services.
For P&S programs, the budget proposes $14.8 million which
includes increases of $225,000 to allow GIPSA to establish
electronic filing procedures for annual reports, $1.6 million
for activities in the packer competition and industry structure
areas, and $750,000 for poultry compliance activities.
Increasing concentration, structural change, declining
market performance, and the increased use of complex formula
and value-based marketing systems by packers continue to raise
questions of regulatory and policy significance. Additional
resources will allow GIPSA to expand its monitoring and
investigations regarding the anticompetitive implications of
structural change and behavioral practices in the meat packing
industry and will afford us an increased capability to support
legal actions that require complex economic and statistical
analyses.
Finally, the fiscal year 1998 budget proposes legislation
to authorize the collection of license fees to administer the
activities under the P&S Act. All meatpackers, live poultry
dealers, stockyard owners, market agencies, and dealers, as
defined in the P&S Act, would be subject to license fees.
Also included is a legislative proposal regarding a
statutory dealer trust to require livestock inventories and
accounts receivable due from sales of livestock to be held in
trust for unpaid cash sellers when a dealer fails to pay for
livestock.
I appreciate the opportunity to present the budget for
marketing and regulatory programs. We believe the proposed
funding amounts and sources of funding will provide the level
of service wanted by our customers: the agricultural producing
and marketing industry, consumers, and the general public. We
are happy to answer any questions.
Prepared Statements
Senator Cochran. Thank you very much, Mr. Secretary. We
have your complete statement, and it will be made part of the
record along with the statements of Mr. Medley, Mr. Hatamiya,
and Mr. Baker.
[The statements follow:]
Prepared Statement of Michael Dunn
Mr. Chairman and members of the Committee, I am pleased to appear
before you to discuss the activities of the Marketing and Regulatory
Programs of the U.S. Department of Agriculture and to present our
fiscal year 1998 budget proposals.
With me today are Terry Medley, Administrator of the Animal and
Plant Health Inspection Service, Lon Hatamiya, Administrator of the
Agricultural Marketing Service, and James Baker, Administrator of the
Grain Inspection, Packers and Stockyards Administration. They have
statements for the record and will answer questions regarding specific
budget proposals.
marketing and regulatory programs
The mission of the Marketing and Regulatory Programs is to
facilitate the domestic and international marketing of U.S.
agricultural products and to ensure the health and care of animals and
plants while improving market competitiveness and the economy for the
overall benefit of both consumers and American agriculture. We
contribute to all four fundamental themes underpinning the Department's
budget proposals for 1998. We have activities to: expand agricultural
economic and trade opportunities; ensure a healthy, safe, affordable
food supply; manage our natural resources in a sensible way; and,
reinvent government and save taxpayers money.
The Marketing and Regulatory Program activities are funded by both
the taxpayers and beneficiaries of program services. The programs are
proposed to carry-out $789 million of activity. Over $396 million will
be funded through user fees from beneficiaries of these services.
Currently, over 58 percent of the Department's user fee programs are
administered by the Marketing and Regulatory Programs. These programs
have been market tested and should be high performers under the
Government Performance and Results Act.
Fiscal Year 1998 Budget
On the discretionary side, we are requesting a current law
appropriation of $431.7 million for the Animal and Plant Health
Inspection Service; $51.0 million for the Agricultural Marketing
Service; and $25.7 million for the Grain Inspection, Packers and
Stockyards Administration. Legislation will be submitted to recover $28
million more in user fees. The budget proposes new license fees to
recover the cost of administering the Packers and Stockyards Act (P&S
Act), additional fees for selected APHIS activities, and for developing
grain standards. In addition, on the mandatory side, nearly $11 million
in user fees would be collected to finance the Federal oversight of
marketing agreements and orders. I will use the remainder of my time to
highlight the Department's budget requests for the Marketing and
Regulatory Programs.
animal and plant health inspection service
APHIS provides leadership in anticipating and responding to issues
involving animal and plant health, conflicts with wildlife,
environmental stewardship, and animal well-being. With its customers
and stakeholders, APHIS promotes the health of animal and plant
resources by facilitating their movement in the global marketplace.
These efforts help ensure abundant agricultural products and services
for U.S. consumers, and expand export markets for our farmers.
The responsibilities of APHIS have grown as agricultural markets
have embraced the challenges and opportunities of global trade.
Protection of U.S. agriculture was previously accomplished by excluding
imports from countries which might have foreign pests and diseases. The
development of new ``rules'' of trade through GATT, NAFTA, and other
agreements now must address sanitary and phytosanitary barriers based
upon risk assessment procedures, regionalization and equivalence.
Ensuring access to foreign markets has become more complicated and is a
critical component of protecting U.S. agriculture. For example, the
dynamic biology and epidemiology of animal and plant pests and diseases
such as Karnal bunt, vesicular stomatitis, and fruit flies, all
represent risks to U.S. agriculture's productivity and access to
foreign markets. But, these risks can be ameliorated with adequate
prevention, monitoring systems and response actions. APHIS is ready to
meet the opportunity and challenge to develop new partnerships with
States, industry, and the public.
APHIS Priorities
Protecting American producers from harmful pests and diseases.--
APHIS has inspectors at international ports of entry--including land
border ports, airports, and seaports--around the clock. Last fiscal
year, they conducted over 77 million inspections and intercepted
approximately 1.9 million illegal agricultural products. Seizures of
contraband prevented the introduction of nearly 56,000 plant pests that
could have been dangerous to U.S. agriculture and more than 290,000
lots of unauthorized meat and animal byproducts that could have had the
potential to spread health threats. If there were outbreaks of foot-
and-mouth disease, exotic Newcastle disease, or hog cholera, they could
have had an overwhelmingly negative impact on the $186 billion in
annual cash receipts from agricultural products.
One of the most visible and successful port of entry inspection
efforts is the Beagle Brigade program. Inspectors use specially trained
beagles at 20 international airports to detect prohibited fruits,
plants, and meat. The beagles identified 73,751 instances of illegal
contraband in 1996 and can detect agricultural contraband about 90
percent of the time.
Facilitating trade.--With survey data, we are able to demonstrate
where diseases exist and where it does not exist. Because of these
data, we have maintained nearly 99 percent of the $6 billion wheat
export market. Most countries have continued to accept our export
certificates and we have met with others to negotiate their acceptance
of wheat from regulated areas that test negative for Karnal bunt. We
have negotiated successfully with several significant markets,
including Germany and Italy.
One of the many new markets we have helped open has been pork to
Russia. Since 1993, producers have shipped more than $30 million worth
of pork, making Russia a valuable market for U.S. farmers. We have also
opened new export markets in both China and Japan for U.S. apples.
Industry officials have estimated these markets will mean hundreds of
millions of dollars of income for U.S. farmers.
Behind the scenes, we help farmers maintain access to international
markets by providing foreign governments with up-to-date scientific
information on the status of U.S. plant and animal health. For
instance, we have worked to keep the Korean market for cowhide at more
than $700 million--making it the largest agricultural export to Korea.
In addition, we negotiated the sanitary requirements with Russian
officials that allowed the resumption of U.S. poultry exports to
Russia. Through these successful efforts, we maintained access to
Russia's $500 to $700 million market for U.S. poultry.
We also certify U.S. agricultural products for export to ensure
that our trading partner's plant and animal health requirements are
being met. In fiscal year 1996, about 279,000 Federal certificates were
issued for plant products alone and another 527,000 ruminants and
horses were certified for shipment to foreign destinations. We issue
these certificates on demand--including evenings, weekends, and
holidays--on a user-fee basis. These fees help us reduce the Federal
Government's costs to taxpayers by charging the cost of providing these
services to the direct beneficiary.
APHIS has proposed a rule setting up the regionalization framework.
Under regionalization, countries would recognize pest and disease
status on an area or regional--rather than national--basis. A region's
risk-class levels--ranging from ``negligible risk'' to ``very high or
unknown risk''--would depend on the region's geographic location;
environmental conditions; prevalence of diseases; type of commodity;
country's animal health infrastructure with regard to its disease
monitoring, surveillance systems, and its level of enforcement to
contain diseases and pests. Canada has already made the commitment to
regionalization by accepting parts of the United States as free of
bluetongue disease. The European Community is considering doing the
same. We hope to move forward with regionalization and join these
countries on this new frontier of agricultural trade.
Monitoring animal and plant health.--Our National Animal Health
Monitoring System--or NAHMS program--surveys the Nation's livestock and
poultry herds to systematically establish a baseline measure of U.S.
livestock and poultry health. By sampling animals at slaughter, we are
advancing our surveillance goals to detect, isolate, and eradicate
diseases like brucellosis and tuberculosis. As you know, we have been
taking actions to prevent the introduction of Bovine Spongiform
Encephalopathy (BSE) since the late 1980's.
For plant pests, APHIS and cooperators in the Cooperative
Agricultural Pest Survey (CAPS) conduct detection surveys for incipient
infestations of exotic pests. These data provide Federal and State
officials, and the private sector, with information used to manage
cooperative pest control programs. APHIS used the CAPS network to
implement the National Survey for Karnal bunt and the emergency
response after the detection of the pathogen that causes the disease in
Arizona in March 1996. The data gathered through these pest surveys
enabled the Agency to continue certifying wheat for export subsequent
to the 1996 detection.
The Internet enables us to quickly and efficiently reach our
customers. For example, a sheep producer in North Dakota can use the
information superhighway to access our interactive database and get
information regarding the voluntary scrapie certification program. A
poultry producer in Georgia can visit the APHIS home-page to review
regulations, search for emergency bulletins, and find current export
health requirements. And, a cattle rancher in New Mexico or a dairy
herd owner in Ohio can locate information about national trends
collected by our National Animal Health Monitoring System.
Our scientists at the National Veterinary Services Laboratories in
Ames, Iowa, strive to identify and improve the diagnostic kits and
procedures used to test livestock and poultry. One such advance
included a more accurate method of distinguishing the hog cholera virus
from a similar virus that causes bovine viral diarrhea. Another
involved molecular techniques to distinguish pathogenic from
nonpathogenic strains of avian influenza (AI). Scientists used this
latter test two years ago in California to confirm a potentially deadly
strain of AI in shipment of birds. That shipment was denied entry and
we prevented millions of dollars of potential losses.
Last August, exotic Newcastle disease was detected in the United
States at a pet bird facility in Missouri. An early response team
worked with State officials and traced the incident to smuggled birds.
Through quarantines and testing they eliminated the risk to our
commercial poultry industry.
Reducing the impact of existing pests and diseases on U.S.
agriculture.--The Animal Damage Control (ADC) program minimizes the
effects of wildlife on livestock and crops and protects human health
and safety from wildlife damage. Recent surveys indicate that predators
have killed 96,200 calves and 21,200 adult cattle valued at $39.5
million annually. Coyotes and dogs continued to be the largest
predators of cattle. Bird and other wildlife strikes are a serious
economic and safety problem for aircraft in the United States. The
National Wildlife Research Center, working with the Federal Aviation
Administration (FAA), found that 2,220 strikes to civilian aircraft
mostly by gulls and waterfowl occurred in 1994. Losses from strikes to
U.S. military aircraft are estimated to average $112 million per year;
a similar loss occurs for civilian aircraft. ADC provided assistance to
340 airports regarding appropriate control programs to minimize
wildlife hazards in 1996.
We have reached a major milestone in the Cooperative State-Federal
Brucellosis Rapid Completion Plan by bringing the total number of
quarantined herds in the United States down to a record low of 32 as of
December 31, 1996. This tremendous achievement points towards
eliminating this disease by the end of fiscal year 1998. Significant
progress is being made also toward the final eradication of bovine
tuberculosis. Currently, 44 states are accredited free, and six States
are in a modified accredited status. One of our proudest achievements
in the eradication program has been the significant decrease in the
number of Mexican-origin cattle identified with tuberculous at
slaughter. APHIS has the infrastructure, statutory authorities, and
operational and technical expertise for managing a wide range of pest
and disease activities which include grasshopper, noxious weeds, boll
weevil, biocontrol, and pink bollworm.
Being the Federal leader of animal care and horse protection.--Many
citizens have recently expressed concern about the care and handling of
wildlife in captivity; particularly those used for exhibition in zoos
and circuses. We have developed regulatory proposals regarding the
treatment and training requirements for elephants and other dangerous
exotic animals. In looking for ways to improve our enforcement efforts,
we seek cooperation with our partners to carry out our regulatory
responsibilities effectively. For example, APHIS recently signed a
Memorandum of Understanding with the State of Missouri to share
information on Animal Welfare Act (AWA) inspections. We are also
continuing to pursue augmentation of our AWA enforcement authority. For
instance, we are looking at ways of increasing our authority to refuse
licenses to individuals not in compliance with the AWA--or anyone
convicted of violating any Federal, State, or local animal welfare law.
In our efforts to improve enforcement of the Horse Protection Act
(HPA), APHIS officials depend on individuals certified through the
Designated Qualified Persons (DQP) program to assist in monitoring
horse shows for compliance.
Developing new or improved methods based on science.--The National
Wildlife Research Center has made significant progress toward
developing immunocontraceptive vaccines for non-lethal wildlife damage
management. In the biotechnology field, after extensive review to
assure minimal risk, APHIS deregulated seven new plant varieties. They
are: herbicide tolerant cotton; male sterile and herbicide tolerant
corn; tomato altered for fruit ripening; Colorado potato beetle
resistant potato; virus resistant squash; herbicide tolerant soybean;
and virus resistant papaya. These new technologies are important
advances for agriculture.
The international harmonization of regulations for genetically
modified products involve several activities. First, we work with other
countries, including all European countries, to build confidence in the
review processes and work to extend existing regulatory approaches for
traditional plant products to new, genetically modified products.
Second, we work with other countries to coordinate our different
national regulatory approaches through bilateral and multilateral
forums, such as the Organization for Economic Cooperation and
Development. Third, we attempt to base our review system on rational,
science-based regulations. The recent trade agreements support this
regulatory approach.
APHIS' 1998 Budget Request
The current law request proposes $424 million for salaries and
expenses, compared to the fiscal year 1997 appropriation of $435
million. The budget request contains an increase of $1.3 million for
the Agricultural Quarantine Inspection Program (AQI) appropriated
program that inspects travelers along the Mexican and Canadian borders
and from Hawaii and Puerto Rico to the mainland. The 1998 budget
requests approximately $9 million for pest detection activities;
largely devoted to the Karnal bunt (KB) program. The budget proposes a
decrease of $3.3 million for Animal Damage Control operation by seeking
at least 50 percent of total program support from each State. This
proposal is responsive to Congressional encouragement that APHIS
maximize cost-sharing of ADC control activities. The budget also
proposes a decrease of $9.8 million in the boll weevil program since it
is no longer necessary to provide Federal funding in areas where the
boll weevil no longer exists. APHIS will still assist in establishing
new program areas, oversee and provide technical support to boll weevil
detection and control activities in the eradicated and non-infested
areas. In addition, APHIS intends to conduct architectural and
engineering work for a sterile screwworm rearing facility, to be built
in Panama with carryover funding for screwworm. Legislation will be
proposed to recover the costs of providing certain costs for animal
welfare, veterinary biologics, pink bollworm, biotechnology and the
Swine Health protection Act. We believe that the identifiable
beneficiaries of these Federal programs, rather than the general
taxpayer, should pay for the services they receive.
An appropriation of $7.2 million is proposed for maintenance and
modernization of APHIS facilities in 1998 to complement the
Agricultural Research Service's request to continue modernization of
the Plum Island Animal Disease Center and for general repairs and
maintenance on existing buildings.
agricultural marketing service
The fundamental mission of AMS is to facilitate the strategic
marketing of agricultural products in domestic and international
markets, while ensuring fair-trading practices, and promoting a
competitive and efficient marketplace to the benefit of consumers of
U.S. food and fiber products. The AMS programs enable the private
sector marketing system to provide food and other agricultural products
more efficiently, with greater dependability, lower economic cost, and
higher equitable treatment among the participants. AMS' activities
include the dissemination of market information, development of grade
standards--many of which are used in the voluntary grading programs
funded by user fees--protection of producers from unfair marketing
practices, random testing of commodities for pesticide residues,
oversight of industry funded programs to promote agricultural products,
research and technical assistance aimed at improving efficiency of food
marketing and distribution. AMS also administers marketing agreements
and orders at the national level and purchases commodities that support
domestic feeding programs.
Program Accomplishments and Plans
In response to the changing needs of its customers, AMS has
improved program delivery and broadened the focus of its programs to
incorporate a global approach to marketing services. Using additional
funds provided for fiscal year 1997 for Market News activities, AMS
absorbed reporting functions in states, such as California, that were
unable to provide the level of coverage necessary to maintain the
integrity of national market reporting. Market news coverage for
critical California markets was maintained by establishing a new office
in Fresno, California, and reporting California livestock, grain, and
hay markets utilizing AMS staff located in other states.
The U.S. Department of Agriculture's market news reports are now
available on the Internet's World Wide Web. The new Market News
Communications System will carry nearly 700 reports on a daily basis.
The World Wide Web is just one more step we have taken to increase
accessibility to and the timeliness of market news information.
In response to recommendations made by the Advisory Committee on
Agricultural Concentration, AMS broadened the scope of market news to
include more information about cattle traded under contract or formula,
value-based pricing, and regional market forces. These actions have
given our farmers and ranchers more tools to compete in today's
marketplace, which relies on timely and accurate market information. We
are happy to be on the forefront of supplying American agriculture all
the information they need in order to strategically produce and
successfully market products in a globally competitive marketplace.
As the global marketplace has grown in importance, we have taken
initial steps to meet the international information needs of American
agriculture. Within limited available funds AMS has developed
international market intelligence to support expanded foreign markets.
Through cooperative exchanges of information between the United States
and countries in Europe, Canada, Mexico, and Asia, AMS provides
critical market information, such as current prices and volume traded,
to U.S. producers that want to take advantage of these markets. Market
news reports containing this information have enabled agricultural
exporters to take advantage of expanding global marketing
opportunities. In addition, AMS is providing technical assistance aimed
at increasing U.S. export opportunities through market development
activities focusing on market information, quality assessment, and
product distribution systems. These activities are primarily conducted
through USDA's Emerging Markets Program by representing U.S. commercial
interests in various international standard setting organizations.
Under the Pesticide Recordkeeping Program, AMS is working to
achieve national coverage by 1998. Currently, AMS provides funding for
educational materials, training programs, and inspection of certified
private applicators' records through cooperative agreements with 22
states. In states that are unable to enter into cooperative agreements
with AMS, Federal employees administer the program. In addition, the
State Cooperative Extension Services and other organizations deliver
educational information.
AMS works closely with State programs to enhance marketing of
agricultural products. For example, AMS has developed a Partners in
Quality, or PIQ program with the States to design a unique system of
procedures, documentation, and audits for packing houses. The Federal-
State Improvement program improves the efficiency of the agricultural
marketing chain through cooperative grant agreements with State
Departments of Agriculture and other State agencies. And, the Pesticide
Data program is a cooperative Federal/State effort to obtain
statistically defensible data on pesticide residues in food.
AMS' 1998 Budget Request
For 1998, we are requesting a budget of $49.8 million for the
Marketing Service Program and $1.2 million for the Federal-State
Marketing Improvement Program. We are requesting an increase of
$320,000 to expand international market news reporting to South and
Central America, and Pacific Rim countries. Market surveys conducted by
AMS have indicated a great demand for this information by the food and
fiber industry as they meet increased competition in the post-GATT and
NAFTA economy.
We are also requesting an increase of $500,000 to expand domestic
market news reporting in accordance with the recommendations of the
Secretary's Advisory Committee on Agricultural Concentration. As I
mentioned earlier, initial steps have been taken within available funds
to address some of the concerns raised by the Committee. However, more
needs to be done including 1) increased reporting on the terms of
cattle traded under contract sales; 2) expanded reporting on value-
based pricing indicators; 3) establishment of more timely and detailed
reports of import and export data on livestock and meat; and, 4)
reporting the distribution of slaughter cattle by grade and yield on a
regional basis. We must adapt to the changing needs of the industry in
order to ensure a healthy competitive environment for all players.
We are working diligently to publish a draft rule on the National
Organic Standards by late spring and to implement a National program.
The program will facilitate the marketing of agricultural products as
organically produced both domestically and internationally. AMS plans
to begin accrediting state agricultural departments and private persons
who will inspect participating producers and handlers to certify
compliance with the organic program after the final rule is published
in late 1997. AMS estimates that when the program is implemented
approximately 35 private agencies will certify over 6,800 organic
producers and handlers. In order to meet the increased responsibility
for accrediting organic certifiers and administering the program, the
AMS budget includes an increase of $505,000. Consistent with the
National Organic Standards Act, we will seek to recover the cost of the
program through user fees that will be deposited into the Treasury.
The budget also proposes to return program funding for the
Pesticide Data Program to AMS from the Environmental Protection Agency
(EPA). The Administration believes that funding for the Pesticide Data
Program within AMS is preferable to funding the program within EPA. PDP
uses state-of-the-art equipment that can detect residues in parts per
billion. We find detectable residues in less than 46 to 62 percent of
the test samples. Residues, which are less than 10 percent of the
tolerance levels set by EPA, occur in 90 percent of the samples. Only
1.3 percent of the samples contain violative residues; 88 percent of
which represent pesticides having no tolerance on that particular
commodity--often due to long-term uncontrollable carryover effects from
DDT. These data help the Department dispel the notion that pesticide
residues are pervasive and at dangerous levels. It also helps improve
the confidence which domestic and foreign consumers have in the food
safety of our products. The Economic Research Service has used this
data and published reports to help the Department target its
agricultural research and extension resources. These programs implement
integrated pest management practices and eliminate mistakes by farmers
in applying pesticides, in controlling drift from adjacent fields or in
following best management field rotation practices.
AMS has the technical staff and program infrastructure in place to
meet the multiple demands for pesticide residue data. Since the program
was created, AMS has forged highly successful cooperative working
relationships with participating states to obtain statistically
defensible data. AMS staff have worked with many others to refine the
scientific methodology for collecting and conducting the tests so the
data is useful not only to EPA, but also the Food and Drug
Administration, USDA's Foreign Agricultural Service, Economic Research
Service, Agricultural Research Service, other academia, the
agricultural industry, and consumers. With the implementation of the
Food Quality Protection Act, the pesticide residue data will play a
more critical role for conducting risk assessments for the
reregistration of pesticides. The program continuity provided by
funding the program in AMS will ensure the integrity of the data and
that all the needs of agriculture and the security and safety of the
food supply to the public are met.
grain inspection, packers and stockyards administration
The Grain Inspection, Packers and Stockyards Administration's
(GIPSA) mission is to facilitate the marketing of livestock, poultry,
meat, cereals, oilseeds, and related agricultural products, and to
promote fair and competitive trading practices for the overall benefit
of consumers and American agriculture. GIPSA personnel are situated in
field locations across the country to serve our customers in the grain,
livestock and poultry industries.
Organization and Performance
Federal grain personnel work with over 2,000 State and private
inspectors to provide high-quality inspection and weighing services on
a user-fee basis. Federal inspectors service 42 export elevators
located in Georgia, Illinois, Indiana, Louisiana, Maryland, New York,
Ohio, Oregon, and Texas. A small Federal staff also provides service at
six export elevators in Eastern Canada for U.S. grain transshipped
through Canadian ports. Eight delegated States provide services at an
additional 20 export elevators located in Alabama, California,
Minnesota, Mississippi, South Carolina, Virginia, Washington, and
Wisconsin. Sixty-five (65) designated agencies service the domestic
market under GIPSA supervision. In 1996, this unique mix of Federal,
State, and private inspection agencies provided 2.3 million inspections
on an estimated 250 million metric tons of grains and oilseeds; issued
over 118,000 official weight certificates; weighed over 114 million
metric tons of grain; and met with trade teams representing 41
countries around the world to teach them about GIPSA and the U.S. grain
marketing system.
GIPSA's grain program collected over $34 million to conduct over
2.3 million official inspections, 600,000 protein and oil tests,
115,000 mycotoxin tests, and for a variety of other official inspection
and weighing services on U.S. exports of wheat, corn, coarse grains,
rice and soybeans. These products were valued at approximately $27
billion. Our activities cost only a little over one-tenth of 1 percent
of the total value of the exports.
In fiscal year 1996, GIPSA's grain program pursued a number of
initiatives to reengineer and automate our business and administrative
functions in an attempt to contain costs, lessen risks, and increase
the productivity associated with grain handling. We worked closely with
the U.S. grain handling industry on Electronic Data Interchange (EDI),
an electronic commerce project designed to automate business
transactions involving U.S. grain. A reengineered quality assurance and
quality control program for the official grain inspection system will
improve the quality and accuracy of inspection results nationwide. The
new, proactive program integrates automated technology, empowers front-
line employees to take action, and increases the use of statistical
quality control processes to further improve the performance of the
official grain inspection system.
GIPSA continued to be the sole laboratory for grain inspection
equipment in the National Type Evaluation Program. This program is a
cooperative effort with the National Institute of Standards and
Technology and the National Conference on Weights and Measures for
standardizing the commercial grain inspection equipment. GIPSA
continued numerous grain moisture meter calibration changes to improve
the accuracy and consistency of commercial grain moisture measurements.
GIPSA also helped educate our worldwide customers about the quality
and value of U.S. grain exports. GIPSA representatives met with 77
teams from 41 countries to provide information, technical guidance, and
educational seminars.
GIPSA's Packers and Stockyards Program is located in 11 offices
strategically sited throughout the United States to monitor compliance
with the P&S Act. The Commerce Department estimates the annual
wholesale value of livestock, meat, and poultry products to be
approximately $95 billion. At the close of fiscal year 1996, there were
1,348 stockyards; 6,988 market agencies/dealers; and 2,169 packer
buyers registered with GIPSA to engage in the livestock marketing
business. There also were approximately 6,000 slaughtering and
processing packers; an estimated 6,500 meat distributors, brokers, and
dealers; and an estimated 225 poultry firms subject to the P&S Act.
During fiscal year 1996, GIPSA targeted resources at providing
financial protection, promoting fair business practices, and enabling a
competitive marketing environment for livestock, meat, and poultry. The
Agency conducted over 2,000 investigations which disclosed over 800
violations of the P&S Act. Formal actions were requested in 84 cases
and 62 administrative or justice complaints were issued to bring firms
into compliance with the P&S Act. Administrative decisions and orders
were issued in 49 cases during fiscal year 1996. Most violations were
corrected voluntarily. Several cases resulted in livestock and poultry
producers receiving additional funds for the sale of their product.
Financial investigations during fiscal year 1996 resulted in $3.5
million being restored to custodial accounts established and maintained
for the benefit of livestock sellers. Packer and poultry trust
activities also returned over $400,000 to livestock sellers and over
$100,000 to poultry growers during the fiscal year. During fiscal year
1996, 205 insolvent dealers and market agencies corrected or reduced
their insolvencies by $11.2 million. GIPSA closely monitored
anticompetitive practices to determine whether there were apportioned
territories, price agreements or arrangements not to compete, and
payoffs or kickbacks to buyers. A high priority is placed on
investigating all complaints and developing information regarding the
failure of livestock dealers, market agencies, or packers to compete
for the purchase of livestock.
In 1996, a major investigation of fed cattle procurement practices
in Kansas was completed. The investigation examined over 15,000
purchase transactions involving two million head of cattle and found
that supply and demand factors were the primary causes of price
declines in the spring of 1995. GIPSA began several other actions to
increase enforcement activities in the area of anticompetitive-type
practices involving the Nation's major meat packers. A major cattle
procurement investigation in Texas will examine over 37,000 purchase
transactions involving over six million head of cattle sold during 1995
and 1996. A major slaughter hog procurement investigation will examine
approximately 50,000 purchase transactions involving over 2.5 million
head of slaughter hogs. Using data from the Kansas and Texas fed cattle
investigations, GIPSA will conduct economic analyses during fiscal year
1997 on the effect of forward contracting, packer feeding, and
marketing agreement/formula pricing arrangements.
In fiscal year 1997, GIPSA will use a review by USDA's Office of
the Inspector General (OIG) to increase its effectiveness and make full
use of its authority to investigate and rectify anticompetitive
practices and arrangements. GIPSA's structure and operating practices
and procedures may need to be modified to enhance its responsiveness to
the needs of a changing industry.
GIPSA has solicited public comment on the need for regulations to
address contract poultry grower financial arrangements. Many poultry
growers have complained about the behavior of some contractors who have
been comparing the production costs between growers in determining
payment. Growers also have complained about the inaccuracy of feed
weights, untimely feed delivery, inconvenient pickup procedures and
unacceptable procedures for weighing live birds picked up for
slaughter.
Strategic Planning
The draft GIPSA Strategic Plan was developed to guide the agency
into the next century and to help ensure that our programs and services
remain relevant to our customers and American agriculture. It was
developed in a cooperative effort with all GIPSA employees and our
customers. The four major goals that will guide our planning processes
and initiatives for the upcoming years are to ensure that: programs are
cost-effective and responsive to markets served; the credibility of
programs is unquestionable; GIPSA employees are highly-skilled
professionals providing quality customer service; and, customers'
expectations are harmonized with GIPSA's authority and capabilities.
As part of the strategic planning process, GIPSA identified several
measures that will allow us to quantitatively evaluate our performance.
In the grain program, GIPSA will begin measuring the performance of the
new quality assurance and control system for accuracy and consistency;
the average cost of oversight per metric ton of grain inspected; the
number of new tests developed; the number of improved methods/
calibrations implemented; and the average cost of export grain
inspection per metric ton. For the P&S programs, GIPSA will implement a
new electronic tracking system for complaints and investigations. This
system will enable us to establish performance goals based on the new
tracking and monitoring system, and to provide for more effective
allocation of resources.
GIPSA's 1998 Budget Request
To fund the important initiatives and to enable GIPSA to remain a
valuable part of American agriculture, under current law, GIPSA's total
budget request for fiscal year 1998 is $68.8 million, of which $25.7
million represents appropriations funding. The remaining $43.1 million
represents user fee authority for grain inspection and weighing
services.
For fiscal year 1998, the President's budget proposes a total
program level for grain inspection of $54.0 million, with $10.9 million
appropriated for compliance, standardization, and methods development
activities. The fiscal year 1998 budget also proposes legislation to
authorize, subject to appropriations, the collection of $3.6 million in
additional user fees to cover the costs of grain standardization
activities. The grain industry, which is the primary beneficiary of the
grain standards, should pay for the services they receive rather than
the general taxpayer.
For P&S Programs, the budget proposes $14.8 million, which includes
increases of $225,000 to allow GIPSA to establish electronic filing
procedures for annual reports, which is consistent with the
requirements of the Paperwork Reduction Act of 1995; $1.6 million for
activities in the packer competition and industry structure areas; and
$750,000 for poultry compliance activities.
Increasing concentration, structural change, declining market
performance, and the increasing use of complex formula and value-based
marketing systems by packers continue to raise questions of regulatory
and policy significance. Additional resources will allow GIPSA to
expand its monitoring and investigations regarding the anti-competitive
implications of structural changes and behavioral practices in the meat
packing industry, and will afford us an increased capability to support
legal actions that require complex economic and statistical analyses.
Continuous, systematic collection and analysis of data along with
aggressive investigative activities are required to address these
issues effectively. The needs for these additional resources were
supported by recommendations from the Secretary's Advisory Committee on
Agricultural Concentration.
Finally, the fiscal year 1998 budget proposes legislation to
authorize the collection of license fees to administer all activities
under the P&S Act. All meat packers, live poultry dealers, stockyard
owners, market agencies, and dealers, as defined in the P&S Act, would
be subject to the license fees. Also included is a legislative proposal
regarding a statutory dealer trust to require livestock inventories and
accounts receivable due from the sale of livestock to be held in trust
for unpaid cash sellers when a dealer fails to pay for livestock.
conclusion
I appreciate this opportunity to present the budget for the
Marketing and Regulatory Programs. We believe the proposed funding
amounts and sources of funding will provide the level of service wanted
by our customers--the agricultural producing and marketing industry,
consumers, and the general public. We are happy to answer any
questions.
______
Prepared Statement of Terry L. Medley
Mr. Chairman and members of the Committee, I am very pleased to
report on the use of resources you have entrusted to us. Using these
resources, we help to ensure a wholesome, affordable food supply while
stimulating global economies, safeguarding agricultural resources, and
protecting ecological systems. I will report on our efforts and
outcomes in more detail.
our mission
APHIS leads the way in anticipating and responding to issues
involving animal and plant health, conflicts with wildlife,
environmental stewardship, and animal well-being. Together with our
customers and stakeholders, we promote the health of animal and plant
resources to facilitate their movement in the global marketplace, which
helps to ensure abundant agricultural products and services for U.S.
consumers and necessary export markets for our farmers.
external and internal factors
In developing its overall strategy for accomplishing its mission,
APHIS considers a wide range of internal and external factors. The
following factors serve as challenges and opportunities for APHIS
programs:
1. The growing importance of global trade to U.S. agriculture and
the development of new ``rules'' of trade through GATT, NAFTA, and
other agreements.--APHIS responsibilities have grown as agricultural
markets have become global in nature. We once thought protecting U.S.
agriculture meant excluding foreign pests and diseases. New rules
concerning sanitary and phytosanitary regulations mean that we must
base exclusion decisions upon risk assessment procedures and concern
for equivalence. Equivalence of sanitary and phythosanitary regulations
among nations is the key to ensuring access to foreign markets and a
critical component of protecting U.S. agriculture.
2. The dynamic biology and epidemiology of animal and plant pests
and diseases.--Threats to plants, domestic animals, and wildlife are
dynamic. Pests, such as fruit flies, and diseases, such as stomatitis
and karnal bunt, represent risks to U.S. agricultural productivity and
access to foreign markets. APHIS is continuously challenged to update
prevention strategies, monitoring systems, and response actions needed
to ensure effective prevention, control and response.
3. The need to expand upon and develop new partnerships with
States, industry, and the public.--The role of the Federal government
in agriculture continues to change, driven in large part by budgetary
constraints and the need for partnerships to carry out new and complex
programs. In a cooperative effort, we share responsibility for animal
and plant health with the States and industry while public involvement,
both directly and through the media, is expanding. APHIS has both the
opportunity and the challenge to plan its mission and carry out its
implementation strategies through new forms of collaboration and
cooperation.
our priorities
1. Our first priority is to protect American producers and maintain
export markets by preventing the introduction and establishment of
pests and diseases harmful to U.S. agriculture.--APHIS conducts many
activities to protect the health of U.S. plant and animal resources:
including preclearance inspections, permit decisions, port of entry
inspections, quarantine treatments, monitoring and detection surveys,
and eradication of exotic plant and animal pests and diseases. While
these activities are fundamental to protecting U.S. plant and animal
resources, they succeed only when they are part of a comprehensive
safeguarding system that reduces pest risk.
Inspecting people and cargo
Our inspectors work at international ports of entry--including land
border ports, airports, and seaports--around the clock. Last fiscal
year, we conducted over 77 million inspections and intercepted nearly
1.9 million illegal agricultural products. These products harbored over
56,000 plant pests that could have infested U.S. farms and led to
billions of dollars in losses and control costs.
Our officials also intercepted more than 290,000 lots of
unauthorized meat and animal byproducts that have the potential to
spread health threats such as foot-and-mouth disease, exotic Newcastle
disease, and hog cholera to American livestock and poultry. These
diseases could dramatically reduce the $186 billion Americans receive
annually in cash receipts from agricultural products.
One of the most visible and successful parts of our pest and
disease exclusion efforts is the Beagle Brigade program. This program
pairs beagles and inspectors at 19 international airports throughout
the country to detect prohibited fruits, plants, and meat. Our beagles
can detect agricultural contraband about 90 percent of the time. The
beagles identified illegal contraband 73,751 times in 1996.
Our Agency takes action against those agricultural diseases and
pests that find their way into our country undetected. One example is
the pathogen that causes Karnal bunt. Since the pathogen's discovery in
Arizona in early March of 1996, we have worked with States and industry
to focus on four main objectives. The first is to protect U.S. wheat
producers who do not have Karnal bunt; the second is to provide the
best possible options for those who are affected by Karnal bunt; the
third is to protect the movement of wheat into domestic and
international markets. And finally, the fourth is to ensure that we
maintain the flow of pertinent disease information to guide our
efforts.
We recognized early on that, we would need to determine the actual
presence of the disease and limit the paths that enable its spread. We
initiated the national Karnal bunt survey and conducted targeted
delimiting surveys and traceback efforts to track the movement of
suspected grain and seed. We have made every effort to be attentive to
the needs of producers--striking a balance between the need to protect
those affected, while also keeping U.S. wheat moving in domestic and
foreign commerce. Accordingly, as we gathered preharvest survey
results, we began to adjust the initial boundaries of regulated areas.
We removed areas from quarantine in July. In October, we again refined
the regulations, establishing criteria for levels of risk and relieving
some restrictions.
As we have said from the very beginning, we intend to keep our
efforts to combat this disease flexible and risk-based. We will
continue national survey activities as we determine the appropriate
long term response to Karnal bunt.
2. A second priority is to facilitate trade.--Competitiveness in
international trade is of vital national interest to the United States.
We seek to maximize trade opportunities and access to new markets by
developing new export protocols which assure that exported animals and
plants and related products meet the requirements of recipient nations,
and by integrating contemporary science into negotiations with trading
partners. The establishment of the World Trade Organization has
significantly changed the rules of trade and dramatically increased the
importance of international standards. By ensuring compliance with
international standards and the entry requirements of importing
countries, APHIS facilitates the export of U.S. agricultural products,
livestock, and poultry. Because APHIS resolves sanitary and
phytosanitary issues between states, it is uniquely positioned to align
interstate regulations with international standards.
Keeping products flowing to foreign countries
APHIS keeps exports flowing by maintaining existing markets and
opening new ones. Let me describe a few examples.
With Karnal bunt disease survey data, we can clearly demonstrate
the limited distribution of the disease and we can show other countries
that Karnal bunt does not impact the quality of U.S. wheat. Because of
this, we maintained 99 percent of the $6 billion wheat export market.
Most countries have continued to accept our export certificates and we
have met with others to negotiate their acceptance of wheat from
regulated areas that tests negative. We have negotiated successfully
with several significant markets, including Germany and Italy.
We have opened new export markets in both China and Japan for U.S.
apples. These are markets that were not even considered a few years
ago. Now, because of our efforts, industry officials have estimated
that apple shipments to Japan alone will mean hundreds of millions of
dollars of income for U.S. farmers. Several livestock protocols have
just been negotiated with China, opening this market to exports of U.S.
ruminants, swine, ratites and germ plasm. The negotiations have been
long and steady, taking over ten years to get into this current market
of over $10 million for U.S. livestock. China, with its rapidly
expanding economy, is considered one of the largest potential markets
for U.S. animal-related exports.
We also worked to keep the market for cowhide exports to Korea open
and thriving. In recent years, the export of such hides has provided
American agricultural producers with more than $700 million in
revenues--making it the largest Korean market for any U.S. agricultural
product.
Maintaining information on pests and diseases
A key to maintaining access to already established international
markets and obtaining access to new markets is providing foreign
governments with up-to-date scientific information on U.S. plant and
animal health status. Quality animal health status information allowed
us to reach an agreement on sanitary requirements that permitted the
resumption of U.S. poultry exports to Russia. The accord establishes a
framework for reviewing U.S. poultry processing plants and cold storage
facilities that export poultry to Russia and provides for development
of mutually acceptable criteria for review of U.S. facilities in the
future. Documentation on six poultry diseases of concern will now
accompany birds from farms to processing plants as a result of a
cooperative State-Federal-industry program. Through these successful
negotiations, we maintained access to Russia's $500 to $700 million
market for U.S. poultry.
This information is essential if we are to certify U.S.
agricultural products for export. In fiscal year 1996, we issued over
279,000 Federal certificates for plant products alone and certified
another 527,000 ruminants and horses for shipment to foreign
destinations.
Allowing trade from regional areas
We are preparing to seize the economic opportunities that are
developing in world trade. ``Regionalization'' is a key provision in
our international trade agreements. It is a concept that the Department
of Agriculture has advocated for many years as beneficial to world
agriculture.
Under regionalization, countries recognize pest and disease status
on an area or regional--rather than national--basis, allowing trade in
agricultural products to occur from regional areas. Regionalization
will afford U.S. producers exciting new export opportunities, as pest
and disease free areas of our country are relieved from restrictions.
In addition, adherence to this principle should reduce the impact of
trade disruptions if a disease or pest outbreak occurs in a limited
region of the United States.
APHIS has proposed a rule setting up the framework for how we would
establish regionalization principles. APHIS' proposed criteria for
animal disease regionalization would establish requirements for foreign
regions based on scientific risk class levels. A region's risk-class
level--ranging from ``negligible risk'' to ``very high or unknown
risk''--would vary depending on many factors. Among them are the
region's geographic location and environment, the prevalence of
diseases of concern, and the type of commodity. Other factors to
consider are the foreign country's animal health infrastructure,
disease monitoring and surveillance systems, and the level of
enforcement to contain diseases and pests. Of course, in the realm of
international trade, we must be prepared to answer these same
questions. We are confident that U.S. agriculture will fare well.
We believe American agricultural producers will benefit from
regionalization in the future. Canada has already made the commitment
to regionalization by accepting parts of the United States as free of
bluetongue disease. The European Community is considering doing the
same. We hope to move forward with regionalization and join these
countries on this new frontier of agricultural trade.
3. A third priority is animal and plant health monitoring.--APHIS
must maintain a domestic infrastructure to assure a strong animal and
plant health monitoring and surveillance program. As part of this
effort, the Agency maintains a cadre of trained, committed
professionals to respond immediately to potential animal and plant
health emergencies.
Knowing the health status of our plants and animals
We have in place both formal and informal monitoring and
surveillance programs. Our National Animal Health Monitoring System--or
NAHMS program--surveys the Nation's livestock and poultry herds. The
program's goal is to systematically establish a baseline measure of
U.S. livestock and poultry health. Our other formal programs include
disease-specific testing and depopulation, foreign disease
investigations, and the testing of livestock at slaughter. By using
samples from animals at slaughter, for example, we are advancing our
surveillance goals to detect, isolate, and eradicate diseases like
brucellosis and tuberculosis.
Bovine Spongiform Encephalopathy (BSE) has never been detected in
the United States, and the USDA has worked aggressively and proactively
to keep it that way. In a recent hearing before the House Committee on
Government Reform and Oversight, we explained issues surrounding BSE
and actions taken to prevent its introduction. We understand that the
public is concerned about BSE, particularly in light of the recent
announcement in Great Britain that a newly identified variation of
Creutzfeldt-Jakob disease in humans may be linked to the BSE epidemic
in cattle. APHIS is continuing to work cooperatively with FSIS, FDA,
the Department of Health and Human Service's Centers for Disease
Control and Prevention, and other Federal agencies--as well as
industry, animal health organizations, and independent scientific
experts--to evaluate and reassess our policies regarding BSE. We have
established five working groups focusing on specific aspects of the
disease. We are committed to maintaining a coordinated, science-based,
and effective approach that will keep the United States free of BSE.
APHIS conducts detection surveys for incipient infestations of
exotic pests that could potentially cause economic damage if spread in
the United States. APHIS and cooperators in the Cooperative
Agricultural Pest Survey (CAPS) conduct surveys and manage the data
obtained. The data provide Federal and State officials, and the private
sector, with information on exotic pest detections, agricultural export
requirements, and the management of cooperative pest control programs.
APHIS used the CAPS network to implement the National Survey for Karnal
Bunt in an emergency response to the detection of the pathogen that
caused the disease in Arizona in March 1996. The data gathered through
these surveys enabled the Agency to continue certifying wheat for
export even after the 1996 detection.
APHIS' places information about diseases and pests directly into
the hands of producers, practitioners, and government officials using
the latest information technology. We are also taking full advantage of
the Internet and using it to quickly and efficiently reach our
customers. For example, a sheep producer in North Dakota can link up to
our interactive database and get information regarding the voluntary
scrapie certification program. A poultry producer in Georgia can visit
the APHIS home page to review regulations, search for emergency
bulletins, and find current export health requirements. A cattle
rancher in New Mexico or a dairy herd owner in Ohio can locate
information about national trends collected by our National Animal
Health Monitoring System.
We cannot rely solely upon individual programs to protect U.S.
livestock. Our efforts to prevent the entry of prohibited animal
products at our borders alone cannot protect us. Monitoring and
surveillance programs cannot stand by themselves. For this reason, we
must continue to explore new projects and new tools.
Our scientists at the National Veterinary Services Laboratories in
Ames, Iowa, strive to identify and improve the diagnostic kits and
procedures used to test livestock and poultry. Their work with
researchers and their attention to the most current veterinary
literature have led to several diagnostic advances. These advances
include a more accurate method of distinguishing hog cholera virus from
a similar virus that causes bovine viral diarrhea and molecular
techniques to distinguish pathogenetic from nonpathogenic strains of
avian influenza (AI). Scientists used this test 2 years ago in
California to confirm a potentially deadly strain of AI in a shipment
of birds. The shipment was denied entry and we prevented millions of
dollars of potential losses.
In addition, APHIS will open its Center for Plant Health Science
and Technology in Raleigh, North Carolina in 1997. The Center will
provide the best possible scientific and technological support for the
protection of U.S. plant resources and the facilitation of agricultural
trade.
Emergency response
We are not waiting for inspiration to come at the moment of crisis.
We have taken steps with State governments and industry to protect U.S.
livestock and poultry. Underlying these efforts are three emergency
management principles: prevention, preparedness, and response.
Although APHIS inspectors have remained vigilant in their watch at
our ports of entry and have proven an effective first line of defense,
we cannot rely simply on prevention. To be prepared, we must constantly
educate our people on foreign disease identification and make sure they
are armed with the best information available. To do this, we send
people across the globe to study first hand the diseases not endemic to
the United States. For example, we now have APHIS personnel in Armenia
to study Foot-and-mouth disease, and others in Poland to review the hog
cholera situation in Central and Eastern Europe. In addition, APHIS
assisted the Government of Surinam in detection and trapping activities
for the Carambola fruit fly.
The third principle of our emergency management strategy is
response. We have two highly prepared and trained teams which act as
independent disease eradication forces, specializing in early
responses. These teams are dispatched immediately at the first
indication of a foreign animal disease or plant pest. They analyze the
situation and examine what steps may be necessary. With over $186
billion in U.S. cash receipts from agricultural products at risk, we
must be poised to act quickly when breaches in our preventative
security occur.
Last August, we detected exotic Newcastle disease at a pet bird
facility in Missouri. An early response team was on the scene
immediately. They worked with State officials to trace the incident to
smuggled birds. Through quarantines and testing, they eliminated the
risk to our commercial poultry industry. Swift identification of the
disease and prompt response--two of the things we have been preparing
ourselves to do--made all the difference.
4. A fourth priority is to manage those pests and diseases which
have been detected and identified as having a significant impact on
U.S. agriculture.--In cooperation with the States, APHIS works to
improve the general health of our Nation's multi-billion dollar
agriculture industry through management techniques designed to
eradicate harmful pest and diseases, or, if eradication is not
feasible, minimize their economic impact.
Protecting people, property, and the environment
The Animal Damage Control (ADC) program helps protect agricultural
and natural resources, property, and public health and safety. ADC also
provides the world's only research center devoted entirely to the
development of methods for wildlife damage management, and currently
allocates about $7 million a year towards nonlethal methods development
activities.
Since 1989, ADC has worked closely with the National Agricultural
Statistics Service to determine the range and extent of wildlife damage
to various agricultural resources. Wildlife damage has been estimated
at approximately $3 billion a year, of which about $610 million
annually is damage to agricultural resources alone.
Bird and other wildlife strikes are a serious economic and safety
problem for civilian aircraft in the United States. For the first time,
ADC's National Wildlife Research Center, working with the Federal
Aviation Administration, completed an analysis of all wildlife strikes
reported for an entire year. The 1994 analysis revealed 2,220 reported
wildlife strikes to civilian aircraft. Biologists estimate that less
than 20 percent of the total strikes were actually reported. The
estimated nationwide economic losses from wildlife strikes to civilian
aircraft in 1994 exceeded $100 million. Losses from wildlife strikes to
U.S. military aircraft are estimated at $112 million per year.
ADC has responded by providing assistance to 340 airports across
the United States, by recommending or providing appropriate control
programs to minimize wildlife hazards in fiscal year 1996. In September
1996, ADC conducted an airport training and certification program for
wildlife biologists. Thirty ADC wildlife biologists received
specialized training in identifying and managing wildlife hazards to
air-traffic safety.
In fiscal year 1994, ADC completed and published the program's
final environmental impact statement. Since that time, the program has
completed over 40 environmental analyses on site-specific projects
throughout the country, and ADC employees have received National
Environmental Policy Act training conducted by the National Association
of Environmental Professionals and a private contractor.
Managing animal and plant pests and diseases
As a testament to our cooperative efforts with producers and the
States, many of our disease eradication programs are nearing successful
completion. We have reached a major milestone in the Cooperative State-
Federal Brucellosis Rapid Completion Plan by bringing the total number
of quarantined herds in the United States down to a record low of 32 as
of December 31, 1996. This is a tremendous achievement, and we are
working our way toward elimination of this disease. We need continued
industry cooperation to reach the goal of full eradication by the end
of 1998.
We are making significant progress in eradicating bovine
tuberculosis. Currently, 44 states are accredited free, and six States
are in a modified accredited status. One of our proudest achievements
has been the significant decrease in the number of Mexican-origin
cattle identified as having tuberculosis at slaughter. Since 1993,
there has been a 72 percent decrease in the number of tuberculosis
cases in imported Mexican feedlot animals. This is evidence that the
Mexican tuberculosis program is progressing and that our ban on
Holstein imports, which have a higher percentage of infection than
other Mexican cattle, is effective.
APHIS is uniquely capable of managing plant pests because of its
infrastructure, statutory authorities, and operational and technical
expertise. We have a role in managing plant pests such as grasshopper,
noxious weeds, boll weevil, biocontrol, and pink bollworm. We develop
and implement new management programs only after broad input and
demonstrated potential for success and support. Success requires
cooperation with industry, State cooperators, and other Federal
Agencies. The ultimate goal of such programs is to transfer the
technology to the States and industry.
5. A fifth priority is to provide Federal leadership in the areas
of animal care and horse protection.--Many citizens are concerned about
the care and handling of wildlife in captivity--particularly those used
in exhibition in zoos and circuses. We are striving to address their
concerns and to make certain that all animals covered under the Animal
Welfare Act receive proper care and treatment. We are counting on
continued cooperation with our partners to carry out our regulatory
responsibilities effectively. More and more, we are reaching out to
form new partnerships with State and local governments, animal welfare
advocates, and members of the industry to assist us in educating the
public about animal health and welfare issues. For example, APHIS
officials recently entered into a memorandum of understanding with
officials from the State of Missouri to enable us to share information
from our AWA inspections with them. This arrangement allows us to
provide Missouri State officials with copies of our inspection reports
of licensed premises. In return they provide us with any information
they have about individuals conducting regulated activities without a
license.
We are also continuing to pursue augmentation of our AWA
enforcement authority. For instance, we want to increase our authority
to refuse to issue or renew licenses to individuals not in compliance
with the AWA--or anyone convicted of violating any Federal, State, or
local animal welfare law.
One of our particular concerns is the care and handling of
elephants. Certainly, we are very much aware of the increasing public
attention and concern about the treatment these animals receive in zoos
and circuses, as well as the methods used to train them. In response,
we have developed regulatory proposals relating specifically to the
treatment and training requirements for elephants and other dangerous
exotic animals.
To improve enforcement of the Horse Protection Act (HPA), APHIS
officials depend on individuals certified through the Designated
Qualified Persons (DQP) program to assist in monitoring horse shows for
compliance. Our strategic direction for improved enforcement of the HPA
calls for a greater emphasis on the important role DQP's play in
preventing the mistreatment of horses. Many concerned individuals have
contacted APHIS officials about this important issue, and we will
consider their views as we develop and further refine our objectives
and proposals.
6. A sixth priority is to develop new or improved scientific
methods for our work.--These scientific and technical activities help
carry forward the efforts of protecting American agriculture with the
most effective exclusion, monitoring, and management methods.
The National Wildlife Research Center researchers have made
significant progress toward developing immunocontraceptive vaccines for
non-lethal wildlife damage management. We are developing new animal
drug applications for submission to FDA to permit field testing of zona
pellucida vaccine and gonadotropin releasing hormone vaccine for the
control of deer and other damage causing wildlife.
Biotechnology Advances
In fiscal year 1996, APHIS issued determinations of non-regulated
status for seven new plant varieties: herbicide tolerant cotton; male
sterile and herbicide tolerant corn; tomato with altered fruit
ripening; Colorado potato beetle resistant potato; virus resistant
squash; herbicide tolerant soybean; and virus resistant papaya. Also,
the Agency continued to provide daily Internet updates on field testing
and commercialization of new agricultural crop varieties.
We have established three broad goals for the international
harmonization of regulations for genetically modified products. First,
we will seek to ensure the integration of compatible national
approaches. This means we will work with other countries, including all
European countries, to identify the common aspects of our regulatory
systems. By doing so, we can build confidence in each other's review
processes and work to extend existing regulatory approaches for
traditional plant products to new, genetically modified products.
Second, we will work with other countries to ensure that our different
national regulatory approaches are coordinated. Toward this end, we
will work in bilateral and multilateral forums, such as the
Organization for Economic Cooperation and Development, to exchange
information on how reviews of genetically modified plants are being
conduced and on products being researched. Third, we will work to
ensure that scientific principles are used in evaluating genetically
modified products. We strive to base our review system on rational,
science-based regulations. Under recent trade agreements, this
regulatory approach has been further supported at the international
level.
fiscal year 1998 budget request
The current law request proposes $424 million for salaries and
expenses, compared to the fiscal year 1997 current estimate of $435
million. On the mandatory side we anticipate having available an
additional $41 million for the AQI user fee program based on the FAIR
Act authority, bringing that program to a program level of $141
million. We request $7.2 million for maintenance and modernization of
APHIS facilities in 1998. Of this amount, $3.2 million would be
provided, in addition to a $5 million proposal included in the
Agricultural Research Service's budget, to support continued
modernization of the Plum Island Animal Disease Center, Plum Island,
New York. We would fund general repairs and maintenance on existing
buildings with the remaining $4 million.
We request approximately $9 million, as compared to $4 million in
1997, for pest detection activities. This increase is largely needed
for the Karnal Bunt (KB) program to enable APHIS to assure all trade
partners that KB is not present in major wheat-producing areas of the
United States. The budget request also contains an increase of $1.3
million for the AQI appropriated program, which is responsible for
inspecting people and cargo crossing the Mexican and Canadian borders;
those traveling from Hawaii and Puerto Rico to the mainland; as well as
private and military aircraft and small tonnage vessels from Hawaii and
Puerto Rico. Because of increased traffic of untreated Asian and
European agricultural products into the United States through Canada,
we must increase inspections to reduce the risk of introducing exotic
agricultural pests via this route. We will conduct additional
predeparture inspections in Hawaii and preclearance inspections in
Canada and Mexico. The budget proposes a decrease of $3.3 million for
Animal Damage Control Operations. This reduction will produce savings
in Federal ADC spending by encouraging States and private entities that
do not currently spend a matching amount to contribute at least 50
percent to the cost of operating the direct activities from the ADC
program in their State. The budget proposes to maintain the current
level of support for States that cost share in excess of 50 percent.
The budget also proposes a decrease of $9.8 million in the boll weevil
program since it is no longer necessary to provide Federal funding in
areas where the boll weevil does not exist. APHIS will still offset
initial start-up cost in new program areas, as well as oversee and
provide technical support to boll weevil detection and control
activities in the eradicated and non-infested areas.
Let me highlight a few of our proposals in more detail. The first
proposal relates to Animal Damage Control Operations. While the
Administration supports an effective ADC program, we feel that, in many
instances, cooperators need to accept a greater responsibility in
paying for the services that they receive. In addition, there is
currently a significant disparity between the portion of the total
program that each State pays--ranging from zero percent to 94 percent.
Many States pay a significant portion of their program costs, and
should be congratulated. Other States need to do better. The
Appropriations Committees, in fiscal year 1997 report language
concurred with this by encouraging ``cost sharing of control activities
to the maximum extent possible''. Therefore, the Administration has
proposed paying no more than 50 percent of each State's total program.
This is not a question of supporting the ADC program, but rather one of
fairness and equity between the Federal government and cooperators, and
among cooperators.
Second is the proposed screwworm facility in Panama. We realize the
problems associated with continuing the operation of the current fly
rearing facility located in Mexico. Therefore, the budget includes
sufficient funding, through the use of prior balances, for the
architectural and engineering work and environmental studies associated
with the construction of a new fly rearing facility in Darien. We
anticipate that the facility will be ready for operation during fiscal
year 2000, which is when we expect that it will be needed.
Third, within the increase requested for pest detection, we propose
to use approximately $500 thousand to work with other agencies to look
at potential future infestations, and determine the appropriate control
measures. The costs associated with dealing with Karnal bunt have
taught us that we may need to consider alternative responses that may
be less costly to both the government and the industry. This will be an
ongoing effort.
Finally, we have proposed savings from the enactment of five new
user fees. I realize that in many cases, user fees are not popular.
However, I urge the Committee to consider these fees in the context of
who the main beneficiaries are.
conclusion
APHIS has achieved great success in protecting American
agriculture, of which we are most proud. Animal and plant pests and
diseases, however, are very tenacious and can reinfect or reinfest if
we let down the safeguard. Every day there are thousands of
opportunities for exotic pests and diseases to violate our borders and
pest and disease free areas. We can and must continue our record of
success as we move toward the third millennium. With the cooperation of
Federal and State governments and industry, we will continue to find
new ways to do so. Together, we can continue to improve and protect the
health of the Nation's animal and plant resources and the economic
opportunities that effort represents.
We appreciate the Committee's strong support of our programs in the
past, and look forward to meeting the challenge of protecting and
strengthening American agriculture in the future. We will be happy to
answer any questions.
______
Prepared Statement of Lon S. Hatamiya
Mr. Chairman and Members of the Committee, I am pleased to have
this opportunity to represent the Agricultural Marketing Service and to
present our fiscal year 1998 budget proposals.
mission
First, I would like to remind you of our agency's mission,
strategic goals, activities, and funding sources, and mention a few
current issues in the agricultural marketplace.
The mission of the Agricultural Marketing Service is to facilitate
the strategic marketing of agricultural products in domestic and
international markets, while ensuring fair trading practices and
promoting a competitive and efficient marketplace, to the benefit of
consumers of U.S. food and fiber products. In other words, our programs
are designed to help create more efficient markets which benefit
agricultural producers, processors, and consumers.
strategic goals
AMS' strategic goals are: 1) to provide high quality service and
products, in a cost-effective and efficient manner, to meet changing
customer needs; 2) to develop new marketing services to increase
customer satisfaction and expand our customer base; and 3) to tailor
and focus agency services to better facilitate strategic marketing of
U.S. agricultural products in international markets.
activities
Our Market News, Standardization and Grading activities facilitate
the domestic and international marketing of agricultural commodities.
The AMS Market News program provides timely, accurate, and unbiased
market information on numerous agricultural commodities. Market
information assists agricultural producers and traders to make critical
buying, selling, and pricing decisions. Commodity standards provide a
common language of quality for buyers and sellers in the U.S. and
abroad. AMS grading and certification services provide an impartial
evaluation of product quality so that purchasers can buy commodities
without having to personally inspect them.
The Shell Egg Surveillance program assures consumers of the safety
of shell eggs by monitoring the proper disposition of certain
undergrade and restricted eggs through regular inspections of shell egg
handling operations.
Our Market Protection and Promotion activities include Organic
Certification, Pesticide Recordkeeping, Federal Seed, and Research and
Promotion. The Organic Certification program is developing national
standards and definitions to govern the production and handling of
``organic'' agricultural products so that consumers can be assured of
the validity of the label. The program will also accredit agents who
will certify organic products to facilitate trading between the states
and abroad. The Pesticide Recordkeeping Program educates private
certified applicators of Federally restricted-use pesticides about
recordkeeping requirements, and monitors compliance with those
requirements. The Federal Seed Act program protects growers by
regulating agricultural and vegetable seed moving in interstate
commerce, prohibiting false labeling and advertising, and prohibiting
the shipment of prohibited noxious-weed seed into a State. When a
violation is verified by testing and investigation, program personnel
administratively resolve the complaint or initiate legal action.
Research and promotion programs are used by agricultural producers to
broaden and enhance national and international markets for various
commodities. Each of these industry-funded programs reimburses AMS for
the cost of overseeing its program.
AMS' Wholesale Market Development program works to expand and
improve domestic markets for agricultural products by providing
technical advice and assistance to states and municipalities that are
interested in creating or upgrading wholesale markets, auction and
collection markets, retail and farmers' markets, and urban markets.
Program personnel also conduct cooperative feasibility studies to
evaluate and suggest more efficient ways to handle and market
agricultural products.
The nation's transportation system is crucial for agricultural
products to reach their markets. AMS provides technical assistance to
shippers and carriers and participates in transportation regulatory
actions. We also provide economic analysis and recommend improvements
to domestic and international agricultural transportation.
The Federal-State Marketing Improvement program makes matching
funds available to state marketing agencies to improve the efficiency
of the agricultural marketing chain. Such projects might identify and
test alternative farm commodities, identify international markets, or
test the use of new technology in agricultural marketing.
The Perishable Agricultural Commodities Act, or PACA, protects
producers, shippers and distributors from loss due to unfair and
fraudulent practices in the marketing of perishable agricultural
commodities. Our PACA program enforces the Act by investigating
violations.
AMS uses Section 32 funds to stabilize market conditions and
improves the returns to producers through marketing agreements and
orders and commodity purchases. Marketing agreements and orders are
regulations that are requested and funded by the regulated producers
and handlers, and locally administered by marketing order committees
and market administrators. AMS oversees and administratively supports
the activities of the industry. AMS purchases selected meats, fish,
poultry, fruits and vegetables to remove excess supplies from the
markets and provide a dependable supply of agricultural commodities for
the National School Lunch and other domestic feeding programs.
funding sources
Despite our wide range of activities, AMS places a universal
emphasis on providing service as cost-effectively as possible. This is
because over 75 percent of AMS funding is revenue we generate by
providing services voluntarily requested by our customers. Because our
programs depend on our customers' requests for service, we must ensure
that these services evolve to meet the needs of our customers, and that
the fees we charge are acceptable to industry. We operate all of our
programs--user-funded and appropriated--on this cost-conscious
principle. All of our Marketing Services programs--including market
news, pesticide recordkeeping, Federal Seed, organic standards,
transportation, and wholesale market development--as well as our
Federal/State Market Improvement Program, are operating on less than
$40 million in appropriated funds this year. Administrative costs for
commodity purchase services and marketing order oversight are funded
from Section 32 customs receipt funds. Our user funded programs total
$171 million.
current issues
Before I present our budget proposals, I would like to discuss the
AMS programs that received increased funding this fiscal year.
Domestic Market Reporting
This fiscal year, Congress appropriated additional funding to
support domestic market reporting. Because several key agricultural
production states reduced or completely eliminated their market news
programs, AMS has increased its Market News activities to maintain the
integrity of national market reporting. Producers, marketers, and
others in related industries rely on AMS Market News data on
agricultural commodity supply, movement, contracts, inventories and
prices to make selling, buying, and pricing decisions. We must have
sufficient information on major production and market states, such as
California, to present an accurate picture of the national market. The
AMS Market News Program has absorbed those nationally significant
reporting functions formerly provided by states through a series of
consolidations and a shifting of resources, and by adding staff where
necessary. These changes, which include establishing a new office in
Fresno, California, and reporting California livestock, grain, and hay
markets from AMS offices in Washington, Oregon, Arizona, and Colorado,
will enable us to continue to provide timely, accurate, and unbiased
market information.
Pesticide Recordkeeping
We also received funding this year to expand pesticide
recordkeeping monitoring activities nationwide. The Pesticide
Recordkeeping Program was established by Congress in 1990 to ensure
that certified private applicators of restricted use pesticides
maintain records comparable to records maintained by commercial
applicators in each state. This program provides data that can be used
by state and Federal agencies to design sound pesticide practices and
by the medical community for treatment of individuals exposed to
pesticides.
AMS is working to provide national coverage by providing
educational materials, programs, and inspections of private
applicators' records. In the majority of states, these activities are
accomplished through cooperative agreements with the state designated
agencies. Where states are unable to enter into a cooperative agreement
with AMS, Federal employees will conduct inspections of certified
private applicators' records and provide educational information. AMS
will also continue to provide funding for state programs that train
certified applicators, and the development of educational materials by
state and Federal programs. The State Cooperative Extension Services
and other organizations deliver educational information to people
affected by the regulations. We expect the program to reach national
coverage by the end of 1998.
fiscal year 1998 budget requests
Now, I wish to present our budget requests. We are proposing a net
increase in Marketing Services funds totaling $11.3 million; $320
thousand for international market reporting, $500 thousand to expand
market reporting to help counter the effects of market concentration,
$505 thousand to implement the Organic Certification Program
nationwide, and $9.8 million to restore funding for the Pesticide Data
Program to AMS. We are also proposing user fees for oversight of
marketing agreements and orders.
International Market News
To effectively compete in export markets, U.S. agriculture must
have easy access to a consistent, public source of timely information
on international prices. For fiscal year 1997, the forecast for U.S.
agricultural exports is approximately $56 billion, with a volume of
almost 147 million metric tons. This year, livestock products, poultry
meat and horticultural exports are expected to reach record levels.
Meat exports are expected to reach almost $5 billion, poultry and
poultry products $3 billion, and horticultural exports are forecast at
almost $11 billion. Of total agricultural exports, about 43 percent are
expected to come from sales in Asia, 16 percent in Western Europe, and
almost 17 percent in Latin America. Agricultural imports are forecast
at $34 billion in fiscal year 1997. The fiscal 1997 agricultural trade
surplus is projected at almost $22 billion.
AMS is currently collecting limited international market
information, but more in-depth information from a wider array of
markets is needed. For example, the meat industry is requesting more
information from Korea and other Pacific Rim countries to remain
competitive in the rapidly expanding world meat market. AMS reporters
will need to establish contact with private companies and government
sources to collect and exchange market information. Cost increases to
provide foreign market information would include reporters, travel, and
electronic communications. Improving our knowledge of overseas markets
should have a significant positive impact on the ability of our
products to complete successfully in the international marketplace.
Enhanced Market Reporting
We must also adapt to market changes occurring in the U.S. The
Department is increasingly concerned about the effects of industry
concentration and the resulting potential for non-competitive behavior.
Concentration can have a significant negative impact on small farmers
and producers. The Secretary's Advisory Committee on Agricultural
Concentration recommended that the price discovery and reporting
processes be enhanced to ensure fair competition. The advisory
committee recommended that AMS Market News: 1) increase its reporting
on the terms of cattle traded under contract sales, 2) expand its
reporting of value-based pricing indicators, 3) institute more timely
and more detailed reports of import and export data on livestock and
meat, and 4) report the distribution of slaughter cattle by grade and
yield on a regional basis. Initial steps have been taken to address
these information needs; however, resource availability is limiting our
ability to be fully responsive. These initiatives will require
additional AMS reporters, more travel, and improved technology to cover
auction sales and to collect additional information from producers and
packers.
Organic Certification
The organic food industry is estimated to have a value of nearly $3
billion and is growing more than 20 percent a year. With this growth
has come increasing confusion in the marketplace about what is and what
is not organic. The Organic Foods Production Act of 1990 required the
Secretary to establish and implement national minimum organic standards
and a program to certify organic production. The Act was requested by
the organic community after they observed problems such as fraudulent
use of the term ``organic'', customer confusion, variations among
certifiers on standards and requirements, and excessive documentation
required by foreign importers before they would accept products
certified in the U.S. By using recommendations from the National
Organic Standards Board and public input from certifiers, consumers,
producers and handlers, AMS has developed a public-private partnership
that encourages innovation within the boundaries of organic principles
and legislative intent.
National standards and definitions of agricultural products that
are organically produced will facilitate the movement of products
between States and assure consumers of the validity and integrity of
the organic label. Beyond the domestic market, standardized organic
production will facilitate international marketing of U.S. organic
products. We will work to harmonize AMS standards with those of
existing and developing international organic programs.
The National Organic Standards Board--which consists of growers,
processors, consumers, environmentalists, a retailer and a scientist--
has prepared recommendations on more than 120 substances for the
National List of allowed synthetics and prohibited natural substances
for use in organic production and processing. We expect to publish the
rules and implementation plan for production and processing standards
and for accreditation of certification agents this year. After that, we
will begin accrediting representatives of state agricultural
departments and private persons who will inspect producers and handlers
to certify compliance with the organic program. We need additional
resources to expedite development of the program, ensure labeling
integrity, and facilitate global trade of our country's organic
products. Once the program is fully established, certifying agents will
be assessed fees for USDA accreditation, which is provided for under
current legislative authority. Any fees collected will be deposited
into the Treasury.
Pesticide Data Program
The Food Quality Protection Act, passed in August 1996, confirmed
the need for collection of pesticide residue data. The Act states that
``The Secretary of Agriculture shall ensure that the residue data
collection activities conducted by the Department of Agriculture in
cooperation with EPA and the Department of Health and Human Services,
provide for the improved collection of pesticide residues, including
guidelines for the use of comparable analytical and standardized
reporting methods, and the increased sampling of foods most likely
consumed by children.'' The fiscal year 1997 Appropriations Act cut
funding for the Pesticide Data Program from AMS and placed it in EPA's
budget for fiscal year 1997. EPA has been working with the cooperating
states and AMS to ensure that data collection is continued. For fiscal
year 1998, we are requesting that the Pesticide Data Program funding be
returned to AMS.
Since the program's inception five years ago, we have established
statistically reliable procedures, an automated information system for
pesticide residue data, and good working relationships with industry
and participating state and Federal agencies. AMS' procedures are
statistically designed to make unbiased estimates of residues collected
in the ten cooperating states that represent half of the U.S.
population. Between 50 and 60 samples of each commodity are collected
and analyzed each month. The pesticides targeted for data collection
were selected by EPA in consultation with AMS. The commodities chosen
for testing are among those most prevalently consumed by the American
public. The number of fruits and vegetables collected is based on state
population, wheat samples are collected based on state and monthly
production data, and milk samples are collected based on state
production and represent at least 45 percent of the available fluid
milk in the U.S. market. Samples are collected as close to the consumer
as possible, ensuring an estimate of actual exposure that includes
post-harvest applications of fungicides and growth regulators. Also,
before analysis, samples are prepared according to practices of the
average consumer (such as peeling or washing). Since the program began,
25 commodities have been included for testing, 19 of which are
considered high consumption commodities by infants and children. Eleven
commodities are currently included in the program.
The Administration believes funding the Pesticide Data program
through AMS is more appropriate than EPA. The program has thrived and
grown in international stature because we were able to rely on our
agricultural marketing expertise to develop a statistically reliable
testing system. The AMS residue testing results have been used to
confront barriers to international trade of U.S. agricultural
commodities and in the establishment of international standards. USDA's
Foreign Agricultural Service uses data from the program to convince
foreign governments that our food is safe, and has found the program's
findings to be an invaluable tool in facilitating U.S. exports.
Pesticide Data Program personnel also provide information to the Codex
Alimentarius Commission and the World Health Organization.
AMS already has the systems, equipment and experience needed to
consolidate and report the vast quantities of data collected, and we
have proven that we can operate this program effectively and
efficiently to carry out residue testing work that will satisfy the
public's demand for a safe food supply.
legislative proposal
We are again proposing authorizing legislation that will allow AMS
to collect assessments for the Federal oversight of marketing
agreements and orders. The proposed fees would cover the costs of
establishing and amending the orders through public hearings, and other
general oversight and administration of the program. Currently, all
Federal oversight of these programs is funded from the Section 32
permanent appropriation. The Secretary issues marketing agreements and
orders for a given marketing area in response to requests by a majority
of producers. Marketing orders are administrated locally by marketing
order committees and market administrators whose costs are already
funded from assessments on regulated producers and handlers. AMS
proposes to recover Federal costs through increased assessments paid by
the producers and handlers who benefit from the agreements and orders.
Each industry would have to determine whether or not the benefits
provided by their marketing order were sufficient to outweigh the
additional cost. We estimate that this proposal will result in savings
of $10.7 million, offset in fiscal year 1998 by one-time liabilities
costs of about $500 thousand, for a net savings of $10 million in the
first year.
budget request summary
In total, our 1998 budget request includes $49.8 million in
appropriated funding for our marketing services programs, $1.2 million
for Payments to States and Possessions, and $16.9 million from Section
32 funds for administration of commodity purchase services and
marketing agreements and orders. Approval of the legislative proposal
to charge user fees for marketing agreements and orders would reduce
our request by $10.2 million. Thank you for this opportunity to present
our budget proposals.
______
Prepared Statement of James R. Baker
Mr. Chairman and members of the Committee, I am pleased to submit
the fiscal year 1998 budget proposal for the Grain Inspection, Packers
and Stockyards Administration (GIPSA).
GIPSA is part of USDA's Marketing and Regulatory Programs, which
are working to ensure a productive and competitive global marketplace
for U.S. agricultural products. GIPSA's mission is to facilitate the
marketing of livestock, poultry, meat, cereals, oilseeds, and related
agricultural products, and to promote fair and competitive trading
practices for the overall benefit of consumers and American
agriculture.
Our mission is carried out in two different segments of American
agriculture. GIPSA's Federal Grain Inspection Service (FGIS) provides
the U.S. grain market with Federal quality standards and a uniform
system for applying them. Our Packers and Stockyards Programs (P&S)
ensure open and competitive markets for livestock, meat, and poultry.
GIPSA has both service and regulatory roles. It provides impartial,
accurate quality and quantity measurements to create an environment
that promotes fairness and efficiency. And, the Agency's programs
provide financial protection to livestock producers and ensure fair and
competitive markets.
The existence of GIPSA as an unbiased, third-party entity helps
ensure a fair and competitive marketing system for all involved in the
merchandising of grain and related products, livestock, meat, and
poultry.
organization
GIPSA is comprised of approximately 840 personnel, including full-
time, temporary, and intermittent employees. GIPSA personnel are
situated in field locations across the country to serve our customers.
Federal grain personnel work with over 2,000 State and private
inspectors to provide high-quality inspection and weighing services on
a user-fee basis. Federal inspectors service 42 export elevators
located in Georgia, Illinois, Indiana, Louisiana, Maryland, New York,
Ohio, Oregon, and Texas. A small Federal staff also provides service at
6 export elevators in Eastern Canada for U.S. grain transshipped
through Canadian ports. Eight delegated States provide services at an
additional 20 export elevators located in Alabama, California,
Minnesota, Mississippi, South Carolina, Virginia, Washington, and
Wisconsin. Sixty-five (65) designated agencies service the domestic
market under GIPSA supervision. In 1996, this unique mix of Federal,
State, and private inspection agencies provided 2.3 million inspections
on an estimated 250 million metric tons of grains and oilseeds; issued
over 118,000 official weight certificates; weighed over 114 million
metric tons of grain; and met trade teams representing 38 countries
around the world to teach them about GIPSA and the U.S. grain marketing
system.
GIPSA's Packers and Stockyards Programs' is comprised of 180 full-
time employees; 135 of whom are employed in 11 offices strategically
located throughout the United States to monitor compliance with the P&S
Act. During fiscal year 1996, GIPSA concentrated resources on providing
financial protection and promoting fair business practices and a
competitive marketing environment for livestock, meat, and poultry. The
Agency conducted over 2,000 investigations, disclosing over 800
violations of the P&S Act. Formal actions were requested in 84 cases
and 62 administrative or justice complaints were issued in order to
bring firms into compliance with the P&S Act. Administrative decisions
and orders were issued in 49 cases during fiscal year 1996; however,
most violations were corrected on a voluntary basis with several
resulting in livestock and poultry producers receiving additional funds
for the sale of their product.
This, of course, is only a brief summary of our accomplishments.
I'd like to provide some more in-depth information about our programs
and their activities.
gipsa's federal grain inspection service
GIPSA's grain program plays a critically important role in
facilitating the marketing of U.S. grain and related commodities. We
provide the U.S. grain market with Federal quality standards and a
uniform system to apply these standards. Through this program, GIPSA
provides descriptions (grades) and testing methodologies for measuring
the quality and quantity of grain, rice, edible beans, and related
commodities, and, provides an array of inspection and weighing
services, on a fee basis, through a unique partnership of Federal,
State, and private laboratories.
By serving as an impartial third party, GIPSA ensures that the
standards are applied and the weights recorded in a fair and accurate
manner. Our presence in the market advances the orderly and efficient
marketing and effective distribution of U.S. grain and other assigned
commodities from the Nation's farms to domestic and foreign buyers.
Our guidance in carrying out these important tasks is provided by
the U.S. Grain Standards Act (USGSA) and the Agricultural Marketing Act
of 1946 (AMA) as it relates to the inspection of rice, pulses, lentils,
and processed grain products. Under these two Acts, GIPSA:
--Establishes official U.S. grading standards and testing procedures
for eight grains (barley, corn, oats, rye, sorghum, triticale,
wheat, and mixed grain), and four oilseeds (canola, flaxseed,
soybeans, and sunflower seed) under the USGSA; and for rice,
lentils, dry peas, and a variety of edible beans under the AMA.
--Provides American agriculture and customers of U.S. grain around
the world with a national inspection and weighing system that
applies the official grading and testing standards and
procedures in a uniform, accurate, and impartial manner.
--Inspects and weighs exported grain and oilseeds. Domestic grain and
oilseed shipments, grain and oilseed imported into the United
States, and crops with standards under the AMA are inspected
and weighed upon request.
--Monitors grain handling practices to prevent the deceptive use of
the grading standards and official inspection and weighing
results, and the degradation of grain quality through the
introduction of foreign material, dockage, or other nongrain
material to grain.
Through these permissive and mandatory programs, GIPSA promotes the
efficient and effective marketing of U.S. grain and other commodities
from farmers to end users.
To better illustrate the impact and efficiency of GIPSA's grain
inspection program, consider the following: USDA's ``Outlook for U.S.
Agricultural Exports'' (December 4, 1996) reports that in fiscal year
1996, U.S. exports of wheat, corn, coarse grains, rice and soybeans
were valued at approximately $27 billion. GIPSA's grain program, which
operates on a user fee basis, collected fee revenue of $30 million for
over 2.3 million official inspections, 600,000 protein and oil tests,
115,000 mycotoxin tests, and a variety of other official inspection and
weighing services on these exports. Our revenues totaled a little over
one-tenth of 1 percent of the total value of the exports.
In fiscal year 1996, GIPSA's grain program pursued a number of
initiatives to improve service delivery and organizational
effectiveness. We recognize that reengineering and automating our
business and administrative functions are essential if we are to
contain costs, lessen the risks, and increase the productivity
associated with grain handling.
In fiscal year 1996, GIPSA continued to work closely with the U.S.
grain handling industry on Electronic Data Interchange (EDI), an
electronic commerce project designed to automate business transactions
involving U.S. grain. As part of this important initiative, GIPSA is
developing a standardized data file for its inspection and weighing
results that will directly support the EDI functions.
Also in fiscal year 1996, GIPSA began implementing a reengineered
quality assurance and quality control program for the official grain
inspection system to ensure the quality and accuracy of inspection
results nationwide. The new, proactive program integrates automation
technology, empowerment of front-line employees, and statistical
quality control processes to further improve the performance of the
official inspection system.
GIPSA continued cooperative efforts with the National Institute of
Standards and Technology and the National Conference on Weights and
Measures to standardize commercial grain inspection equipment as part
of the National Type Evaluation Program (NTEP). GIPSA serves as the
sole NTEP laboratory for grain inspection equipment. In fiscal year
1996, GIPSA continued to collect calibration data that were used as the
basis for numerous grain moisture meter calibration changes to improve
the accuracy and consistency of commercial grain moisture measurements.
Our efforts to facilitate the marketing of U.S. grain are not
concentrated solely within our borders. GIPSA also is working to help
educate our worldwide customers about the quality and value of U.S.
grain exports. In fiscal year 1996, GIPSA representatives met with 77
teams from 41 countries to provide information, technical guidance, and
educational seminars.
The grain program will continue to work to ensure our relevance and
value to American agriculture. We are reaffirming our commitment to
facilitating the marketing of U.S. grain by responding to our
customers' needs and providing the highest quality grain inspection and
weighing services to all whom we serve--from farmer to domestic and
international end users, and all those in between. Our efforts in
fiscal year 1997 will focus on networking the Federal, State, and
private partners comprising the system, and working with our customers
to identify how we can apply automation to reengineer our
administrative and inspection processes to achieve greater efficiency
and productivity.
In fiscal year 1997, our commitment to improved efficiency and
effectiveness will continue to serve American agriculture well, as U.S.
agricultural exports are expected to total $55.5 billion. Exports of
wheat, corn, coarse grains, rice and soybeans are expected to account
for $18.5 billion of that total (``Outlook for U.S. Agricultural
Exports,'' December 1996).
gipsa's packers and stockyards programs (p&s)
The principal purpose of GIPSA's Packers and Stockyards (P&S)
Programs is to provide financial protection and promote fair business
practices and a competitive marketing environment for livestock, meat,
and poultry. Our programs foster fair and open competition, and guard
against deceptive and fraudulent practices affecting the movement and
price of meat animals and their products. We also work to protect
consumers and members of the livestock, meat, and poultry industries
from unfair business practices. To carry out these important roles,
GIPSA:
--Administers the Packers and Stockyards Act of 1921.
--Carries out the Secretary's responsibilities under Section 1324 of
the Food Security Act of 1985, which permits States to
establish ``central filing systems'' to prenotify buyers,
commission merchants, and selling agencies of security
interests against farm products, and issue regulations and
certify the systems that meet the criteria in the statute.
--Enforces the Truth-in-Lending Act, the Fair Credit Reporting Act,
and the Freedom of Information Act as each relates to persons
and firms subject to the P&S Act.
The production and marketing of livestock, meat, and poultry are
important to American agriculture and significantly impact the Nation's
economy. The Commerce Department estimates the annual wholesale value
of livestock, meat, and poultry products to be approximately $95
billion. At the close of fiscal year 1996, there were 1,348 stockyards;
6,988 market agencies/dealers; and 2,169 packer buyers registered with
GIPSA to engage in the livestock marketing business. There also were
approximately 6,000 slaughtering and processing packers; an estimated
6,500 meat distributors, brokers, and dealers; and an estimated 225
poultry firms subject to the P&S Act.
GIPSA's P&S Programs continues to provide payment protection to
livestock and poultry producers by focusing on the financial area.
Financial investigations during fiscal year 1996 resulted in $3.5
million being restored to custodial accounts established and maintained
for the benefit of livestock sellers. Packer and poultry trust
activities also returned over $400,000 to livestock sellers and over
$100,000 to poultry growers during the fiscal year. Dealers and market
agencies are required to meet solvency requirements, a critical
component of payment protection of the P&S Act. During fiscal year
1996, 205 insolvent dealers and market agencies corrected or reduced
their insolvencies by $11.2 million.
GIPSA closely monitors anticompetitive practices which may be
impeding the free trade of livestock. Any practice, agreement, or
understanding that excludes potential buyers from bidding in open
competition is considered a restraint on competition. Examples of such
practices include apportioning territories, price agreements or
arrangements not to compete, and payoffs or kickbacks to buyers. A high
priority is placed on investigating all complaints and further
developing information received concerning the failure of livestock
dealers, market agencies, or packers to compete for the purchase of
livestock.
In 1996, a major investigation of fed cattle procurement practices
in Kansas was completed. The investigation examined over 15,000
purchase transactions involving 2 million head of cattle. The results,
which were released in March 1996, indicated that supply and demand
factors were the primary causes of price declines in the spring of
1995. In fiscal year 1996, GIPSA began several actions to increase
enforcement activities in the area of anticompetitive-type practices
involving the Nation's major meat packers. The Agency initiated a major
cattle procurement investigation in Texas that will examine over 37,000
purchase transactions involving over 6 million head of cattle sold
during 1995 and 1996. A major slaughter hog procurement investigation
was also initiated during 1996. This investigation will examine
approximately 50,000 purchase transactions involving over 2.5 million
head of slaughter hogs. Using data from the Kansas and Texas fed cattle
investigations, GIPSA will conduct economic analyses during fiscal year
1997 on the effect of forward contracting, packer feeding, and
marketing agreement/formula pricing arrangements.
In fiscal year 1997, GIPSA will continue to improve the efficiency
of its P&S Programs, and ensure that the programs play an effective
role in the U.S. livestock, poultry, and meat marketing system. A key
activity in our improvement process involves a review by USDA's Office
of the Inspector General (OIG) of current enforcement practices under
the P&S Act. The OIG review is expected to provide data on how GIPSA
can maximize its effectiveness and make full use of its authority to
investigate and correct anticompetitive practices and arrangements. The
review also will examine whether GIPSA's structure and operating
practices and procedures should be modified to enhance its
responsiveness to the needs of a changing industry.
Also in fiscal year 1997, GIPSA will solicit public comment on the
need for regulations addressing contract poultry grower financial
arrangements. Currently, the predominant method used to pay growers for
flocks under a poultry growing arrangement is based on a system that
compares a grower's results to that of other growers during a specified
time period. Many poultry growers have repeatedly expressed concern
that comparing their production costs against those of other growers to
determine payment is unfair. Growers also have expressed concerns about
the accuracy of feed weights and feed delivery, pickup procedures, and
the procedures for weighing live birds picked up for slaughter.
As you can see, a great deal was accomplished in fiscal year 1996
and much is planned for fiscal year 1997 in both of GIPSA's program
areas. Our efforts to continuously improve our programs and services
were greatly enhanced last fiscal year by the development of the
Agency's first strategic plan.
strategic planning
The GIPSA Strategic Plan was developed to guide the agency into the
next century and to help ensure that our programs and services remain
relevant to our customers and American agriculture. The American public
and international customers of U.S. agricultural products want an ample
supply of quality food at a reasonable price. This means American
markets must be efficient, competitive, and quality-conscious. GIPSA's
general goals, as well as the agency's products and services, are
oriented toward fulfilling this need for a fair, competitive, and
efficient market system.
The strategic plan, developed in a cooperative effort by all GIPSA
employees and our customers, outlines four major goals that will guide
our planning processes and initiatives for the upcoming years:
--We will ensure that programs are cost-effective and responsive to
markets served.
--We will ensure that the credibility of programs is unquestionable.
--We will ensure that GIPSA employees are highly-skilled
professionals providing quality customer service.
--We will work to harmonize customers' expectations with GIPSA's
authority and capabilities.
As part of the strategic planning process, GIPSA identified several
measures that will allow us to quantitatively evaluate our performance.
In the grain program, in fiscal year 1998, GIPSA will begin measuring
the performance of the new quality assurance and control system for
accuracy and consistency; the average cost of oversight per metric ton
of grain inspected; the number of new tests developed and improved
methods/calibrations implemented; and the average cost of export grain
inspection per metric ton.
For the P&S programs, GIPSA will implement a new electronic
tracking system for complaints and investigations. This will enable us
to establish performance goals based on the new tracking and monitoring
system, and to provide for more effective allocation of resources. In
developing our strategic plan, GIPSA reaffirmed its commitment to
strengthening the cost-effectiveness, responsiveness, and credibility
of our programs and services. In fiscal year 1998, GIPSA will be
pursuing a number of initiatives that will reflect the goals and
commitments outlined in our strategic plan. As mentioned above, these
initiatives include establishing guidelines and developing the
technology for joint industry/GIPSA ventures to automate the grain
inspection process at export grain elevators; designing and
implementing an investigation tracking and monitoring system;
networking all of the Federal, State, and private partners comprising
the official grain inspection and weighing system; implementing a new
quality assurance and control program for grain inspection activities;
and conducting regional and industry-wide reviews and investigations in
the livestock, meat, and poultry industries.
fiscal year 1998 budget request
To fund these important initiatives and to enable GIPSA to remain a
valuable part of American agriculture, under current law, GIPSA's total
budget request for fiscal year 1998 is $68.8 million, of which $25.7
million represents appropriations. The remaining $43.1 million
represents user fee authority for inspection and weighing services.
For fiscal year 1998, the President's budget proposes a total
program level for grain inspection of $54.0 million, with $10.9 million
appropriated for compliance, standardization, and methods development
activities. The fiscal year 1998 budget also proposes legislation to
authorize the collection of $3.6 million in additional user fees to
cover the costs of grain standardization activities.
For P&S Programs, the budget proposes $14.8 million, which includes
increases of $225,000 to allow GIPSA to establish electronic filing
procedures for annual reports, which is consistent with the
requirements of the Paperwork Reduction Act of 1995; $1,595,000 for
activities in the packer competition and industry structure areas; and
$750,000 for poultry compliance activities.
Increasing concentration, structural change, market performance,
and the use of complex formula and value-based marketing systems by
packers continue to raise questions of regulatory and policy
significance. Additional resources will allow GIPSA to expand our
capability to monitor and investigate the competitive implications of
structural changes and behavioral practices in the meat packing
industry, and will increase our capability to support legal actions
that require complex economic and statistical analyses. Continuous,
systematic collection and analysis of data along with aggressive
investigative activities are required to address these issues
effectively.
To promote competition and improve market performance and
confidence in the livestock and poultry sectors, the Secretary's
Advisory Committee on Agricultural Concentration recommended increased
monitoring and enforcement of antitrust and regulatory policy and,
specifically, increased antitrust enforcement under current regulations
of the P&S Act. Since anticompetitive practices are complex and often
encompass broad geographic areas, investigations involving building
cases for unacceptable behavior has become more difficult and resource-
intensive.
The requested increase in funds for P&S Programs will allow GIPSA
to conduct additional detailed investigations and analyses in selected
geographic markets on a timely basis. It also will help us meet our
responsibility of fostering fair and open competition, and guarding
against deceptive and fraudulent practices that affect the movement and
price of meat animals and meat food products.
As the industry continues to rapidly move to value-based methods of
pricing, the complexity and sophistication of the packing industry's
procurement and pricing methods will continue to increase. With this
change also comes greater opportunity for packers to engage in unfair,
unjustly discriminatory, or deceptive practices to the detriment of
livestock producers. The Agency must be able to commit the necessary
resources to conduct the type of complex investigations that are
required to ensure the integrity of the accounting and payment to
producers.
The Secretary's Advisory Committee on Agricultural Concentration
also offered recommendations to address anticompetitive practices in
the poultry industry. In recent years, contract poultry growers have
looked to USDA for help in assuring they are treated fairly when
dealing with large, integrated poultry companies. The Committee
recommended that the Secretary be provided the same administrative
enforcement authority for poultry as currently exists for red meat to
protect contract poultry growers from unfair and discriminatory
practices.
The increase of $750,000 for poultry compliance will allow GIPSA to
operate on other than a complaint-driven basis and permit increased
compliance investigations into the poultry industry. More in-depth
investigations will increase the Agency's ability to identify or
address practices in the industry that may be unfair, unjustly
discriminatory, or deceptive before practices escalate.
Finally, as in previous years, the fiscal year 1998 budget proposes
legislation to authorize the collection of license fees to administer
all activities under the P&S Act. In fiscal year 1998, funds would be
available only to the extent provided in advance in appropriations
acts. All meat packers, live poultry dealers, stockyard owners, market
agencies, and dealers, as defined in the P&S Act, would be subject to
the license fees. Also included is a request to provide for a
legislative proposal regarding a statutory dealer trust to require
livestock inventories and accounts receivable due from the sale of
livestock to be held in trust for unpaid cash sellers when a dealer
fails to pay for livestock. If the user fee legislation is enacted, the
cost of administering this provision would be recovered through license
fees.
conclusion
Mr. Chairman, this concludes my statement. I appreciate the
opportunity to testify on behalf of one of USDA's newest agencies. I
will be happy to answer any questions the Committee may have.
Introduction of Witness
Senator Cochran. Before proceeding with questions of you or
your colleagues who administer these programs, I am going to
call on Thomas Billy for his statement as well. I know that the
Under Secretary's position is vacant. Mike Taylor was in that
job and now is no longer with the Department I understand. I
assume you have been elevated to be Acting Under Secretary, or
at least you do not have a boss here. You are the head man.
Right? [Laughter.]
Mr. Billy. Yes, sir.
Senator Cochran. And you have an equal footing--and I want
everybody to understand that--with the marketing and regulatory
programs. We consider that to be the case anyway.
So, I am going to ask you to proceed with any comments or
statements that you have about the budget for the Food Safety
and Inspection Service, Mr. Billy, and then we will have a
chance to have questions on all these subjects. Please proceed.
Statement of Thomas J. Billy
Mr. Billy. Thank you, Mr. Chairman, and members of the
subcommittee.
I am pleased to appear before you today to discuss the
President's fiscal year 1998 budget request for the Food Safety
and Inspection Service. I request that my full statement be
entered into the record.
Senator Cochran. Without objection, it is so ordered.
Mr. Billy. Thank you very much.
As you may know, I became the Administrator of the Food
Safety and Inspection Service in October 1996, after serving as
the Associate Administrator for 2 years.
Food Safety Partnership
During my years as a public servant, I have become
convinced that the only way we can serve the American public is
through partnerships. I believe that the Congress and FSIS are
partners, striving toward the same results: safer food and a
more efficient use of the taxpayers' dollars. I wish to
acknowledge your role in supporting the 1997 budget request,
and making an essential contribution to fulfilling our Federal
responsibilities in food safety.
Now, I want to tell you very briefly about our role in the
partnership during the last year, and how we plan to continue
to fulfill our responsibilities. I will talk briefly about the
progress we are making because of the partnerships we have
formed with key constituencies, including consumers, the
regulated industry, and our own employees.
Fundamental Changes in FSIS
In the last 2 years, FSIS has been working toward two
goals: to make food safer by finding better ways to control
pathogens and to make better use of our resources. We recognize
that the agency would have to change its reliance on the
traditional command-and-control method of doing business and
that this would require a fundamental cultural change within
the agency. Our employees and all of our constituencies would
have to be part of that change and, more important, have a role
in determining the nature of the changes and the methods for
their implementation. In short, we had to form partnerships and
work in a more open environment to make the needed changes.
During fiscal year 1996, we set in motion a public process
for determining what changes are needed. The product of that
effort is a comprehensive food safety strategy. We have already
begun making changes and will continue implementing them into
the next century. I would like to briefly describe a few of
those key changes and what they mean to the agency and to the
American public.
Pathogen Reduction and HACCP
The agency reached a milestone last July with publication
of the final rule on pathogen reduction and the hazard analysis
and critical control point system, known as HACCP, which will
directly target and systematically reduce harmful bacteria on
raw products, as well as other likely hazards. It will equip
FSIS inspection personnel with the scientific and regulatory
tools they need to ensure that slaughter establishments meet
specific standards, and that we will reinforce all of the
plants' responsibilities in terms of producing a safe product.
We began implementation of the rule a little more than a
month ago. On January 27 of this year, all plants had to have
plant-specific sanitation standard operating procedures, or
SOP's, to ensure that they are meeting their responsibility for
proper sanitation of facilities, equipment, and operations. In
addition, most slaughter plants were required to begin testing
for generic E. coli, to verify process control effectiveness in
preventing fecal contamination, the primary pathway for
pathogenic bacteria.
Next, all plants will develop a HACCP plan. HACCP systems
identify critical control points that address likely product
safety hazards.
HACCP implementation will be phased in according to plant
size. In recognizing the special difficulties that small plants
will face, we have initiated an aggressive program to provide
assistance to these small plants.
The HACCP rule established Salmonella performance standards
for chilled carcasses and for raw ground products. Through
their HACCP programs, plants will be required to achieve a
prevalence for Salmonella contamination that is below the
national baseline prevalence for each class of product. FSIS
will continually sample and test to verify compliance.
Now, by January 25 of the year 2000, all provisions of the
final rule will have been implemented. The final rule sets an
important framework for change in FSIS, but is by no means the
completion of our full strategy for change. We must now
envision our food safety and consumer protection goals in a
HACCP world.
FSIS Reorganization
We also realized that FSIS would need a new organization to
make the necessary changes to achieve our goals. In fiscal year
1996, we began implementing a sweeping reorganization that will
help us carry out our regulatory responsibilities in a more
scientific and efficient manner.
We are flattening and streamlining our management
structures both in headquarters and in the field and
consolidating four former independent field structures into
one. Our new structure will accommodate the agency's need to
function with fewer nonfrontline staff. As we streamline our
organization, we will increase the proportion of resources
deployed to the frontline work force, that is, our food
inspectors, in-plant veterinarians, our import inspectors,
laboratory personnel, and compliance officers. This should
allow us to handle industry growth without seeking additional
inspection resources through the budget process.
I am very proud that we have reduced the number of
headquarters units reporting to the Administrator from 13 to 7.
At the same time, we created a new Office of Public Health and
Science which will improve the public health focus of our
program. It will ensure that our policies meet the performance
goal of improving public health.
Over the next 2 years, we will reduce the number of field
management offices from 46 to 18 district offices and a
technical services center. I strongly believe that the 18 new
district offices will make supervisory spans of control more
manageable, and better balance the workload that we have.
A new Technical Services Center has been established, and
will open in Omaha, NE, this summer.
Food Safety Education Program
We cannot operate the science-based inspection system of
the future without first preparing our inspection work force
for these changes. We have begun training our inspection work
force to implement the new rule and started a new education
program at Texas A&M University to provide in-plant inspectors
with a more scientific foundation to work in a HACCP
environment. The program will focus on giving a basic
understanding of why food safety problems occur and why certain
inspection tasks must be done rather than simply showing
employees how to carry out the tasks.
We also have offered to reimburse employees for courses
that they would take on their own time near their work sites in
subjects such as statistics and microbiology.
Regulatory Reform
Another important area--we have initiated a comprehensive
review of our entire set of operations to reduce costs and
burden to industry and consumers without compromising public
health and safety. As part of this effort, I am pleased to
report that we are well underway with our efforts to eliminate
a number of regulatory provisions and convert others to
performance standards needed for HACCP.
In December 1995, we published an advance notice of
proposed rulemaking in the Federal Register describing our
regulatory reform strategy. We also invited comment on a list
of regulations that may need revision to be consistent with
HACCP.
Now, as a down payment, at that same time, we published
three other documents: a final rule streamlining our prior
approval system for labels, a proposal to cooperate more
closely with the Food and Drug Administration on ingredient
approvals, and a proposal to allow deviations from FSIS
standards of identity and composition to produce products with
reduced fat, cholesterol, and sodium.
Since then, we have published a proposal to eliminate prior
approval for blueprints, equipment, and certain partial quality
control programs, a proposal to shift from detailed command-
and-control requirements in existing regulations to performance
standards for certain meat and poultry products, and an advance
notice of proposed rulemaking to evaluate the need for meat and
poultry standards of identity and composition.
When our regulatory reform is completed, it will clarify
the proper roles of Government and industry in ensuring a safe,
wholesome food supply.
Emphasis on Public Health
We are also working with CDC and FDA in terms of public
health, and we have started a new sentinel site project in
cooperation with those agencies where we are looking at
developing procedures to collect better information in terms of
illnesses that are caused by various food products, including
meat, poultry, and egg products.
President's Food Safety Initiative
On January 25, the President announced the administration's
food safety initiative which includes an expansion of the
sentinel site project into the Nation's early warning system.
The current sentinel sites are an integral part of the early
warning system and the President is requesting funding for
FSIS, FDA, and CDC to increase the number of sites from five to
eight, to better equip and link the sites, and to make
available the state-of-the-art laboratory and electronic
technology that is needed.
In our 1998 budget request, we are asking for additional
funds to expand surveillance and population surveys to include
Campylobacter infections in the sentinel site project.
Egg Safety
Another area we are emphasizing is egg safety. We are
working to address the concerns you expressed in the fiscal
year 1997 committee report concerning the 1991 amendment to the
Egg Products Inspection Act establishing the average ambient
temperature for the transportation of eggs and egg products. We
are working closely with FDA to develop science-based
regulatory standards for proper cooling of shell eggs and are
looking at how best to implement the statutory shell egg
requirements in the context of a HACCP-based farm-to-table
strategy for eggs.
Food Safety Beyond the Plant
As we implement the pathogen reduction and HACCP rule in
inspected establishments, we have already begun exploring what
is needed to improve food safety after products leave the
establishments. We hear a lot from industry expressing concerns
that you need to address every place on the farm-to-table
continuum where hazards can develop and ensure that there are
appropriate controls.
On the retail level, we recognize that the primary
responsibility for overseeing food safety resides with State
and local governments. We fully support the forum provided by
the Conference for Food Protection for developing the best
model code for State adoption, and we are committed to
strengthening how the existing code addresses meat, poultry,
and egg products. We are also committed to providing
appropriate assistance to see that the Food Code is adopted
nationwide by the States.
New Technology
Another area I would like to emphasize is the importance of
new technology. Within FSIS through our field automation and
information management [FAIM] project which you have supported,
we are equipping our inspectors with computers to better allow
them to communicate, access, and apply technical regulations
and directives, and receive training on HACCP. The FAIM
initiative supports both the agency's field reorganization and
HACCP implementation.
I am pleased to say that all large plants will be covered
by FAIM as of January 1998, the effective date for the HACCP
rule in these establishments.
We are also using more rapid tests and automation in our
laboratories to speed the availability of test results, and we
are redesigning our training and continuing education programs
to teach our employees to take advantage of this new
technology.
We also are encouraging new technology outside the agency.
During the last several years, we have approved a number of new
technologies for use in plants to improve food safety,
including organic acids, trisodium phosphate, and steam
pasteurization. We will continue to help industry to test new
technology in plants. As a result of your support in the 1997
budget, we particularly are focusing on small plants to help
them adapt new technology to improve food safety and assisting
these small plants in developing alternative process controls
that meet HACCP standards.
1998 Budget Request
Now, we are encouraged by the importance placed on food
safety throughout USDA and support the initiatives proposed by
the Agricultural Research Service for preharvest and
postharvest food safety research and by the Cooperative State
Research, Education, and Extension Service for grant programs
to be carried out by the land grant universities.
To continue making food safety improvements and to
accomplish our goals, we are making a current law request of
$591.2 million, an increase of $17.2 million over the amount
provided in 1997. This proposal includes increases of $13.7
million for statutory pay increases, $1.1 million for the
increased costs of State inspection programs, and a net
increase of $2.4 million for program investments.
In fiscal year 1998, FSIS will continue to see progress in
terms of transforming the inspection process and will make no
requests for increase in staffing levels. We are requesting an
increase for pay costs to maintain the current inspection
staffing levels so that we can cover the slaughter lines and
the processing operations, and avoid disruption in production
processes.
In fiscal year 1998, FSIS proposes to build on the changes
and investments we have started over the last 2 years, and I am
confident that the results will improve both food safety and
our efficiency.
User Fee Proposal
Now, the administration believes that the collection of
user fees is essential to the successful long-term
implementation of the meat, poultry, and egg products
inspection reforms. Legislation will be proposed to recover
$390 million in new user fees to pay the cost of salaries and
benefits for personnel providing direct inspection services.
The user fee proposal would result in the industry paying about
70 percent of the total cost of the program.
For 1998, we are requesting an appropriation of $201
million to provide laboratory support for inspection, animal
production food safety investments, investments in new
inspection systems improvements, and program administration.
This proposal is intended to assure that resources are
available now and in the future to provide the level of
inspection necessary to meet the demand for such services,
including the growth in the industry, and to maintain consumer
confidence, with the balanced budget also held in proper
context. The overall impact of consumer prices as a result of
these fees is estimated to be less than one-half cent per pound
for meat and poultry production.
The Federal Government must share with industry, who
derives direct benefits from inspection, the fiscal
responsibility for providing services that are essential to
ensuring food safety. To accomplish a balanced Federal budget,
cost burdens must be shifted from taxpayers to those who
benefit directly from the provided services. The food industry
profits in the marketplace from the level of consumer
confidence provided by Federal inspection programs.
Additionally, the inspection programs provide a level playing
field in maintaining standards of safety, wholesomeness, and
labeling among individual industry entities competing for
market advantage.
That concludes my oral statement.
Prepared Statement
Senator Cochran. Thank you very much, Mr. Billy. We have
your complete statement, and it will be made part of the
record.
[The statement follows:]
Prepared Statement of Thomas J. Billy
Mr. Chairman and Members of the Subcommittee, I am pleased to
appear before you today to discuss the President's fiscal year 1998
budget request for the Food Safety and Inspection Service (FSIS). As
you may know, I became the Administrator of FSIS in October 1996, after
serving as Associate Administrator since October 1994.
During my years as a public servant, I have learned that the job of
ensuring food safety involves much of government and requires multiple
resources and authorities. I've seen food safety from several sides
now, having worked at the National Marine Fisheries Service with its
voluntary seafood inspection program, at the Food and Drug
Administration, and now at FSIS. I am convinced that the only way we
can serve the American public is through partnerships.
I believe also that Congress and FSIS are partners, striving toward
the same results--safer food and a more efficient use of taxpayer
dollars. I wish to acknowledge your role in supporting the 1997 budget
request and making an essential contribution to fulfilling our Federal
responsibilities in food safety. Now, I want to tell you about our role
in the partnership during the last year and how we plan to continue to
fulfill our responsibilities. I will also talk about the progress we
are making because of partnerships with key constituencies, including
consumers, the regulated industry, and our own employees.
current inspection activities
FSIS has a long, proud history of protecting the public health. Our
mission is to ensure that the Nation's commercial supply of meat,
poultry, and egg products is safe, wholesome, and accurately labeled,
as required by the Federal Meat Inspection Act, the Poultry Products
Inspection Act, and the Egg Products Inspection Act.
FSIS inspects approximately 5,900 plants that slaughter cattle,
swine, sheep, goats, horses, chickens and turkeys, and process eggs as
well as produce a wide range of processed products, including hams,
sausage, stews, pizzas, and frozen dinners.
In addition to inspecting animals before and after slaughter and
during processing, our inspectors provide samples to laboratories to
test for the presence of chemical residues. FSIS also sets standards
for a range of activities associated with the production of meat and
poultry products, including the use of equipment, sanitation
procedures, and product labeling.
In fiscal year 1996, our domestic inspectors examined approximately
88 billion pounds of meat and poultry and 3 billion pounds of egg
products for public consumption. While the inspection of domestically
produced meat, poultry, and egg products consumes the bulk of FSIS
resources, FSIS also recognizes the vital importance of inspecting
imported products. To ensure the safety of imported products, FSIS
maintains a comprehensive system of import controls to carry out the
requirements of the Federal meat, poultry, and egg products inspection
laws.
This system of import controls involves two major components. The
first is oversight to ensure that exporting countries have government
inspection controls equivalent to those of the United States. Such
countries must undergo a rigorous review process before they can become
eligible to export product to the United States, and periodic in-
country reviews, including on-site plant reviews, are carried out to
maintain such eligibility.
The second component is the reinspection of meat and poultry
products as they enter the United States. Reinspection is based on
statistical sampling and verifies that the foreign country's inspection
system is working. This reinspection is carried out by approximately 74
import inspectors covering some 160 active import inspection locations.
In 1996, nearly 2.4 billion pounds of imported meat and poultry
products were passed for entry into the United States.
FSIS provides assistance to State inspection programs and reviews
those programs to ensure that they are maintaining inspection
requirements at least equal to those of the Federal program.
Another part of the FSIS food safety program involves our
laboratories, which provide scientific and technical support to
inspection personnel through laboratory testing for chemical and
antibiotic residues, microbiological contamination, pathology
diagnostics, processed product composition, and economic adulteration.
FSIS currently operates three multidisciplinary laboratories to
carry out food safety and composition tests. During fiscal year 1996,
over 1.7 million analyses were performed on meat, poultry, and egg
product samples by federally operated laboratories.
FSIS conducts compliance and enforcement activities to address
situations where unsafe, unwholesome, and inaccurately labeled products
have been produced or marketed. FSIS investigates cases of
administrative, civil, or criminal violation of meat, poultry, and egg
product regulations and works in conjunction with the USDA Office of
the General Counsel and the Department of Justice to correct problems
and prosecute offenders when necessary.
In fiscal year 1996, 31,099 compliance reviews were conducted. As a
result of these reviews and other compliance activities, more than 22
million pounds of meat and poultry were detained for noncompliance with
meat and poultry laws. Forty recalls were conducted involving over 2.3
million pounds of product. In addition, 48 convictions were obtained
against firms and individuals for violations of the meat and poultry
inspection laws.
fundamental changes in fsis
In the last two years, FSIS has been working toward two major
goals: to make food safer by finding better ways to control pathogens,
and to make better use of our resources. We recognized that the Agency
would have to change its reliance on our traditional command and
control method of doing business and that this would require a
fundamental cultural change within FSIS. Our employees and all of our
constituencies would have to be part of the change and, more
importantly, have a role in determining the nature of the changes and
the method of their implementation. In short, we had to form
partnerships and work in a more open environment to make the needed
changes. During fiscal year 1996, we set in motion a public process for
determining what changes were needed. The product of that effort is a
comprehensive food safety strategy. We have already begun making
changes and will continue implementing them into the next century. I'd
like to describe a few of the key changes, how they came about, and
what they mean for the Agency and the American people.
pathogen reduction and haccp
The traditional FSIS system of organoleptic inspection has
limitations in dealing adequately with the problem of pathogenic
microorganisms--harmful bacteria--on raw meat and poultry products. It
cannot detect invisible bacteria such as Salmonella, E. coli O157:H7,
Campylobacter, and Listeria monocytogenes, which contribute
significantly to foodborne illness in the United States.
The Agency reached a milestone last July with publication of the
final rule on Pathogen Reduction and the Hazard Analysis and Critical
Control Point system, known as HACCP, which will directly target and
systematically reduce harmful bacteria on raw products, as well as
other likely hazards. It will equip FSIS inspection personnel with the
scientific and regulatory tools they need to ensure that slaughter
establishments meet specific standards of food safety performance in
terms of such bacteria, and will also reinforce all plants'
responsibilities for safe product. Let me briefly describe the major
provisions of the Pathogen Reduction and HACCP rule.
We began implementation of the rule a little more than a month ago.
On January 27, all plants had to have plant-specific Sanitation
Standard Operating Procedures (SOP's) to ensure that they are meeting
their responsibility for proper sanitation of facilities, equipment,
and operations. The written sanitation SOP's must describe the specific
measures plant management will put in place to prevent direct product
contamination. In addition, most slaughter plants were required to
begin testing their products for generic E. coli as an indicator of
process control effectiveness for preventing fecal contamination, the
primary pathway for pathogenic bacteria.
All plants will develop a HACCP plan based on the seven principles
established by the National Advisory Committee on Microbiological
Criteria for Foods. HACCP systems identify critical control points that
address likely product safety hazards, rather than quality or economic
adulteration problems.
HACCP implementation will be phased in according to plant size.
Large plants with 500 or more employees must have plans in place on
January 26, 1998. For small plants with 10 to 499 employees, the
implementation date is January 27, 1999. For very small plants, with
fewer than 10 employees or annual sales of less than $2.5 million, the
implementation date is January 25, 2000.
In recognizing the special difficulties that small plants will
face, we have initiated an aggressive program to provide assistance to
these plants. We will provide a Guidebook for the preparation of HACCP
Plans, a Hazards and Preventive Measures Guide, and model plans for
various product categories. We have held special constituent meetings
to determine what specific, tailored assistance small plants will need.
FSIS is assessing those needs and developing assistance tools that are
not presently available. Current plans call for demonstration projects
for HACCP in small plants. Additionally, USDA's Fund for Rural America
will complement FSIS efforts by providing research and extension
assistance in rural communities to help small and very small plants
assess and meet their training and facilities needs in order to
implement HACCP.
The HACCP rule established Salmonella performance standards for
chilled carcasses and raw ground products. Through their HACCP
programs, plants will be required to achieve a prevalence of Salmonella
contamination that is below the national baseline prevalence for each
class of raw product, as reflected in the FSIS baseline surveys. FSIS
will continually sample and test to verify compliance.
By January 25, 2000, all provisions of the final rule will have
been implemented. The final rule sets an important framework for change
in FSIS, but by no means is it the culmination of our strategy for
change. We must now envision our food safety and consumer protection
goals in a HACCP world.
changes in the fsis organization
We realized early on that FSIS would need a new organization to
make the changes necessary to achieve our goals. In fiscal year 1996,
we began implementing a sweeping reorganization that will help us carry
out our regulatory responsibilities in a more scientific and efficient
manner. We sought input on the changes from our constituencies and our
employees at all grade levels throughout the Agency. As a result, the
reorganization is based on a top-to-bottom review of the Agency's
regulatory roles, resource allocations, and organizational needs.
We are flattening and streamlining management structures both at
headquarters and in the field, and consolidating four former
independent field structures into one. Our new structure will
accommodate the Agency's need to function with fewer non-frontline
staff. As we streamline the organization, we will increase the
proportion of resources deployed to the frontline work force--food
inspectors, in-plant veterinarians, import inspectors, laboratory
personnel, compliance officers, and first-level supervisors.
I am very proud that we reduced the number of headquarters units
reporting to the administrator from 13 to 7. At the same time, we
created a new Office of Public Health and Science, which will improve
the public health focus of our program. It will ensure that our
policies meet the performance goal of improving public health. We also
created a new Office of Policy, Program Development and Evaluation
which will centralize all policy and rulemaking functions in the
Agency.
Over the next two years, we will reduce the number of field
management offices from 46 to 18 district offices and a Technical
Services Center. I strongly believe that the 18 new district offices
will make supervisory spans of control more manageable and better
balance the workload.
A new Technical Services Center has been established and will be
opened in Omaha, Nebraska, this summer. It will provide technical
expertise and guidance to inspection personnel on the interpretation,
enforcement, and application of domestic and import regulations,
policies, and systems. We expect that the Center will enable FSIS to
provide much quicker technical assistance and far more consistency in
inspection across the country.
regulatory reform
FSIS is committed to comprehensive regulatory review of our entire
operations to reduce cost and burden to industry and consumers without
compromising public health and safety. As part of this effort, I'm
pleased to report that we are well underway with our efforts to convert
our regulations to the performance standards needed for HACCP. In
December 1995, we published an advance notice of proposed rulemaking in
the Federal Register describing our regulatory reform strategy. We also
invited comment on a list of FSIS regulations that may need revision to
be consistent with HACCP. At the same time, we published three other
documents: a final rule streamlining our prior approval system for
labels; a proposal to cooperate more closely with the Food and Drug
Administration on ingredient approvals; and a proposal to allow
deviations from FSIS standards of identity and composition to produce
products with reduced fat, cholesterol, and sodium.
Since then, we have published a proposal to eliminate prior
approval for blueprints, equipment, and certain partial quality control
programs; a proposal to shift from detailed command and control
requirements in existing regulations to performance standards for
certain meat and poultry products; and an advance notice of proposed
rulemaking to evaluate the need for meat and poultry standards of
identity and composition.
When our regulatory reform is completed, it will clarify the proper
roles of government and industry in ensuring safe food. It will focus
FSIS resources on preventing harmful bacteria and other hazards in meat
and poultry products. And it will make the Agency more responsive to
all our constituencies.
emphasis on public health
Our major goal is an improvement in the safety of meat, poultry,
and egg products that leads to fewer people getting sick. As you know,
the Government Performance and Results Act of 1993 directs Federal
agencies to measure the results of their programs in terms of societal
impacts. Year after year, we have been able to tell you how many pounds
of product we inspected and how many laboratory tests we conducted.
What we now need to tell you is how these programs make a difference to
public health.
To assess the public health impact of a modernized inspection
system, FSIS began working with the Centers for Disease Control and
Prevention (CDC) and the Food and Drug Administration (FDA). Past
estimates of the annual incidence of foodborne illness cover a very
broad range and clearly indicate the need for more accurate data,
including the source and cause of the problem. Limited regional studies
have clearly implicated meat and poultry as vehicles for several
foodborne pathogens; however, we need more precise national data.
FSIS is working with CDC and FDA to monitor five foodborne illness
``sentinel sites.'' These sites were established to estimate the
national incidence of the major foodborne diseases and to explore what
relationships may exist between specific pathogens and the types of
meat, poultry, and other food products associated with them. On January
25, the President announced the Administration's Food Safety
Initiative, which includes an expansion of the sentinel site project
into the Nation's Early Warning System. The current sentinel sites are
an integral part of the Early Warning System, and the President has
requested funding for FSIS, FDA and CDC to increase the number of sites
from five to eight, better equip and link the sites, and make available
state of the art laboratory and electronic technology.
In February 1997, the sentinel sites provided FSIS with preliminary
data on the occurrence of diarrheal illness in 1996 due to bacterial
foodborne pathogens, including E. coli O157:H7, Salmonella,
Campylobacter, Yersenia, Listeria, and Vibrios. And through case-
control studies, which are in progress, the sites will provide data to
determine the proportion of culture-confirmed cases of illness due to
E. coli 0157:H7 and Salmonella serogroups B and D attributable to
eating meat and poultry products; and through population surveys, we
will learn more about how people handle and prepare food. In our 1998
budget request, we are asking for additional funds to expand
surveillance and population surveys, and to include Campylobacter
infections in the Sentinel Sites case-control study.
With sentinel site information, FSIS can review HACCP programs and,
where appropriate, trigger changes to prevent future outbreaks of
foodborne illness. The sites will provide critical human health
information to support risk assessments to determine whether pathogen
performance criteria and standards are effectively reducing the
incidence of foodborne illness.
As you know, we were directed by you in the fiscal year 1997
Committee Report to report on the incidence of foodborne illness in
cooperation with CDC. The report found that there were 7,259 laboratory
confirmed cases of diarrheal illness in calendar year 1996 in the five
sites. Also, Campylobacter was the most frequently isolated bacterium,
with Salmonella second, Shigella third, and E. coli fourth. CDC will
officially close its books on 1996 at the end of March and we will
provide updated information to you when final figures are available.
We are continuing our nationwide baseline studies to measure the
levels of pathogens that currently exist on meat and poultry products.
With this and other information, we expect to know earlier in the
process if a potential public health problem exists and be able to
carry out risk assessments, as required.
As a regulatory agency focused on public health, we must be able to
rapidly adjust our policies and procedures to new information and
emerging public health risk. With our enhanced front-line capability
under the new organizational structure, we will be better able not only
to address immediate public health problems, but to adjust our
regulatory policies and procedures as necessary.
changes in inspection
With implementation of the final rule on Pathogen Reduction and
HACCP, there are additional opportunities to improve the way we carry
out inspection activities, to improve both food safety and allocation
of resources. We believe the implementation of HACCP will permit us to
make improvements in the inspection process and redeploy some of our
current in-plant inspection work force both to HACCP verification
tasks, and to new tasks outside of traditional in-plant settings in
furtherance of our farm-to-table strategy.
I also strongly believe that the final HACCP rule will provide much
greater consistency in meat and poultry inspection across the country
and between meat and poultry inspection. But it will be a consistency
based on a common, consistent regulatory framework. It will not be
based on the command and control philosophy of the past.
We are aware that there are activities we carry out within plants
as part of the inspection process that have limited value in terms of
public health protection or meeting other consumer protection
responsibilities. We also know that there are important public health
tasks we do not carry out under the current system of inspection. We
are planning demonstration projects to explore improved methods for
conducting inspection, and will follow a public process to obtain input
from all stakeholders.
egg safety
Egg safety is another important area that deserves our attention.
One emerging issue regarding the safety of eggs relates to phage-type 4
Salmonella enteritidis (Se).
We are monitoring the situation, and our concerns are growing.
Through reports from the CDC, we know that human illnesses caused by
phage-type 4 Salmonella enteritidis are increasing and spreading
geographically. The first human cases of salmonellosis due to
Salmonella enteritidis phage-type 4 occurred in California and Texas.
It has now been found in Utah and other parts of the U.S.
The good news is that studies in U.S. broilers to date have not
shown an increase in Se following the detection of Sephage-type 4 in
this country. We believe that the steps we are taking now to reduce Se
in eggs are important regardless of the type of Se we are dealing with;
but we need to take some additional steps based on information that
suggests phage-type 4 Se may be an invasive infection in poultry.
We have allocated funds to perform phage-typing of Se poultry
isolates taken from our pathogen reduction testing program under HACCP.
As I stated earlier, FSIS will conduct a Salmonella testing program
under HACCP. We are also considering conducting a sampling program for
liquid eggs and spent hens to monitor national trends for phage-type 4
Se.
We are working to address the concerns you expressed in the fiscal
year 1997 Committee Report concerning the 1991 amendment to the Egg
Products Inspection Act establishing an average ambient temperature for
the transportation of eggs and egg products. We plan to work closely
with FDA to develop science-based regulatory standards for proper
cooling of shell eggs and are looking at how best to implement the
statutory shell egg requirement in the context of our HACCP-based farm-
to-table food safety strategy for eggs.
In close cooperation with the Food and Drug Administration (FDA),
FSIS has undertaken a number of activities to address shell egg safety.
With FDA, we conducted a conference in November to receive information
on temperature control interventions and verification techniques in the
transportation and storage of meat, poultry, seafood, eggs and egg
products. We are conducting a science-based, quantitative risk
assessment for shell eggs and egg products, and are talking with
industry regarding steps they might take voluntarily to address the
problem of Salmonella enteritidis. FSIS and FDA are also considering
ways to solicit information through the rulemaking process on issues of
comprehensive food safety in shell eggs from production to food
preparation. We plan to address this issue in the same public way we
have addressed meat and poultry safety over the past few years, and
will base actions on available science. In addition to working on shell
egg safety with FDA, we are evaluating options for proposed regulations
to mandate HACCP for plants that process shell eggs.
food safety beyond the plant
As we implement the Pathogen Reduction and HACCP rule in inspected
establishments, we have already begun exploring what is needed to
improve food safety after products leave establishments. Opportunities
to improve food safety exist all along the farm-to-table chain and we
have an obligation to explore how best to take advantage of these
opportunities by working with other Federal, State and local regulatory
agencies.
On November 22, FSIS and FDA published in the Federal Register an
advanced notice of proposed rulemaking to seek input on ways to improve
food safety during transportation and storage. We are seeking comment
on how the Federal government should be involved in this area. The
November conference we sponsored with FDA on time, temperature, and
transportation identified desirable and feasible temperature control
interventions and verification techniques to improve food safety.
On the retail level, we recognize that the primary responsibility
for overseeing food safety resides with State and local governments. We
fully support the forum provided by the Conference for Food Protection
for developing the best model code for State adoption. We are committed
to strengthening how the existing Code addresses the meat, poultry, and
egg products. We also are committed to providing appropriate assistance
to see the Food Code adopted nationwide.
changes in the way we communicate with all constituencies
When we began the changes at FSIS, we knew that HACCP could greatly
improve food safety by identifying and controlling hazards before
products reach consumers. HACCP principles have already been proven
effective. However, simply imposing a new regulatory system over the
old one would never work. To be successful, the Agency had to enlist
the full participation of consumers, the meat and poultry industry, and
all other constituencies.
FSIS far exceeded the requirements of the Administrative Procedures
Act in reaching out to involve all stakeholders in this program. In
addition to normal communication channels, such as notices in the
Federal Register, letters were sent to thousands of organizations
representing consumers, the industry, the public health community,
academia, and other Federal, State, and local agencies. The Agency held
seven information briefings on the proposal throughout the country, a
two-day hearing in Washington, D.C. and three Scientific and Technical
Conferences. The commenters raised new issues, questioned traditional
wisdom, and related personal experiences. To share the new information,
FSIS held another six meetings, this time focusing on specific issues
raised during the comment process, culminating in a Food Safety Forum
hosted by Secretary Glickman.
FSIS made substantial changes to the proposed HACCP regulation,
based on the results of this outreach effort. For instance, the
``indicator organism'' for testing for basic safety was changed from
Salmonella to E. coli and the testing requirements were changed to be
much less burdensome on small plants.
After the final rule was published in July 1996, FSIS held more
than a dozen additional meetings, in Washington, D.C. and across the
country, to explain how the regulation would be implemented and to
explain specific aspects, as well as identify the assistance available
to help small plants implement HACCP. Again, we encouraged suggestions
to help us fine tune implementation of the regulation.
For FSIS, a significant achievement was the process for consensus-
building among competing and sometimes combative interests and a new
openness to ideas. Naturally, all FSIS constituencies did not agree on
every detail of the HACCP regulation and its implementation. However,
they universally praised the open process that considered all
viewpoints and brought together divergent constituencies that had
believed themselves forever locked in opposition. It was the first time
that such a variety of FSIS constituencies discussed their differing
viewpoints face to face, gaining an understanding of each others' needs
and concerns. For instance, the mother of a child who died from E. coli
O157:H7 after eating a hamburger talked directly to the owner of a
small meat plant who questioned whether he could ever guarantee that
meat was free of pathogens. A union official, a plant manager, and a
consumer advocate all agreed that inspectors need more scientific
training. Many constituencies have asked that FSIS continue to hold
public meetings, on all aspects of the Agency's work. We will do so.
During the process, we reached out to our employees in ways that we
had not tried before. Now, we are investing in our employees. We cannot
operate the science-based inspection system of the future without first
preparing our inspection work force for these changes. We have begun
training the inspection work force to implement the new rule and
started a new education program at Texas A&M University to provide in-
plant inspectors with a more scientific foundation to work in a HACCP
environment. The program will focus on giving a basic understanding of
why food safety problems occur and why certain inspection tasks must be
done, rather than simply showing employees how to carry out such tasks.
In addition, we will reimburse employees for the cost of courses they
take on their own time near their work sites in subjects such as
statistics and microbiology.
forming new partnerships
We are forming new partnerships with state and other government
agencies and with academia, to ensure that we have the best information
on which to base policy decisions. The Sentinel Sites project that I've
already discussed is one such effort.
For the past couple of years, we have been working closely with FDA
and State government agencies to address food safety gaps in the
transportation and retail areas.
Our new food safety research agenda was developed cooperatively by
the Food Safety Research Working Group, which is composed of scientists
with a broad base of expertise in food safety and public health issues
from USDA, FDA, CDC, the National Institutes of Health, and the
Department of Defense. The agenda recognizes that it will require the
combined efforts of government, industry, and academia to meet the need
for human health research. Further, we must leverage our limited animal
production food safety resources with producer groups, academia,
States, and other Federal agencies to identify improvement
opportunities in animal production.
FSIS is publishing three notices in the Commerce Business Daily to
indicate our intent to work with animal producers, scientists in
academia and government agencies at both the Federal and State levels
to develop and foster voluntary food safety measures that can
reasonably be taken on the farm, through marketing channels and during
pre-slaughter preparation to decrease public health hazards in animals
presented for slaughter.
new technology
New technology will play a vital role in the new FSIS, both within
and outside the Agency.
Within FSIS, through the Field Automation and Information
Management (FAIM) project which you have supported, we are equipping
our inspection work force with computers to better allow them to
communicate, access and apply technical regulations and directives, and
receive training on HACCP. The FAIM initiative supports both the
Agency's field reorganization and HACCP implementation. All large HACCP
plants will be covered by FAIM as of January 1998, the effective date
of the HACCP rule for these plants.
We are using more rapid tests and automation in our laboratories to
speed the availability of test results, and we are redesigning our
training and continuing education programs to teach our employees to
take advantage of this technology.
We will encourage new technology outside of the Agency. During the
last several years we have approved a number of new technologies for
use in plants to improve food safety--including organic acids,
trisodium phosphate, and steam pasteurization. We will continue to help
the industry to test new technology in plants. As a result of your
support on the 1997 Budget, we particularly are helping small plants
adapt new technology to improve food safety and assisting small plants
in developing alternative process controls that meet HACCP standards.
international changes
Our changes in regulation extend to imported products as well. The
inspection systems of foreign countries must be equivalent to the U.S.
system before product can be imported into the United States. Nations
wishing to export to the United States had until January 27 to advise
us they would implement the January 27 provisions of the Pathogen
Reduction and HACCP regulation into their inspection systems.
Otherwise, their product will not be allowed entry.
Working through the Codex Alimentarius Commission, we will continue
to stress the role of science in international standard-setting and
actively participate in the process.
1998 budget request
We are encouraged by the importance placed on food safety
throughout USDA and support the initiatives proposed by the
Agricultural Research Service for Pre-harvest and Post-harvest food
safety research, and by the Cooperative State Research, Education, and
Extension Service for grant programs to be carried out by land grant
universities.
To continue making food safety improvements and to accomplish our
goals, we are making a current law request of $591.2 million--an
increase of $17.2 million over the amount provided for 1997. This
proposal includes increases of $13.7 million for statutory pay
increases, $1.1 million for the increased costs of State inspection
programs, and a net increase of $2.4 million for program investments.
In fiscal year 1998, FSIS will again continue the process of
transforming the inspection process with no requested increase in
staffing levels. To support our partnership with employees, we are
requesting an increase for pay costs to maintain current inspection
staffing levels.
In fiscal year 1998, FSIS proposes to build on the changes and
investments we have begun during the last two years. I am confident
that the results will improve both food safety and FSIS' efficiency.
Let me describe the initiatives for program investment covered by this
budget request.
1998 budget initiatives
Changes in the FSIS organizational structure, particularly in field
support, have been driven largely by the need to operate more
efficiently as we carry out our regulatory responsibilities in a more
scientific manner under the HACCP regulation. The first two initiatives
address the need for additional resources to facilitate completion of a
streamlined field management structure and to make this new
organization fully functional to manage its changing responsibilities.
We are requesting an increase of $1,000,000 for relocation costs to
complete the restructuring process. Up to 75 employees will be
transferred to the new district offices and the Technical Services
Center during fiscal year 1998. Due to the cost of mandatory salary
increases, inflation, and relocations in fiscal year 1997, the Agency
will need an increase of $1 million to begin a two-year effort to
complete the restructuring of FSIS field management.
An additional $1,250,000 is requested to begin equipping field
staff in the new district offices and Technical Services Center with
upgraded automated data processing (ADP) and telecommunications
technology in order to link the field, headquarters, and plants as we
streamline our organizational structure. We need to maximize the
productivity of a finite work force charged with managing an increased
workload. As I mentioned earlier, FSIS will consolidate 46 program
field offices into 18 district offices, a Technical Center and two
administrative centers, with a major reduction in support personnel.
The consolidation will continue through fiscal year 1999. In fiscal
year 1998, funds are needed to provide updated ADP and
telecommunications equipment to support local area network (LAN) and
wide area network (WAN) capabilities.
As the importance of international trade increases, so has the
workload of the Office of U.S. Codex in FSIS, which carries out
government-wide responsibilities. The requested increase of $100,000 is
needed to provide for increased staffing support and to meet the USDA
commitment to provide one-third of the cost for a meeting of the
reactivated Codex Committee on Fresh Fruits and Vegetables, with the
balance of funding for this meeting being provided by other Federal
agencies.
As part of the President's Food Safety Initiative and our farm-to-
table strategy, we are requesting an increase of $565,000 to provide
training in HACCP principles for State and local food regulatory
officers responsible for both meat and poultry inspection and
distribution and retail compliance. During the past several years,
consumers have come to demand convenient and easily-prepared meat and
poultry food products. This change has resulted in retail stores and
restaurants using manufacturing techniques previously used only in
inspected establishments. In addition, traditional processes, such as
meat grinding, that were once considered ``low risk'' are now
recognized as a ``significant risk'' to food safety.
We believe that the State and local officials who regulate food
safety at the retail and restaurant level must receive HACCP-related
training that is comparable to what our inspectors receive. The
requested increase is needed to begin a two-year program to train FSIS
and State food safety regulators who will then train State, county and
city inspectors across approximately 3,000 government agencies.
Reflecting the emphasis we place on improving public health as we
work in partnership with other agencies, we request an increase of
$500,000 to support expanded pathogen data analysis in the CDC's Food
Safety Early Warning System. This initiative will enable FSIS to get a
more complete picture of the incidence of foodborne illness by
including data on the high priority pathogen, Campylobacter. CDC has
shared preliminary data which indicate that Campylobacteris the most
common foodborne pathogen and the requested increase is needed so that
we can determine the impact of Campylobacter on public health and
identify appropriate follow-up actions.
Additional savings of $1,000,000 in non-inplant field management
staffing is expected to result from continued implementation of the
Field Automation and Information Management (FAIM) Project.
user fees
The Administration believes that the collection of user fees is
essential to the successful long-term implementation of meat, poultry,
and egg products inspection reforms. Legislation will be proposed to
recover $390 million in new user fees to pay for the cost of salaries
and benefits for personnel providing direct inspection services. The
user fee proposal would result in the industry paying about 70 percent
of the total cost of the program. For 1998, we are requesting an
appropriation of $201 million to provide laboratory support for
inspection, animal production food safety investments, investments in
new inspection system improvements designed to enhance safety and
productivity, and program administration. This proposal is intended to
assure that resources are available now and in the future to provide
the level of inspection necessary to meet the demand for such services
and maintain consumer confidence, within the balanced Federal budget
context. The overall impact on consumer prices as a result of these
fees would be less than one-half cent per pound of meat and poultry
production.
The Federal Government must share with industry, who derives direct
benefits from inspection, the fiscal responsibility for providing
services that are essential to ensuring food safety. To accomplish a
balanced Federal budget, cost burdens must be shifted from taxpayers to
those that benefit directly from the provided services. The food
industry profits in the marketplace from the level of consumer
confidence provided by the Federal inspection programs. Additionally,
the inspection programs provide a level playing field in maintaining
standards of safety, wholesomeness and labeling among individual
industry entities competing for market advantage.
conclusion
Mr. Chairman, this concludes my prepared statement. Thank you for
the opportunity to testify on how FSIS is meeting its responsibilities
in the partnership that we have with Congress to improve the safety of
meat, poultry, and egg products, and thereby reduce the incidence of
foodborne illness. I will be happy to answer any questions that you or
other members of the Subcommittee may have.
Fiscal Year 1996 Funds for In-Plant Inspection
Senator Cochran. Mr. Billy, there was one thing that I
wanted to ask you at the outset, and then I will yield to my
colleagues for any questions that they have.
The Omnibus Consolidated Rescissions and Appropriations Act
of 1996 made $363 million available for salaries and benefits
of in-plant inspection personnel, unless the Secretary
certified to the House and Senate Appropriations Committees
that a lesser amount would be adequate to fully meet in-plant
inspection requirements for the fiscal year.
A letter was received from the Secretary on January 2,
1997, saying that the FSIS had spent $354 million of the 1996
appropriation on the salaries and benefits of its inspection
work force, and that ``the employment adjustments, subsequent
to the April 26, 1996, statute, enabled FSIS to avoid
disruptions in inspection service for the balance of the
year.''
I am told that several poultry plants in the Southeast have
had to shut down inspection lines due to the shortage of online
inspectors, and that some of these shutdowns have resulted in
the destruction of poultry.
What is meant by the statement in that letter? And, how
many FSIS full-time and intermittent inspectors are on the
payroll to adequately meet in-plant inspection requirements?
Mr. Billy. Mr. Chairman, I do not have the specific
information, but I would be happy to provide that for the
record. Let me give you a general response.
We were committed to providing the services that are needed
by slaughter plants and processing plants in terms of
inspection coverage. Because of the processes of balancing
expenditures in terms of the cost of salaries and benefits and
at the same time making the appropriate investments that are
talked about in terms of the HACCP approach and introducing the
new technology into the agency, we worked very hard to maintain
an appropriate balance and minimize to the maximum extent
possible any impact on the plants.
So, that continues to be our goal. We are in the process of
continually hiring new inspectors to replace those that choose
to leave, and as a result of that, I think we are doing a good
job of providing the services as required under the law.
[The information follows:]
In the first part of fiscal year 1996 in-plant inspection
employment dropped and, due to recruitment difficulties, did
not rebound until spring. To assist in recruitment, FSIS
removed the cap on other than permanent full-time employment to
cover all requests for on-line inspection, and increased
permanent full-time employment. Permanent full-time employment
increased from its lowest level of 7,347 in January 1996 to
7,531 at the end of September 1996. In addition, by the end of
fiscal year 1996 FSIS had the full-time equivalent of 539 other
than permanent full-time employees, which was an increase of 74
over fiscal year 1995.
Senator Cochran. Do you anticipate any shutdowns being
required under the budget request that you are submitting to
the committee?
Mr. Billy. No, sir; this will enable us to provide full
service to the plants as they need it.
HACCP Implementation and Inspection Alternatives
Senator Cochran. To what extent is HACCP permitting a
downsizing of the inspectors that are located in the plants for
individual inspections of poultry?
Mr. Billy. Our first focus is to implement HACCP in the
plants. The first wave of plants to have HACCP in place will be
in January 1998. That will be a total of approximately 500
plants, the largest plants. The remainder of the roughly 5,500
plants will implement HACCP over the succeeding 2 years. So, we
are really on the front edge of implementing HACCP throughout
the industry.
Tied to that implementation, where the plants set up a
HACCP plan and implement it and we verify that they are
following their HACCP plan, we have announced our intent to
publish a notice to reevaluate how we provide inspection
coverage, particularly focused on slaughter plants, and through
a public process so that all of the stakeholders have an
opportunity to participate, explore alternative inspection
strategies for meeting the mandate in the law, carcass-by-
carcass inspection, and assuring that the products produced are
safe and wholesome. This will all be done under the context of
a HACCP approach.
Through that process, we will then implement pilot studies
in various plants--already a number of plants have volunteered
to participate--where we will explore alternative staffing
strategies that both meet the requirements and assure that the
product produced is safe and wholesome.
If in fact those pilot studies demonstrate that alternative
approaches under a HACCP basis are effective, we would then
propose to do a rulemaking to modify our current requirements
in terms of how we approach inspection and slaughter
facilities. We believe that this will result in an opportunity
to free up a number of inspectors which we intend to assign in
distribution areas beyond the plants. This is an area that has
been emphasized by both industry and the consumer community in
terms of addressing the food safety hazards beyond the
slaughter and processing plants.
HACCP-Based Assistance
Senator Cochran. Are you going to move into the restaurants
and retail outlets or what?
Mr. Billy. No, sir; it is unrealistic for us to consider
that. There are approximately 1 million retail establishments,
and they are under the jurisdiction of State and local
authorities. What we think we can do is provide better
technical assistance to the States in terms of how to approach
what they do on a HACCP basis, develop new standards, and
perhaps provide some training as well to assist the States and
the local authorities in ensuring that meat, poultry, and egg
products are handled effectively at the retail level.
Transition to HACCP
Senator Cochran. I read your statement and on page 17, I
notice that you compared the final HACCP rule with the command-
and-control philosophy of the past and suggested that once the
rule is implemented and in place, we will have a modern, up-to-
date, new regulatory framework.
One thing that concerns me is the suggestion that you keep
talking about the command-and-control philosophy of the past.
It seems to me that we are still in the past in terms of the
philosophy. Is that an incorrect observation?
Mr. Billy. I think, Mr. Chairman, that we are in a period
of transition. It is a fact that there exist in our rules
currently a number of command-and-control type requirements
that need to be modified. I outlined in my statement examples
of where we are proceeding to do that and either eliminate them
or shift them to performance standards.
Regulatory Reform
Senator Cochran. I hear talk about it and everybody is
saying that there is change occurring, but I do not know what
it is. I cannot tell from reading your statement what it is and
I do not hear from out in the field what it is. We talk about
this new system and that changes are being made, and your
statement is evidence of what I am talking about: ``We are
aware that there are activities we carry out within plants as
part of the inspection process that have limited value in terms
of public health protection or meeting other consumer
protection responsibilities.''
My question is then why are you doing them?
Mr. Billy. They reflect current and longstanding regulatory
requirements that we are in the process of changing. Let me
give you two examples.
One is for years the agency has required plants to submit
blueprints, equipment requirements, process control plans to
the agency for prior approval. We have published a proposal to
eliminate those kinds of requirements.
I was struck by the comparison between my experience at the
Food and Drug Administration and FSIS now where the rest of the
food industry seems to be able to design and build plants and
select equipment without the Government prior-approving every
step that they take, and I believe we can eliminate those
requirements.
The interesting thing is, when we put out the rulemaking
proposal to do that, the majority of the comments we got back,
primarily from the industry, say do not eliminate those
requirements; we are comfortable with them. But I still believe
it is the right thing to do, to stop having those kinds of
command-and-control type requirements.
Another example is requirements for the production of
various types of products. I will use the example of roast beef
where if you look at our existing regulations, they spell out a
several-step process which every plant must follow to produce
that product rather than simply establishing the end result
requirement. Here is the food safety requirement you have to
meet. It is up to you decide how you produce this product to
give the industry more flexibility.
We have similarly proposed in a proposed rule to eliminate
that several-step requirement and strip that right out of the
regulations so that plants have more flexibility to do it, but
to assure at the same time that the food safety objective is
met.
And that is the process that we are moving on to change
these kinds of requirements, but we must do it through a
rulemaking process. That is why I mentioned several examples in
my prepared statement that we are proceeding through this
process and we will complete it. It is important to us to
eliminate those kinds of command-and-control requirements and
to fundamentally rely on HACCP as the basis for addressing food
safety.
Senator Cochran. Thank you.
Senator Bumpers.
Pathogen Reduction and HACCP
Senator Bumpers. Pursuing Senator Cochran's line of
questioning, Mr. Billy, what percentage reduction in bacteria
on a chicken carcass do you get with HACCP as opposed to the
old method? I am for it. I do not mean to be offensive.
Mr. Billy. No; I understand.
What we have proposed to do in the HACCP and pathogen
reduction rule is to require with the implementation of HACCP
that all plants meet the national prevalence for Salmonella.
Senator Bumpers. What does that mean, national prevalence?
Mr. Billy. National prevalence? Sort of the national
average that the industry is now accomplishing. What that means
is that those plants that are not currently performing at that
level will have to improve their process control to meet that
national average, if you will. That is the step that is
contained in the new rule to provide for improvement in terms
of the presence of Salmonella and other similar pathogens on
poultry or meat products.
Senator Bumpers. That is going to be a shifting target, is
it not? Because as you implement this program between now and
the year 2002?
Mr. Billy. The year 2000.
Senator Bumpers. The average is going to continue to climb.
So, a plant that might be in compliance in 1998--because the
improvement is going to continue to climb, somebody that is in
compliance in 1998 may not be in compliance in the year 2000 or
2002. Do you follow the question?
Mr. Billy. Yes, I do.
To address that question, what we are planning to do is to
conduct new baseline surveys over the course of a year--you
need to do it over the course of a year to get the seasonal
variation--and measure, if you will the performance of the
industry with the implementation of HACCP. If it looks like, in
fact, what you have laid out in your scenario is the case, then
we would consider whether we would propose through rulemaking
to modify the performance standards we now have in place to
reflect those kinds of improvements. So, that is the strategy
that is contained in our new rule.
Senator Bumpers. Well, let me ask the first question in a
slightly different way. How much improvement, if you can tell
me, as a percentage will we see under HACCP in the year 2002
than we experienced under the old inspection system?
Mr. Billy. I think that we will see significant improvement
because with the performance standards for Salmonella and the
E. coli testing that are required in the new regulation,
slaughter plants in particular for the first time will be using
microbiological testing to monitor their process control. That
kind of information is not available through the current
inspection approach, where we are using visual inspection to
monitor for fecal contamination. But you cannot see the
bacteria, so shifting to this kind of microbiological testing
regime, we think, will give us real data to show progress and
show the kind of reductions that you are asking about.
I am not able to tell you what we will be able to
accomplish by the year 2000. We are only now implementing this
new system. There is a lot of information out there to show
that HACCP works very well, and I think many in the industry
are already using HACCP because of the advantages that it
provides. So, I think we will see very good progress in terms
of reducing the levels of pathogens on products coming out of
slaughter plants.
Cost of HACCP
Senator Bumpers. What kind of economic burden, if any, does
it place on the industry to implement HACCP?
Mr. Billy. We provided in the final rule a detailed
economic cost impact analysis, and it will cost the industry
several hundred million dollars to implement HACCP and pathogen
reduction over the full course of the 3\1/2\-year
implementation period.
Senator Bumpers. You are talking about the implementation.
Is that also true on a continuing basis? I assume it is going
to cost them money to implement it, but is the cost of
inspection, once it is implemented, higher than the old system
as far as the industry is concerned?
Mr. Billy. The cost of inspection? No, sir; it will not be
higher.
Senator Bumpers. It will not be higher?
Mr. Billy. No.
Senator Bumpers. Has the Department done any studies as to
consumer confidence on the poultry industry so far as pathogens
and bacteria are concerned?
Mr. Billy. I am not aware, sir, of any such surveys. I can
say this, that there was a very wide support for the final
HACCP and pathogen reduction rule. Certainly those that
represent the public, the consumers, have embraced it and
believe that it is a very positive step forward, and have so
indicated in their publications and statements. So, that is the
indirect measure.
Senator Bumpers. Does FSIS have any follow-on inspection
system in mind? Are you working on anything? HACCP is not going
to be pertinent--you are not going to eliminate all the
bacteria.
Let me ask you this question. Under the old system, what
percentage of poultry that came through a processing plant had
bacteria on it?
Mr. Billy. Well, all poultry would have bacteria on it. If
you are focusing on the pathogens, the things that cause people
to get sick, it depended on the type of poultry that you are
talking about. Our national baseline surveys, if I recall
correctly--and I will provide this for the record in detail--
broilers had approximately 20 percent positives for Salmonella
as an example, and for ground turkey I believe it was up around
50 percent. So, that is the number of samples that you would
find positive. The analysis phase of the baseline study on
whole turkeys will be completed in July 1997.
[Clerk's note.--The information referred to will not appear
in the hearing record, but is printed in the Federal Register,
Vol. 61, No. 144, Thursday, July 25, 1996, pp. 38806 and 38846-
38847.]
Senator Bumpers. But you cannot tell me what studies so far
show will be the case after we implement the HACCP system?
Mr. Billy. No; there is no information like that, sir, to
answer your question. That is why we are going to do the
follow-on baseline surveys to develop that specific kind of
information.
Senator Bumpers. I think that is very important, otherwise
we do not know what we are getting here for this cost.
Mr. Billy. Can I add one other thing?
Sentinel Site Survey
Senator Bumpers. Certainly.
Mr. Billy. The sentinel site project that we have started
with CDC and FDA is also going to provide us new, important
information because everyone pretty much acknowledges that the
traditional reporting system for illnesses associated with food
products has a number of flaws in it that do not allow us to
rely on it to measure such progress.
Toward that end, we are cosponsoring the sentinel sites
project, where in five geographic locations around the country
we are very proactively looking for illness associated with
food products, and in our case those products that we regulate.
The data that will be developed under that sentinel sites
project will be extrapolated out to reflect the national
situation. It is designed statistically to do that. It will
allow us to have much better information about actual illness
caused by products that we regulate.
We started this over a year ago. We are currently
developing, if you will, the baseline information, and then as
HACCP kicks in and the pathogen reduction performance
standards, we will be able to use that system to do a very
direct comparison and show the progress that we are making in
terms of actual illness.
Senator Bumpers. Do you have any doubt whatever in your
mind that HACCP is going to be a major improvement?
Mr. Billy. I have no doubt whatsoever. It will make a huge
difference.
Senator Bumpers. What was your answer to my question, do
you have any follow-on system in mind. You said no?
Mr. Billy. No.
Boll Weevil
Senator Bumpers. Shifting gears and a similar question on a
separate subject and that is the boll weevil eradication. Do
you have any studies to show what the profit margins have been
for farmers who have had the boll weevil eradicated in their
States as compared to those that have not?
I am sorry. Mr. Medley, that is your question.
Mr. Medley. The Cotton Council and grower foundations have
acquired information about improved cotton yields and reduced
production costs on over 4 million successfully eradicated
acres. The rate of return on funds invested in boll weevil
eradication is estimated to be at least $12 for every $1 in
program cost.
Senator Bumpers. Mr. Medley, in your budget justification,
here is what you say. ``Two separate economic studies indicate
that once boll weevil eradication is accomplished, there is an
estimated yield increase of at least 69 pounds per acre,
pesticide savings of $30 per acre, and land value increases of
$14 per acre.''
That is a lot of money.
Mr. Medley. Yes, it is, Senator.
Senator Bumpers. So, you have done a study to verify this?
Mr. Medley. Yes; starting with our successful eradication
in the Carolinas, we have been able to track over the years,
not only the increase in acres planted and yield from
successful eradication, but the significant profits that you
referred to as well. There are increased benefits for gins and
mills resulting from increased yields. The Agricultural
Research Service recently published a document that verifies
the economic benefits of this very successful eradication
program.
Senator Bumpers. I have been pretty excited about this
program ever since it started and I have been anxiously
awaiting it coming to Arkansas. Of course, as you know, we
turned it down, and I think one of the reasons we turned it
down was because of the up-front cost. The farmer has to put up
70 percent. Is that not correct?
Mr. Medley. It was on a 70-30 basis for initial programs in
the Southeast and Southwest. In recent expansion areas like
Texas, the grower share is even higher and can be as much as
100 percent.
Senator Bumpers. Why does it vary from State to State?
Mr. Medley. We have tried to move from the 70-30 split,
which had been the initial share, to where the Department only
provides technical assistance to grower foundations and limited
startup costs. In expansion areas like in Texas, producers are
substantially bearing all the costs of the program through
referendum.
Senator Bumpers. What has been the cost per acre for most
farmers as far as their participating share was concerned?
Mr. Medley. In active eradication areas, producers may pay
between $10 to $35 per acre per year. In areas where the
program has been completed, producers pay $2 to $3 per acre per
year.
Senator Bumpers. Is that for 1 year or more?
Mr. Medley. We normally consider active eradication
covering a 3- or 4-year period.
Senator Bumpers. So, you are talking about $6 to $8?
Mr. Medley. The annual acreage assessment for growers can
range from $10 to $35 for active eradication areas.
Senator Bumpers. Did you mean $2 per acre per year?
Mr. Medley. The $2 per acre per year assessment would be in
posteradication areas.
Senator Bumpers. Do you have any idea why a farmer would
vote no when he is going to get an increase of 69 pounds per
acre and $14 an acre increase in the value of his land? I would
like to invest in that one.
Mr. Medley. Unfortunately, Senator, there have been other
issues affecting this program. For example, last year because
of heavy infestations of the beet armyworm, some producers felt
that the eradication program, because of the use of the
chemicals, reduced beneficial organisms and therefore caused a
reduction in yield. This could have been the reason some of the
producers voted no.
Senator Bumpers. Mr. Medley, in my State the farmers
generally north of I-40 I think oppose this. Those south of it
would approve of it. Is there any way to redraw the regional
lines for the election to allow the farmers----[Laughter.]
Mr. Medley. Senator, you are probably a lot more familiar
with that type of gerrymander than I am. [Laughter.]
Senator Bumpers. Well, then does that mean you are going to
turn it over to me? [Laughter.]
Mr. Medley. We provide technical assistance and may provide
a portion of the startup cost when growers pass a referendum.
Senator Bumpers. As I stated in my opening questions, I
think one of the reasons Arkansas turned it down was because of
the up-front cost. Now, you had a loan program and all these
other people have had the benefit of the loan program, but now
you are terminating that. So, I think the loan program could
have been sold to people as long as they could pay it back
while they were getting this 69 pounds an acre more.
Mr. Medley. The Farm Service Agency administers the loan
program--that loan program of $34 million was authorized for
fiscal year 1997. The idea behind the loan program was to help
provide funds to cover those types of up-front costs.
Senator Bumpers. I am going to talk to my farmers. I had
really been anxiously awaiting that program coming to our State
and was a little dismayed about the outcome of it. But I want
to talk to these people and find out really what is on their
minds, and if it is the up-front costs, then I may try to, with
Senator Cochran's assistance, get the loan money restored.
Mr. Medley. Senator, we definitely feel that the boll
weevil eradication program is an excellent example of using
integrated pest management to deal with serious agricultural
pests for the benefit of agriculture.
Senator Bumpers. Mr. Chairman, I have few questions for the
record that I will submit.
Senator Cochran. Thank you very much, Senator.
Senator Burns.
Senator Burns. Thank you very much.
I will come down and draw your lines for you. [Laughter.]
Spot Shortages in Inspection
Mr. Billy, just to give you an example of how slow I am, I
listened to you very intently and I do not know any more now
than I did before you started.
Senator Bumpers. Well, that is not a very nice way to start
the questions.
Senator Burns. Well, no. I know it is not.
Did it actually happen? Did they have to shut down some
plants because the inspection was running behind and there was
some carcasses lost? Did that actually happen? I think that was
asked.
We are going to substitute here. We are going to send in a
tight end. [Laughter.]
Dr. Reed. We did have some temporary spot shortages. We did
have some plants that had to drop shackles and there were some
inspector locations where so many people were out, we just
could not cover them. But they were spot shortages and we
generally had a plan to get people in there right away.
Current User Fee System
Senator Burns. OK. Being as that happened, can you tell me
the difference, if any--describe the difference of the fee
situation on who pays what with respect to fowl inspection and
red meat inspection.
Mr. Billy. Yes, Senator. What we are planning to do----
Senator Burns. No; not what you are planning to do. I mean
right now.
Mr. Billy. Oh, the current fees that are charged? We
currently charge overtime and holiday fees when inspectors have
to work.
Senator Burns. No, no; but I mean who pays what in a
chicken plant and who pays what in a slaughter plant handling
red meats. Do the taxpayers pay most of it in one and not the
other, or vice versa? Or are they the same?
Mr. Billy. It is the same set of rules that apply to both.
If plants have approved shifts, a primary shift, even a
secondary shift, then that is paid for by the taxpayer. If a
plant has unexpected overtime where they have to keep operating
to complete the processing of animals that have arrived, then
that unexpected overtime is paid for through fees, and that
applies equally to meat and poultry slaughter facilities.
Senator Burns. Both of them are collected the same.
Mr. Billy. The same way.
Senator Burns. Both of them pay the same fee.
Mr. Billy. Yes, sir.
Senator Burns. I see a lot of heads out there going that
way. OK. That is not the story I get, but I will accept that.
Inspection of Canadian Imports
Now, walk me through what we do with processed meats coming
in from Canada. Do we have inspectors in Canadian plants?
Mr. Billy. No, sir; we rely on the Canadian inspection
system which we review periodically to verify that it is
meeting our requirements in terms of our rules and procedures.
Then we reinspect the product at the border to make sure that
the Canadian inspection system has, in fact, worked
effectively. That is done through a statistical sampling
program where a certain number of shipments are sampled,
examined by the inspector, and perhaps sampled for residues,
and the labeling is reviewed. That system is applied not only
to Canada, but to all other countries that are approved to ship
product to the United States.
Senator Burns. Now, is there another inspection?
Mr. Billy. If the product is further processed--in other
words, it goes through an import inspection station and then is
shipped to a processing plant to be further processed--then
that material would be considered a raw material entering that
inspected establishment and would be further inspected to
assure that it is wholesome and suitable for processing.
Senator Burns. Now, I have been told--are all the trucks,
are all the loads that cross, say, at Sunburst--is every truck
inspected?
Mr. Billy. No, sir; the determination is made based on the
paperwork that accompanies a shipment whether a particular
shipment will be subject to anything beyond a review of the
paperwork.
Senator Burns. Who makes that determination?
Mr. Billy. Our inspectors. Our inspectors receive
instructions from an automated system that is designed
statistically to ensure that an appropriate number of shipments
from all the plants that are approved to ship are sampled on a
continuing basis. So, it is a statistically based system.
The data that is collected, based on inspection, is fed
back into the system and it could well trigger more frequent
inspection of a plant if that is warranted based on the
inspection results, but that would be reflected in the
instructions that the inspector receives for each shipment as
it comes through the border.
Senator Burns. Who makes the decision on what box you look
at and what box you do not look at?
Mr. Billy. It depends on what the product is. If it is
carcasses, for example, we have a brandnew strategy for dealing
with carcasses that come across the border. We started jointly
with Canada back in 1994 to develop a revised approach for
sampling carcasses.
The way it works is that we would make sure the Canadian
inspectors assure that the carcasses that are put on the back
of the truck are randomly picked from the whole load and are so
identified. If that shipment then is subject to inspection, we
would look at those carcasses as the first order of business to
determine whether, in fact, the carcasses meet all of our
requirements. If they do not, the shipment would be refused
entry into the United States. If they do, then that shipment
would be cleared and shipped on for further processing.
This new system has added an additional check and balance,
in that we will be routinely checking further at the point of
receipt of these shipments to verify that, in fact, the entire
load met the same requirements, and that will be done on an
ongoing basis. So, that is a new check and balance that we have
added into our inspection protocol, and we think that it will
provide stronger information in terms of the effectiveness of
this approach.
Now, if it is a packaged product, we would then randomly
sample the packages depending on the type of product that was
on a truck.
Animal Damage Control
Senator Burns. Mr. Medley, we are kind of concerned about
another area. You have cut your ADC funds half in two, and we
have got a little situation--I am going to be very provincial
about this--up in Montana where coyotes are just really--we are
in big trouble. You are asking the States to pick up more of
that, but yet it is a Federal program that puts wolves on us.
It is Federal programs that keeps off of public lands or
Government-owned lands where you have a high prevalence of
these predators. Then I have another question, but is there any
reason why this cutback in these dollars?
Mr. Medley. Senator, the proposal is to achieve a 50-50
cost share with the States in carrying out animal damage
control activities. Currently, there is a disparity in the
level of support that is being provided by individual States,
ranging from approximately zero to 94 percent of total State
program cost. This proposal is to have Federal contributions no
more than 50 percent of total program costs for each State.
It would not impact the wolf program where specific funds
were allocated to the Department as well as to Interior for
carrying out that program.
In Montana, the State pays about 37 percent of the program
operating costs. This proposal would reduce Federal
contributions so the Montana program would become a 50-50 cost
share. We would try to minimize any impact, but that is the
proposal, Senator.
Senator Burns. Well, but that is going to impact us more
and more and more. I would hope, working with my chairman, that
I could replace some of those dollars because we are in big
trouble.
We have had two things that have been devastating to us.
First, we lost our wool incentive program. It cost the taxpayer
nothing. So, our numbers continue to drop. And then the coyotes
are just absolutely--they are bad.
Now, there might be nothing to eat anyway because we have
had a pretty good winter up there in that part of the world, so
we are concerned about the ADC funds and this type of thing.
Responsibility for Food Safety
We are in this mind set, Mr. Billy, of why is it that you
think that the industry has more at stake in food safety than
the consumer does?
Mr. Billy. In fact, Senator, I believe that the
responsibilities are shared across the whole spectrum from the
producer, the slaughter plant, the processor, the distributor
or the retailer, and the consumer. At each point there are
responsibilities that have to be met.
It is for that reason, with respect to consumers, that we
believe we need to partner with industry and others to develop
a more effective approach for consumer education so that
consumers can carry out their responsibilities.
When I was a young man--and I suspect this was true with
you as well--I took a home economics class in junior high
school to learn the basics about food safety and how to prepare
and store foods. That has fallen by the wayside, and as a
result, we have got young people coming out of school that do
not begin to understand their basic responsibilities for food
safety.
I think that is costing our Nation. I think we need to find
a way to change that and to better equip the consumers to carry
out their responsibilities. So, it does not all fall on one. I
think it is a shared responsibility across the board.
Senator Burns. I am glad to hear you say it. Now, I didn't
take home economics. Maybe I should have. But I am glad to hear
you say that. I wish everybody would go around here and start
putting these back in schools.
Mr. Billy. I agree.
Senator Burns. We got another hearing going on right down
here. It is the AmeriCorps, volunteers do something for
America. Of course, they only cost you $28,000 for them to
volunteer. That is a hell of a volunteer.
You are right. It is passe. Everybody thinks that that is
kind of--that was old days. FFA, that is old days. The 4-H is
old days. And those are things that are ingredients that really
made this country tick. Yet, you go around to these grey poupon
and white wine parties and if you want to talk about weeds or
home economics, you are going to be standing there talking by
yourself. So, I am certainly glad to hear you say something
about it.
I want to work with you on your fees because I think the
consumers of America have as much at stake in food safety as
the producer does because I think the producer basically tries
to do a good job.
Mr. Billy. I agree.
Senator Burns. He loses control of that, however, when that
last whatever walks off the back of the truck. He loses all
control. He is completely in the hands of somebody else, but
yet if something happens down the line, he is the one that
takes the lick. And that is just plain, simple American, good
old agriculture kind of philosophy, and it has always been that
way.
And I do not know how you change it, but I say--and I still
say--that the second thing we do everybody in this room--the
second thing we do every day after we get up is eat. I do not
know the first thing you do. You got a lot of options.
[Laughter.]
But the second thing you do is eat. I think they have as
much at stake that they are getting a food product that is,
one, nutritious and, one, that it is safe.
I would concur with all of us here. That is basically why I
am very supportive of this panel and what they do, but I am
very concerned about are we sometimes being penny-wise and
dollar-dumb in some of our investments. So, I would hope that
we could work with the chairman and maybe move some dollars
around and get it done.
But basically I think you do a good job.
The Canadian thing I do not think you allayed many fears
with our people in Montana when your people were up there. We
are going to have a hearing up there, as you well know. That is
to allow your people to present what we are planning to do as
far as inspection that make sure that the people north of that
border--now, you have never been involved in border wars like
we are in Montana. You got to remember, we got 200 to 300 loads
of cattle coming across that border every day plus processed
stuff, and now they love to market their grain down here.
We have a hell of a time moving anything north. One time we
could not get in there because our wheelbase on our tractors
was too long. We could not get across the border to market our
product, and yet we are supposed to have a Free Trade
Agreement. Now, that is not right.
So, that is all the questions I have. I just look forward
to working with you and on these budgets to make sure that we
put the dollars where they need to be put because our problems
are not like the problems that they have in Mississippi. We do
not want to step on the problems and not address the problems
they have in Mississippi, but on the other hand, we want to
solve some of ours too and make sure that we look at this in an
equitable manner.
I get a big kick. We are all down there looking and sending
emergency dollars down South on them floods now. We are going
to lose a half a million head of cattle due to this winter in
the Dakotas and eastern Montana. A half a million head. And
there ain't nobody going to come roaring up there with any
checkbook or draft book wanting to buy them carcasses whenever
we start finding someplace to go with them. I will guarantee
you that.
And all that water has got to come down, so you are going
to get hit again, by the way. We are going to send it all down
to you again as soon as the sun comes out, anyway.
So, thank you very much, Mr. Chairman. I just want to work
with you to make sure that we got some equity in the budget.
That is what I am concerned about.
Import/Export
Senator Cochran. Thank you, Senator Burns.
Let me ask a couple of questions about the Marketing
Service. I noticed in the statement of Secretary Dunn comments
about how AMS does things behind the scenes to help pave the
way for the marketing of U.S. food products and commodities in
overseas markets. We have been successful in many specific
instances in that connection, one of which was to deal with the
problem Russia raised 2 years ago, or whenever it was, with our
poultry exports. They were shutting them down because of
suspected problems with food safety or contamination and the
like. You mentioned specifically having opened up new markets
for pork products in Russia.
Tell us about both of those. Have there been any recurrent
problems in connection with poultry exports? And, what did you
do to help pave the way to increase access in that market for
our pork products?
Mr. Dunn. Thank you, Mr. Chairman.
I am going to ask Administrator Medley to address those
questions.
As you are well aware, the Russian group was over here in
the United States. They did a tour with not only USDA
Agricultural Marketing Service agencies but also with Farm
Service agencies and FSIS to take a look at our organization.
It was a joint effort on the part of the agencies at the
Department of Agriculture working in cooperation with each
other, and I will let Mr. Medley address what we did to assure
the health of the chickens that we utilize in the poultry
business.
Mr. Medley. Thank you, Mr. Dunn. I will call on Mr. Billy
to add information because it was a partnership among APHIS,
FSIS, as well as the State veterinary services, the State
veterinarians, and industry.
Mr. Chairman, Russia was raising concern about numerous
poultry diseases and our ability to certify that our poultry
was free of those particular diseases. We were able, with the
help of industry, State, and Federal participants, to show our
counterparts in Russia that we do have an overall system to
certify the safety of our poultry products.
In addition to specific diseases, we clarified issues about
the pathogens which cause the disease.
Very recently, we conducted a followup meeting in Russia
which again focused on some of the science issues that are
associated with the certification process.
We see this, Mr. Chairman, as part of our responsibility in
APHIS to facilitate exports and also to maintain markets by
making sure that when sanitary/phytosanitary issues are raised,
that they are legitimate and that we address them. This is what
we did in this particular case. We assured our Russian
counterparts that our poultry disease reporting system was
adequate for us to be able to certify the health status of the
poultry being exported.
Mr. Billy. We did a similar thing, Mr. Chairman, with
regard to the food safety issues that focused on Salmonella and
various types of residues that could potentially be present in
poultry. We were able to negotiate an arrangement, where
through a minimal amount of testing, we could verify that, in
fact, these were not problems in terms of meeting the Russian
requirements for such products.
We were very pleased to sign that new agreement with my
counterpart, Dr. Avilov, last April. As I understand it, the
products have been flowing in very smoothly and effectively.
Market Access and Trade Practices
Senator Cochran. The question of how we are going to
continue to ensure access to markets is always one that is on
our minds. I cannot help but notice the continued trade
deficits that we have in some places. Japan, for example, is
almost $50 billion I think this year. China is developing a
huge trade surplus with us now.
What efforts are we making in those two markets, if any, to
try to break down barriers, if any exist, in areas similar to
those described in your statements where we have had success
stories in the past? Are there problems that are outstanding
with these two countries, and is there anything we can do about
it through the agencies that are represented here today?
Mr. Medley. Mr. Chairman, in fiscal year 1996 we had almost
$60 billion in agricultural exports. Our largest market, of
course, was Japan, followed by Europe. In agricultural exports,
we had a surplus of over $27 billion in 1996 and we are
anticipating a surplus of over $22 billion in 1997.
To maintain and expand markets, we are making sure that any
trade restrictions or requirements on trade are based only on
valid, sanitary/phytosanitary conditions. We are working with
the Foreign Agricultural Service as well as the U.S. Trade
Representative to create a level playing field for U.S.
agriculture.
It is not always easy. There are certain areas where basic
phytosanitary principles have not been accepted or not fairly
applied. In bilateral negotiations, we seek to correct these
situations. This week, we are in bilateral negotiations with
Japan to deal with certain phytosanitary issues.
Mr. Dunn. Mr. Chairman, specifically on China, just this
last month we signed an agreement with a contingency of Chinese
experts that were over here in the United States to take a look
at how APHIS operates.
But one of the things that we have found in order for our
producers and our processors and traders to be extremely
knowledgeable about what is happening in the international
sector is that they need the same type of information on
agricultural market news that they have here domestically. I
would ask Mr. Lon Hatamiya maybe to elaborate a bit on that.
Senator Cochran. Mr. Hatamiya.
Mr. Hatamiya. Mr. Chairman, if you have seen our budget
request this year, we are asking for additional funds to
increase our international market news collection and
dissemination. Much of that will be in the areas where you
mentioned, in the Pacific Rim, in terms of China, Southeast
Asia, and Japan, as well as South America where we think there
are emerging markets where domestically grown products can be
sold.
Another area that we are actively involved in is in
standards development. We believe the U.S. standards should be
used as a standard worldwide, so we are actively involved with
international standards organizations to ensure that our voice
is there to break down any kinds of trade barriers that may
exist due to differing standards from one country to the next.
But we believe that the key to gaining access for U.S.
producers to sell in these countries is to have as much
information as possible so the producers can maintain their
competitiveness when they try to enter into these markets, as
well as to gain further access to these markets.
Senator Cochran. Senator Bumpers raised a question about
the boll weevil loan program. We included in the fiscal year
1997 appropriations act, funding for this new loan program but
nothing has happened to date. There were never any regulations
issued, so none of the funds have been used. Why not?
Mr. Dunn. Mr. Chairman, the approval of that program about
5 months ago was for our Farm Service Agency to be able to give
a loan program to supplement the producers to buy into the boll
weevil eradication program.
The Farm Service Agency has been, in fact, working on their
regulations. I met with them earlier this week to find out
exactly where we were on those regulations. They have assured
me that they have been completed and are in the process of
completing the internal review that we have for those
regulations.
I do have some concerns that it is getting late in the
season and that we are losing our opportunity to use that
program this year.
One of the concerns that the Farm Service Agency had was
the need for an EIS or environmental assessment for their
program which is required by law. What I have offered for them
to do is have APHIS provide that service for them and I am
guardedly optimistic that we are on track to getting that
program out so that we can still utilize those funds that were
appropriated, Mr. Chairman.
Senator Cochran. The President's budget for this next year,
fiscal year 1998, proposes to terminate the boll weevil
eradication loan program. Is there any additional information
that you can give the committee as to why the administration is
proposing to terminate it?
Mr. Dunn. I would have to defer to the Farm Service Agency
folks when they are here or maybe to Mr. Kaplan on an overview.
Mr. Kaplan. It was just due to the cap on the discretionary
budget, sir, and the fact that it has not been implemented yet.
Senator Cochran. The President did not request a rescission
of the funds or a deferral or anything like that, did he? Is
this called impoundment? Is that not what we had the Budget Act
passed for? If funds are appropriated for a program, shouldn't
they be spent as the Congress and the law directs that they be
spent?
Mr. Kaplan. As Assistant Secretary Dunn said, we still hope
to get the regulations out this year and make the funds
available.
Senator Cochran. Does the Department have a view--or should
we ask others when they appear before us--why USDA has stalled
and why the Department may not share our view that this is a
good way to accelerate the eradication of boll weevil
infestations?
Mr. Dunn. I think on the contrary, Mr. Chairman, I think we
do view this as a good opportunity to use those funds this
year. The Farm Service Agency has established those regulations
internally. I know many folks wonder what passes for work for
an Assistant Secretary, and it is my responsibility to ensure
that we get those out and I have to take part of the blame
here. I can assure you that is on my radar screen. I have had
inner-departmental meetings to get those regulations out so we
can still use those funds this year.
Senator Cochran. Well, I appreciate hearing that, and I am
encouraged by that answer, Mr. Secretary. I worry that the
President's budget request is down $9.8 million from the fiscal
year 1997 appropriated level for the APHIS boll weevil
eradication program and no funding is proposed for the loan
program.
There are several areas that have not participated in the
program. Some are having additional referenda. Senator Bumpers
mentioned the situation in Arkansas. We have had a region in
our State where approval has not been obtained to complete
statewide coverage of the program, but I understand that the
proponents are working on that and are dealing with information
awareness and whatever else may be needed to complete this
program.
One thing that we noticed was that in Alabama the per-acre
costs were higher than in other neighboring States.
Do you have any information that you could give the
committee as to why this disparity exists and what the cost
differences are?
Mr. Dunn. I have asked our internal management people to
take a look at that situation and to give us back a report. I
have not received it at this time, Mr. Chairman.
Senator Cochran. When you do have it, would you give us at
least some information on that subject if you have it available
to you?
Mr. Dunn. Yes, sir.
Ambient Temperature of Eggs
Senator Cochran. There is also another statute and
directive on the subject of ambient temperature of eggs that
regulations should have been issued on 7 years ago. I think it
was 1991 when a law directed that be done, and it still has not
been done as far as we can tell. This is touched on, I think,
in Mr. Billy's statement to the effect that FDA and others are
being asked for input into the process, and that this may get
done sometime soon.
I think one of the reasons why the industry is so concerned
is that you have identified some outbreaks of Salmonella. This
may have been prevented if the regulations on ambient
temperature had been developed and implemented as contemplated
by the congressional directives.
What is going on here? What is the problem?
Mr. Billy. Mr. Chairman, the specific requirements that are
contained in that amendment would have us establish a
requirement that vehicles that convey eggs to the marketplace
meet an average ambient temperature of 45 degrees. When the
Department started to develop regulations to implement that
provision, it became clear, based on the comments received,
that there were several problems with that approach.
First, that approach would have a very high impact on the
small companies that transport eggs to market because of the
cost involved in implementing that provision. So, there was a
concern about the cost impact in particular on small operators.
Second, there were concerns about how you would enforce
such a requirement because if you open the truck to take
samples, depending on when you would check that temperature,
you could have a problem with what the ambient temperature is
in the back of the truck, and not necessarily have it reflect
what the temperature of the eggs were, and whether they were,
in fact, being cooled down below the temperature at which
pathogens can grow and multiply.
Finally, there was no provision for looking at the
continuum of when eggs are first laid and then washed and put
into cartons, and then as they move through the process of
distribution to the marketplace. You could have that provision
met, yet have temperatures in the eggs because of how they are
handled prior to distribution where the temperature was high
and would not be lowered significantly during transportation.
That provision does not specifically target the question of
temperature in the sense of getting the temperature down so
that pathogens cannot grow and multiply if they are present.
The approach that we are taking is to look at that
continuum in terms of when the eggs are laid, how they are
handled at that stage, so that we can, in fact, properly manage
the combination of time and temperature. The temperature is
brought down in a consistent manner to meet the requirements of
how the eggs are shipped and sold at retail. So, we think a
more comprehensive approach that focuses on the temperature of
the eggs rather than the temperature of the vehicle in which
they are being transported will net us a better result in terms
of egg safety.
We are doing a risk assessment, as required, to look at
that continuum and identify what the most effective approach
from both the public health and cost point of view would be in
terms of dealing with that issue. In the meantime, we have
encouraged the industry, those that have the means, to meet
that requirement. To the extent that it does provide some
margin of positive impact, we welcome that and we are
encouraging that. But we think our approach will be more
comprehensive and focus in particular on the eggs in terms of
getting their temperature down to assure that any pathogens
present are not multiplying on the way to the marketplace.
Senator Cochran. Were the recent HACCP regulations designed
to cover shell eggs?
Mr. Billy. No, sir; we are approaching that on a separate
rulemaking basis jointly with FDA because they have
responsibility for shell egg safety, except for this one
provision on the transportation of shell eggs to market, which
is a requirement that USDA must address.
Senator Cochran. Do you intend to mandate HACCP for plants
that process shell eggs?
Mr. Billy. Yes; we believe that that is an appropriate step
that would accomplish two or three things.
One, we think that it will allow us again to modify our
inspection approach to focus on the key control measures that
are critical from the point of view of the safety of egg
products. We have talked to the industry and they seem to be
very supportive of that kind of a transition to a HACCP-type
approach. In fact, we have received a petition that would
encourage us to move forward in terms of a HACCP-type approach
for egg products.
HACCP for Egg Products
Senator Cochran. This may be too big of a question for this
hearing, and if it is, I will be glad to entertain your
suggestion that it be submitted for the record.
What are your options for proposed regulations under HACCP?
Mr. Billy. Well, we think that we can have several
approaches considered. One perhaps would be to look at whether
we could do it on a voluntary basis. If there is very strong
interest and commitment from the industry, perhaps we can
approach this on a voluntary basis and end up with the same
kind of result that would be otherwise the case if we chose a
mandatory approach.
We also need to look at whether HACCP is needed for all
types of egg products. It may be the case with certain types of
products that you do not need to take that step in terms of
assuring the safety of the product.
Then we need to carefully look at the timing, the phase-in,
and what we would discontinue doing in terms of our current
continuous inspection approach.
So, there are different ways of implementing such a new
requirement that would minimize the cost impact and any
disruption, but at the same time properly address the safety of
egg products.
Senator Cochran. Thank you very much.
I do not want the Grain Inspection Service to think that we
have forgotten about you over there.
Mr. Baker. I did not think you had.
Packer Concentration
Senator Cochran. There is one area that I wanted to touch
on. The Secretary may want to comment, of course, and certainly
we would appreciate his doing so if he wants to.
The budget proposes an increase of $2.3 million for the
Grain Inspection, Packers and Stockyards Administration to
carry out recommendations of the Advisory Committee on
Concentration. There has been a good deal of speculation and
concern that prices being paid to producers were low because we
had just a few big packers and stockyards. The producers and
the beef cattle farmers and ranchers were suffering as a result
of that, and there were some recommendations made.
How are you going to spend that money? What are you going
to do with the $2.3 million in additional funds and what
activities are going to be carried out?
Mr. Dunn. Mr. Chairman, I will lead off while Mr. Baker
collects his thoughts on that.
This has been one of Secretary Glickman's highest
priorities since he has become Secretary of Agriculture. He
initially started off, went around the country, and had town
meetings. He heard over and over again that concentration was a
big issue of great concern by all segments of the agriculture
industry.
As a result, he put together an advisory committee made up
of 21 members, and they have given us some 68 recommendations
of things that they would like us to do.
We have asked the Office of Inspector General, in fact, to
take a look at packers and stockyards to see if we have the
right mix, the right makeup, the proper people there, and are
we going about the investigations as we ought to to ensure that
we can address these concentration issues.
We are going to be in the future taking a look at
increasing some economists to do an econometric model of what
the industry ought to look like, increase some legal staff to
give us some better insight of how we go about gathering
information, working closer with the Office of General Counsel
to ensure that we go through and get some better convictions or
a better record on our convictions.
Now, specifically on the dollar amount we have requested, I
will let Mr. Baker respond to that.
Mr. Baker. Mr. Chairman, approximately one-third of that is
money that is being requested in the poultry area where our
agency can gear up to better evaluate and better investigate
contract poultry production dealing with large, complex
integrators and poultry people. That is basically one-third of
it.
The other two-thirds is in refocusing our efforts in the
procurement of packers and the complex industry that is out
there. We do, I think, an excellent job in dealing with the
average-type cases that are brought before P&S and all, but the
big anticompetitive cases that we are presently involved in are
requiring tremendous resources that are not available to us.
For us to gear up and get into that picture, we have got to
have more money. This is the third year we have asked for it.
Maybe the third year is the charm, and we sure need more money.
Market Reporting
Senator Cochran. AMS also has $500,000 requested to carry
out the findings of that committee. How are you going to use
that, Mr. Hatamiya?
Mr. Hatamiya. Mr. Chairman, there are a number of proposals
we are putting together, but primarily they are in the area of
market information and collection. From the advisory
committee's report, there was a need for more value-based
information both at the cattle, hogs, sheep, at all levels
where concentration exists.
What we are going to do is try to implement the $500,000 we
are requesting to better report prices and to do it in a matrix
format where the value reporting will give some essential
understanding across geographic regions. We are also adding
people at auction markets for direct coverage of daily trading
to better reflect contract pricing.
So, there are a number of issues in all of these areas
where we think we can better cover markets and revise what we
have been doing in the past to produce information that is more
usable for the producer in this day and age. With the changes
in international trade, we think it is also important to have a
better basis for what we are reporting.
Senator Cochran. I appreciate very much the cooperation
that you all have given to our subcommittee. You have been
patient with our questions and our requests for information to
help us better understand the budget request and its
implications for the agriculture and food industries and for
consumers, who I guess have the most to lose of anybody if we
have a contaminated food supply.
My impression from what I have heard today and also just as
general information that is available to the public is that we
have the safest food supply in the world. We have a system that
is probably more intense, in terms of the concentration of
effort, science and energy, to help assure the safety of the
food supply than that of any country in the world.
I think we can all take pride in that. We have worked very
hard over a long period of years, and our predecessors in these
jobs have as well, to help achieve these goals. So, we take it
very seriously here in the Senate and we know the agencies of
the Department of Agriculture, who are all represented here
today, do as well. So, for that good effort, I want to
personally commend you all.
Submitted Questions
I thank you all again for being here and for your
testimony. The additional questions that we will submit we hope
will be answered in a timely fashion, for which we will be very
grateful.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]
Food Safety and Inspection Service
Questions Submitted by Senator Cochran
fsis computer technology investments
The President's budget requests an increase of $1.25 million to
upgrade automated data processing (ADP) and technology in support of
the Agency's computer technology enhancements. USDA has not implemented
agency-wide architecture by February 1, as Deputy Secretary Rominger
stated in his November 12 letter. The agency has not even completed the
strategic planning necessary to identify and understand its core
business processes.
Question. FSIS has stated that funds are necessary in fiscal year
1998 to provide ADP and telecommunications equipment which are
currently not available. Has FSIS constructed a strategic plan that
coordinates with USDA's overall plan?
Answer. FSIS conducts an ongoing long-range planning process for
information resource management (IRM) to maximize the use of
information technology (IT) in facilitating and supporting our agency's
program mission, and to improve the availability, quality, management
and use of information throughout FSIS. FSIS updates its IT Long-Range
Plan annually to ensure compliance with the overall USDA IT
architecture.
FSIS has contributed several staff members to work with the
Department on USDA's Information Technology (IT) Architecture. By
working with USDA on the overall IT structure, we are very confident
that FSIS plans are compliant with the USDA IT architecture. FSIS
actively supports and serves on the USDA IRM Council Board, the IRM
Planning Sub-Council, the Data Administration Sub-Council and the
Telecommunications Sub-Council. The agency fully participates in the
ongoing USDA IRM modernization initiative, which addresses prioritized
action items selected by the USDA IRM Council Board on the basis of the
recommendations identified in the USDA IRM Modernization Report.
Question. If USDA has not implemented the agency-wide architecture
or completed the strategic planning, then is FSIS limited in its
ability to move forward?
Answer. In January, FSIS requested and received an IT waiver from
USDA to conduct computer acquisitions for the Field Automation and
Information Management (FAIM) project. The waiver enables FSIS to
continue implementation of the FAIM project through the purchase of
desktop and notebook computers for use by FSIS inspection personnel. As
a result of this waiver, FSIS is able to move forward with providing
the necessary infrastructure to support the FSIS field reorganization
and new inspection methodologies, such as HACCP.
USDA continues to develop information architecture, its Enterprise
Network. Telecommunications is part of information architecture and is
included in the USDA-wide Enterprise Network. FSIS has submitted its
inventory forecast needs and a Telecommunications Management Plan to
the Department for review. We have every expectation of approval and
implementation within the time frames specified.
Question. Is this subject to the Department's moratorium on new
computer system investments?
Answer. The requested increase of $1.25 million for upgraded
automated data processing (ADP) and telecommunications technology would
be subject to the Department's moratorium, based on the agency's
experience with FAIM in fiscal year 1997. However, we would expect to
request a waiver, based on a similar justification for FAIM, that the
requested equipment purchases are essential to implementation of the
field reorganization.
Question. How much has been invested in the Field Automation and
Information Management (FAIM) project to date (please indicate by
fiscal year).
Answer. Direct FAIM obligations total $9.75 million through January
1997. This includes hardware, software, supplies, maintenance, travel
for trainees to the training center at Texas A&M University, training,
contracting, and associated telecommunications costs. In addition,
there are agency costs that are identified as part of the OMB Circular
A-11 Exhibit 43 on Information Technology. For example, the FAIM staff
receives programming assistance for FAIM applications from others
within the agency, for which FAIM has identified the staff years as
part of the system life-cycle, and which are included in the Exhibit 43
under ``Personnel work-years.''
[The information follows:]
Fiscal year Cost
1996 \1\................................................ $7,230,000
1997 through January 31, 1997........................... 2,520,000
--------------------------------------------------------
____________________________________________________
Total obligations................................. 9,750,000
\1\ Of the total $8.4 million appropriated, $1.2 million was ``carried
over'' into fiscal year 1997 for the purchase of a new hardware/software
platform.
Question. What is the total cost of this system?
Answer. Through fiscal year 1997, the cost for FAIM is $16.95
million. An additional $8.5 million is requested for fiscal year 1998,
the third year of the five year FAIM project.
fsis employee relocation costs
The fiscal year 1998 budget requests $1 million for relocation
costs of FSIS employees.
Question. What is the status of the FSIS centralized administrative
offices located in Minneapolis, Minnesota and Urbandale, Iowa?
Answer. All field personnel functions are being consolidated in
Minneapolis, MN, which is the site of an existing field personnel
office. Consolidation is expected to be completed by the end of fiscal
year 1997 and the office will be fully staffed to manage personnel
functions, including hiring, merit promotions, lateral reassignments,
and work reductions.
The Financial Processing Center in Urbandale, Iowa opened at the
end of September 1996 and expects to complete consolidation of field
finance functions by the end of fiscal year 1997, including pay, the
collection of revenues from reimbursements and trust funds, and
processing of payments for travel.
Question. What is the status and location of the new district
offices?
Answer. The new district offices are currently being established
and will begin operating with core staff by June 1997. The location of
these offices are as follows: Alameda, CA; Salem, OR; Boulder, CO;
Minneapolis, MN; Lawrence, KS; Springdale, AR; Dallas, TX; Madison, WI;
Chicago, IL; Pickerington, OH; Philadelphia, PA; Albany, NY; Boston,
MA; Greenbelt, MD; Raleigh, NC; Des Moines, IA; Atlanta, GA and
Jackson, MS.
Question. On what basis was a site selected for the Technical
Services Center?
Answer. An FSIS committee scored and ranked each site considered
based on a number of criteria, including space availability and cost,
labor market conditions, and air service. For the six cities that best
met these criteria, both first year and ten year costs were compared,
and there was not a significant difference on the cost amortized over
ten years.
Consideration then was given to additional characteristics of the
sites, including: time zone that facilitates nationwide contacts; a
rural agricultural community surrounding; population levels in terms of
the impact of FSIS employment; advantages offered by site
representatives such as financial and family relocation services; and
immediate availability of suitable office space facilities.
In reviewing the top sites based upon these factors, Omaha, NE was
selected because it offers several advantages. It is a mid-size city in
the Central Time Zone with a rural agricultural community surrounding.
In addition, Omaha offered a three year supplement of $300,000 each
year to offset costs to the Federal Government. The city provides
family relocation services in conjunction with those provided by FSIS,
and has identified several office buildings with suitable space
available for occupancy consistent with FSIS time frames.
Question. Will $1 million be adequate for the relocation of
employees beginning in fiscal year 1997 and completing the relocation
by the end of fiscal year 1999? If not, how much do you project will be
needed for fiscal year 1998 and fiscal year 1999?
Answer. An increase of $1 million in fiscal year 1998, to be
continued in fiscal year 1999, is needed to complete relocation of
positions to the district offices, technical services center, and
centralized administrative offices. The requested increase will provide
sufficient funds to complete the relocation through fiscal year 1999.
Question. What is the total net savings from FSIS field management
streamlining once this process is completed?
Answer. From fiscal year 1995 through fiscal year 1997, FSIS will
have met targets for streamlining and administrative cost reductions
that total nearly $11 million and more than 300 staff years.
Implementation of the agency reorganization to consolidate field
management will enable FSIS to manage within this reduced level of
staffing and funding levels.
haccp
1. The President's budget requests $565,000 to provide Hazard
Analysis and Critical Control Point (HAACP) training to state and local
food regulatory officers.
Question. Will restaurants and retail stores be required to
implement HACCP in the future?
Answer. FSIS and FDA have no plans to impose HACCP requirements on
restaurants or retail stores. Nonetheless, the federal agencies are
encouraging all who process food commercially to adopt HACCP
voluntarily because it is a rational, effective, and universally
applicable method for assuring the safety of processed foods.
Question. What is the Administration's position on merging state
and federal meat inspection so meat inspected by state agencies can be
sold across state lines?
Answer. USDA is not philosophically opposed to interstate shipment
of state inspected products and is ready to address the concerns of
state inspected plants and State Departments of Agriculture underlying
this issue. However, it is not ready to endorse the ``merging'' of
state and federal inspection or other specific solutions proposed for
those concerns without further analysis of the issues. USDA has
committed to holding public meetings on this issue June 16 and 17,
1997, in Sioux Falls, South Dakota, and on July 8, 1997, in Washington,
DC, to get more information and provide a record upon which it can base
a full analysis of its policy options.
USDA is very concerned that state inspected processors wishing to
distribute their product across state lines view the obtaining of
federal inspection to be an unreasonable obstacle in their path, and
would consider changes in how FSIS grants federal inspection to such
plants if warranted. Similarly, USDA views state inspection programs as
an essential part of the nation's food safety network, and is open to
new ideas on how to better support them and keep them viable. The
Department wants to have the best possible working relationship with
state meat and poultry inspection programs and the establishments they
inspect.
Any additional major changes in USDA's inspection program, on top
of major organizational changes already underway within FSIS, would
divert USDA resources from implementing HACCP and pathogen reduction
requirements, and could lead to delays in these risk reduction efforts.
That is, the public benefits of instituting such changes at this
juncture should be carefully weighed against the public costs.
2. When do you plan to have all the HACCP regulatory reforms in
place and completed?
Answer. The target for completing all HACCP regulatory reforms is
1999.
3. It is my understanding that FSIS is considering publishing on
the Internet and through other media the results of the agency's
Salmonella testing of meat and poultry processing establishments.
Question. Is FSIS considering publishing the agency's Salmonella
testing of meat and poultry processing establishments on the Internet?
Answer. Last fall, during public meetings explaining the regulatory
provisions of FSIS' HACCP final rule, Agency officials indicated that
the Agency was considering publication of Salmonella test results on
the Internet, Since those public meetings, FSIS has received oral and
written correspondence from interested parties expressing concern over
the Agency's intention to make the test results available on the
Internet. In response to this interest, FSIS is holding a public
meeting March 6, 1997, to hear these concerns and to receive public
input on the best method for making the test results available.
Question. Is this data you are publishing intermediate results?
Answer. The data under consideration for publication includes pre-
implementation and compliance results.
Question. If so, how can you justify publishing this information?
Answer. FSIS will collect samples from meat and poultry
establishments prior to the scheduled date for HACCP implementation for
that group of plants. The test results from these pre-implementation
samples are intended to provide information on what FSIS needs to know
in order to effectively administer and enforce the regulation; what
individual establishments need to know about their present level of
compliance with the Salmonella performance standards in order to
develop HACCP plans that ensure that products meet those pathogen
reduction performance standards; and what FSIS, the industry, and the
general public need to know about Salmonellalevels at the starting
point for the new system of regulating meat and poultry products.
Information gathered on Salmonella testing is subject to release under
the Freedom of Information Act. The possible publication of data on the
Internet would facilitate the general public's ability to know about
Salmonella levels at the starting point for the new system of
regulating meat and poultry. On the other hand, very legitimate
concerns were raised about the improper use of such available data,
particularly by foreign interests and foreign markets. We expect to
make a decision in mid 1997.
Question. Will it lead to any enforcement action?
Answer. The data collected during the pre-implementation period
will not lead to enforcement action. Once the effective date for
compliance with the Salmonella performance standards has occurred for a
given group of plants, the test results of sample analysis of product
from those plants may lead to enforcement action, if the plant's test
results reflect that it is not complying with the pathogen reduction
performance standard. It should be noted that data associated with a
regulatory case is withheld, pending a final outcome.
Question. Will this lead consumers and prospective international
customers into believing that the U.S. products tested are unsafe or
unwholesome?
Answer. FSIS has conducted Salmonella testing on ready-to-eat
products for many years. Testing on ready-to-eat products has been on a
product acceptance basis, meaning that the test results do signify
whether the products are wholesome and safe for consumption. The
presence of any pathogen in ready-to-eat products indicates that the
food production process is out of control and the product produced
under the process is adulterated. FSIS works with industry to recall
ready-to-eat products contaminated with human pathogens to protect the
public health.
This is not true, however, with Salmonella testing on carcasses and
raw ground products. FSIS' Salmonella testing program on carcasses and
raw ground products serves to verify the effectiveness of establishment
process control activities in reducing pathogen levels on raw products.
The test results from this program are not used for product acceptance
purposes. FSIS is aware that the objectives of this testing program are
different than those of testing programs on ready-to-eat products. For
that reason, FSIS intends to provide explanatory information with the
release of test results to insure that consumers and international
customers understand that positive findings of Salmonella on raw
products are not an indication of unsafe or unwholesome product.
in-plant inspection personnel
1. HACCP is to be implemented in increments through year 2000. As
HACCP becomes the inspection system in all plants, in-plant inspectors
will no longer be needed.
Question. Is this correct?
Answer. No. In-plant inspection will be required under HACCP.
Implementation of HACCP is not a means to reduce the size of, or
eliminate the need for, in-plant inspectors. Under HACCP, inspectors
will be needed both within and beyond slaughter and processing plants
as FSIS broadens the scope of food safety activities. FSIS is requiring
HACCP, along with pathogen reduction, and Sanitation Standard Operating
Procedures (SOPs), to improve food safety and begin the long-awaited
modernization of USDA's meat and poultry inspection system. FSIS
expects this combination of HACCP-based process control, microbial
testing, pathogen reduction performance standards, and sanitation SOPs
to significantly reduce contamination of meat and poultry with harmful
bacteria and reduce the risk of foodborne illness. FSIS's non-safety
regulatory responsibilities for wholesomeness, product integrity and
labeling under the laws will continue to require inspection activity in
plants.
Question. Explain how personnel will be altered through year 2000
as the current inspection system is replaced by the HACCP system.
Answer. Implementation of the final rule on HACCP and Pathogen
Reduction systems will result in far-reaching changes in the respective
roles of industry and FSIS inspection personnel in assuring the public
a meat and poultry supply that meets appropriate sanitation and safety
standards and is not adulterated or misbranded. The Pathogen Reduction
and HACCP systems rule represents a change in regulatory philosophy and
thus will change the focus, tasks, behavior, and priorities of agency
employees, particularly front-line inspection personnel. It will more
clearly define and separate the role of the food producer and
regulator.
Traditionally, some plants have relied on inspectors to identify
deficiencies on a daily basis before the company would take action to
correct food safety problems. This factor, and the prescriptive nature
of the requirements, has often blurred the line between industry and
regulator. Under HACCP, plant owners and operators will be responsible
for manufacturing products that are not adulterated or misbranded and
that meet performance criteria and standards. Inspectors will be
responsible for inspecting facilities, operations, records, and
products to verify that regulatory requirements have been met and for
taking enforcement action when there is sufficient evidence that
requirements have not been met. Under the new system, inspection
personnel will exercise the following regulatory oversight
responsibilities.
[The information follows:]
haccp responsibilities to be performed by inspection personnel
--Evaluation: to determine that each plant's sanitation SOP and HACCP
plan conforms with the regulatory requirements.
--Verification: to determine, on an ongoing basis, that a plant is
carrying out its SOP and HACCP plan, including microbial
verification.
--Documentation: to prepare written material to document failure to
meet regulatory requirements.
--Enforcement: to take appropriate actions when a plant is not in
conformance with established regulatory requirements.
4. How much money do you have budgeted for reimbursement to
employees' for continued education?
Answer. In fiscal year 1997, FSIS expects to reimburse
approximately $300,000 to in-plant inspection employees for the cost of
courses they take on their own time near their work sites in subjects
such as statistics and microbiology.
To further enhance the ability of our food inspectors to work in a
HACCP environment, the new Food Safety Educational Program was
developed in conjunction with Texas A&M University in College Station,
Texas. This program is budgeted for $1,000,000 in fiscal year 1997, and
will cover such topics as microbiology, risk assessment, environmental
sanitation, food chemistry, and statistical quality control. Students
will have the opportunity to experience ``hands-on'' laboratory
training to support lectures. This four week academic program is
intensive and demanding, and covers as much as would be expected in a
normal college semester. College credit will be earned for successful
completion of the course. This program will provide nine four-week
classes, with 30 inspectors in each class.
5. Why was Texas A&M University chosen to provide in-plant
inspectors a scientific foundation in a HACCP environment?
Answer. In 1987, Texas A&M University was competitively awarded a
five year contract to assist in providing training and educational
opportunities to FSIS personnel. The University successfully competed
for a second five year contract which began in 1993. During the nine
years FSIS has collaborated with Texas A&M University, they have
demonstrated a willingness and capacity to provide high quality
educational support. Further, those nine years have given them a
greater understanding of the FSIS mission and the environment our
personnel work in on a daily basis. The College of Agriculture and
College of Veterinary Medicine at Texas A&M have programs in Food
Science and Food Technology as well as a highly regarded faculty that
FSIS can draw upon to develop educational programs that will help
prepare FSIS employees for their changing inspection roles. The current
contract allows for development of new programs within the existing
provisions to respond to emerging or changing needs.
6. In your statement Mr. Billy, you propose to increase the
proportion of resources for the front-line workforce. Food inspectors
is one of the areas targeted.
Question. Does this mean there will be a net increase in front-line
workforce, including inspectors, as HACCP is fully implemented?
Answer. The 1997 Appropriation provided an increase of $3.2 million
for increased inspection staffing to enable FSIS to provide adequate
inspection resources as we make the transition from the current
inspection system to HACCP-based inspection. In addition to this
increase, the proportion of inspection staff will increase as
streamlining of non-front-line positions continues. The fiscal year
1998 budget request includes no further increases for inspection
staffing, but includes an increase for full pay costs to maintain
current staffing levels in order to cover the slaughter lines and
processing operations.
Question. Are we to assume all employee cuts will occur in
administrative positions?
Answer. The intent of continued streamlining efforts is to reduce
non-front-line positions which include administrative and program
positions. Front-line positions include food inspectors, in-plant
veterinarians, import inspectors, circuit supervisors, compliance
officers, and laboratory personnel.
7. The Committee's fiscal year 1997 recommendation included the
full amount requested in your budget to fill all inspector vacancies
and to fully implement the hazard analysis and critical control points
(HACCP) system.
Question. What actions is FSIS taking to streamline the inspection
system for efficiency?
Answer. The agency is reforming its existing regulations to be
consistent with HACCP principles and greater reliance on performance
standards and to remove unnecessary regulatory obstacles to innovation.
On December 29, 1995, FSIS published an advance notice of proposed
rulemaking (ANPR) and additional rulemaking proposals describing the
agency's strategy for regulatory and inspectional reform and initiating
the rulemaking process required to achieve necessary changes. On May 2,
1996, FSIS also published two additional regulatory reform documents--a
proposal to eliminate the prior approval system for facility
blueprints, equipment, and most partial quality control plans and a
proposal to add a performance standard alternative to the current
command-and-control requirements governing cooked meat and poultry
products. FSIS will ensure that current regulations are revised as
necessary before the implementation dates to ensure consistency with
the new rules.
FSIS will soon begin a public process to develop and evaluate new
approaches to inspection that would ensure that FSIS is making the best
possible use of its resources to improve food safety while still
meeting all of the consumer protection objectives of the current
system. FSIS anticipates a redeployment of some of its inspection
resources to successfully implement HACCP and better target food safety
hazards during transportation, storage, and retail sale.
Question. Are your HACCP regulations not making it intensive by
layering new programs on top of old ones?
Answer. FSIS is undergoing a transition from the traditional
inspection system to HACCP-based inspection. Until HACCP provisions are
fully implemented, there will be unavoidable, but temporary overlap in
inspection activities to ensure the safety of meat and poultry
products. FSIS is pursuing the implementation of HACCP provisions in
accordance with the time frames in the final rule--for fiscal year
1997, January 27 implementation of sanitation SOPs in all plants and
generic E. coli testing in slaughter plants. At the same time, the
agency's top rulemaking priority is eliminating regulatory provisions
that are not consistent with HACCP.
risk of mad cow disease
The Washington Post reported that new machines used to debone meat
have raised concerns from consumer groups of the existence of ``Mad Cow
Disease''. The machines not only separate meat from bone but also
extract bone, bone marrow, and even spinal cord tissue. The disease may
be contracted by humans from eating meat containing spinal cord tissue
from infected cows. There has been no discovery of this disease in the
United States.
Question. What is USDA's opinion of the advanced meat recovery
(AMR) process currently being used by the beef industry?
Answer. USDA considers the meat derived from bones by properly
controlled and operated AMR systems to be wholesome and safe for human
consumption. Neither spinal cord, central nervous system tissue, nor
excessive bone material should be present if the AMR process is
properly controlled by the establishment. USDA does not believe that
spinal cord, central nervous system tissue, or excessive bone material
should be included in product labeled as boneless meat regardless of
the process through which the product is derived.
Question. How have the consumers' concerns been allayed?
Answer. The Food Safety and Inspection Service is preparing a
directive to define inspection tasks which will specifically deal with
the inappropriate presence of spinal cord in boneless meat derived from
AMR systems. FSIS will continue to analyze AMR system survey data to
determine the necessity of regulation which addresses the composition
of product from AMR systems. FSIS will consider what rule-making or
other regulatory action may be appropriate to clarify the status of
product derived from AMR systems.
research funding
In your statement Mr. Billy, you mention several areas where
research will play an integral role in the Food Safety Initiative.
Question. What is the Department's total budget for the food
safety/pathogen reduction research?
Answer. The Department's overall budget for food safety research is
estimated at about $63 million in 1997. The 1998 President's budget
funds food safety research at $72 million, or about $9 million or 14
percent above 1997.
About $50 million or 80 percent of the total research is conducted
by the Agricultural Research Service (ARS). The agency aims to improve
the quality and safety of animal products used as food for humans and
to reduce losses in animal productivity resulting from pathogens,
diseases, parasites, and insect pests. ARS conducts both pre- and post-
harvest research to reduce potential risks for consumers by targeting
toxicants, chemical residues, and other substances which contaminate
the food supply.
An increase of $4.1 million in the ARS 1998 budget is focused on
control of pathogens which cause food-borne illness such as Salmonella,
Campylobacter, and E. coli, and to develop pre-harvest detection and
enumeration methods required to identify specific control points and
strategies to limit infection in meat and poultry products. The request
also provides for post-harvest research to facilitate the development
of effective Hazard Analysis and Critical Control Point (HACCP)
programs in the slaughter and processing of meat and poultry products.
The land-grant universities with financial support from the
Cooperative State Research, Education, and Extension Service (CSREES)
are the other major providers of food safety technology and research-
based information. The CSREES budget for food safety research is about
$12 million in 1997. The agency uses formula funds and special research
grants to develop rapid, selective and sensitive methods for pathogen
detection prior to consumer consumption, and to develop intervention
technologies to eliminate pathogens. In addition, the National Research
Initiative (NRI) supports studies on risk assessment that will lead to
improved methods for detection and/or control of disease-causing
microorganisms, and to benefit and cost analysis in support of HACCP
regulations.
An increase of $2 million is proposed in the CSREES 1998 budget for
competitively awarded special research grants to investigate pre- and
post-harvest issues for detection and control of pathogens and for
production, processing, and handling management practices and enhance
food safety education programs emphasizing pre-harvest activities,
HACCP and other quality assurance programs, and industry compliance
education. An additional $2 million is proposed to enhance food safety
education programs focusing on pre-harvest activities, HACCP and other
quality assurance programs, state certification programs, and industry
compliance education.
Research activities carried out by other Departmental agencies
include improving the early warning system for foodborne illness and
for providing HACCP training for state and local health officials, and
for improving consumer education.
In addition to food safety research, the Secretary has allocated
$10 million of the Fund for Rural America to address four specific
activities, one of which is aimed at assisting small meat and poultry
processors implement HACCP plans. This assistance will complement
efforts by FSIS to provide direct technical assistance to small
establishments for achieving improved food safety under the new
inspection system. The Department is currently evaluating proposals
submitted for this activity and will announce actual funding
allocations this summer.
grants-to-states
The budget request for fiscal year 1998 is $1.13 million to defray
increased costs in State inspection programs and to pay for State
inspectors.
Question. How many states currently participate in the Grants-to-
States program?
Answer. Currently, 26 states participate in the Grants-to-States
Program.
Question. What amount does each participating state receive?
Answer.
[The information follows:]
[Obligations in Thousands of Dollars]
----------------------------------------------------------------------------------------------------------------
State 1996 1997 1998
----------------------------------------------------------------------------------------------------------------
Alabama......................................................... $1,275 $1,290 $1,325
Alaska.......................................................... 341 345 355
Arizona......................................................... 585 605 621
Delaware........................................................ 213 217 223
Florida......................................................... 1,967 2,044 2,099
Georgia......................................................... 2,404 2,473 2,540
Hawaii \1\...................................................... 293 .............. ..............
Illinois........................................................ 4,361 4,698 4,825
Indiana......................................................... 1,653 1,704 1,750
Iowa............................................................ 1,011 1,059 1,088
Kansas.......................................................... 1,283 1,412 1,450
Louisiana....................................................... 1,755 1,843 1,893
Mississippi..................................................... 1,099 1,103 1,133
Montana......................................................... 341 353 363
New Mexico...................................................... 419 423 435
North Carolina.................................................. 2,849 3,061 3,143
Ohio............................................................ 4,620 4,633 4,757
Oklahoma........................................................ 1,617 1,631 1,676
South Carolina.................................................. 1,133 1,189 1,221
South Dakota.................................................... 483 480 493
Texas........................................................... 4,603 4,776 4,903
Utah............................................................ 771 828 850
Vermont......................................................... 284 296 304
Virginia........................................................ 1,293 1,309 1,344
West Virginia................................................... 597 609 626
Wisconsin....................................................... 2,985 3,034 3,116
Wyoming......................................................... 284 313 322
Total..................................................... 40,519 41,728 42,855
----------------------------------------------------------------------------------------------------------------
\1\ As of November 1, 1995, the Hawaii inspection program converted from State to Federal inspection.
the president's food safety initiative
1. Before the President's budget was released, The Washington Post
reported on January 25, 1997, that President Clinton would request a
total of $43 million to fight outbreaks of food contamination. The
article also stated that $31.5 million would be requested for food
safety research and inspection systems. Of that amount, FSIS would get
under this proposal $8.5 million.
Question. Please provide the activities and the money requested in
the fiscal year 1998 budget that are considered to be a part of the
President's Food Safety Initiative.
Answer. The January 25, 1997, Washington Post article incorrectly
reported that FSIS would receive $8.5 million under the President's
food safety initiative. The initiative includes $9,179,000 for USDA, of
which $1,065,000 is for FSIS initiatives. This includes $500,000 for
the Sentinel Site Survey to support the ``Early Warning System'' for
public health surveillance and $565,000 to provide HACCP training for
State and local food regulatory officers.
Question. Which activities are currently the existing mission of
the FSIS? Which proposals are new to FSIS and are a result of the
President's initiatives?
Answer. FSIS currently provides $1 million annually and works with
the Centers for Disease Control and Prevention (CDC) and the Food and
Drug Administration (FDA) on the Sentinel Site Survey to assist our
efforts at protecting the public health through ensuring the safety of
meat, poultry, and egg products. The objective of the Sentinel Site
Survey is to estimate the national incidence of the major foodborne
diseases and to explore what relationships may exist between specific
pathogens and the types of meat, poultry, and other food products
associated with them.
With sentinel site information, FSIS can identify areas of concern,
review HACCP programs and, where appropriate, trigger changes to
prevent future outbreaks of foodborne illness. The requested increase
of $500,000 will enable FSIS to obtain information on the high priority
pathogen, Campylobacter, the most common foodborne pathogen. This
information will provide FSIS with a more complete picture of the
incidence of foodborne illness, which is necessary in order to identify
appropriate measures for controlling and preventing foodborne illness.
FSIS is committed to assisting States with implementation of HACCP
requirements. The requested increase of $565,000 to provide HACCP
training to State and local regulatory officials at the retail level
will further assist States, and address the risk to food safety in meat
and poultry processing activities regulated by State and local
authorities.
2. The President's Food Safety Initiative creates an early warning
system that consists of five food sentinel sites. In addition, the
President's budget also requests monies for additional states to have
improved surveillance, investigation, control, and prevention of food
borne disease outbreaks.
Question. What is FSIS's role in the new ``Early Warning System''?
Answer. The ``Early Warning System'' described in the President's
Food Safety Initiative builds on the existing Sentinel Site
Surveillance Project, recently named ``FoodNet''. FSIS has scientific
input through its membership on the project steering committee and its
participation in investigating outbreaks of illness associated with
meat and poultry products.
Question. How much money does FSIS contribute to each of the five
food sentinel sites?
Answer. Through an agreement with CDC, FSIS provides $1 million per
year to FoodNet and has proposed an increase of $0.5 million for fiscal
year 1998 to cover Campylobacter case control studies at the expanded
eight sites. FoodNet activities and resources at the sites are managed
by CDC, who also selects each site through a competitive process.
Question. How many total sites does the President's Food Safety
Initiative propose and what are their locations?
Answer. The President's Food Safety Initiative proposes to conduct
FoodNet in no less than eight sites. Surveillance will continue at the
five sites established in 1995, which encompass the Minneapolis/St.
Paul, Minnesota metropolitan area; Oregon; selected counties in
Northern California; Connecticut; and the Atlanta, Georgia metropolitan
area. These sites represent approximately 13 million people, or 5
percent of the U.S. population.
An additional three sites will expand surveillance coverage to
about 10 percent of the U.S. population. These sites are being selected
by CDC through a competitive process. Two of the sites are the
Rochester, NY area and the Baltimore, MD area. The selection process
has not been completed for the eighth site.
Question. Are these sites permanent which will require yearly
allocations?
Answer. CDC manages the selection and surveillance of sites.
Funding requirements for FoodNet are expected to continue on a yearly
basis, as proposed.
Question. How will the requested funds be used to improve
surveillance, investigation, control, and prevention of food borne
disease outbreaks?
Answer. The requested increase would cover Campylobacter case-
control studies at the expanded eight sites. Expanding surveillance
coverage to eight sites, or 10 percent of the population, would
increase the statistical significance of the effort among the sites and
federal agencies. By strengthening FoodNet, the initiative will create
the ``early warning'' capability described by the President. Such a
system could detect large outbreaks as they begin, then quickly alert
states and federal agencies, whose rapid response could avert further
foodborne illnesses and deaths.
Epidemic investigations as well as planned case-control studies
within the expanded surveillance network will identify specific foods
or food processing activities associated with pathogens and human
illness. By identifying and implementing corresponding control or
prevention practices throughout the food chain, the risk of foodborne
illness could be reduced nationwide.
Question. Outline your farm-to-table strategy for inspection.
Answer. The final HACCP rule addresses hazards within slaughter and
processing plants. FSIS recognizes, however, that these measures must
be part of a comprehensive food safety strategy that addresses hazards
at other points in the farm-to-table chain. To that end, FSIS is
broadening the scope of its food safety activities beyond slaughter and
processing plants, with particular new emphasis on hazards that arise
during transportation, distribution, and retail sale.
To improve food safety at the animal production and intermediate
stages before the slaughter plant, FSIS is working with industry,
academia, and other government agencies to develop and foster measures
that can be taken on the farm, and through distribution and marketing
of animals to reduce food safety hazards associated with animals
presented for slaughter. FSIS does not intend to mandate production
practices at this stage, but instead believes that the voluntary
application of food safety assurance programs based on HACCP principles
can be useful in establishing risk reduction practices on the farm and
during intermediate marketing stages. The agency believes that
continued public concern about foodborne pathogens and the adoption of
HACCP and performance standards will increase incentives for producers
to adopt food safety practices at the animal production level.
Food safety during transportation, storage and retail sale are also
important links in the food safety chain. In these areas, FSIS, FDA,
and State and local governments share authority for oversight of food
products. FSIS and FDA are jointly working to develop standards
governing the safety of foods during transportation and storage, with
particular emphasis on the importance of temperature control in
minimizing the growth of pathogenic microorganisms.
In the retail area, FSIS and FDA are working with state officials
to ensure the adoption of uniform, science-based standards and to
foster the adoption of HACCP-type preventive approaches. State and
local authorities have primary responsibility for food safety oversight
of retail stores and restaurants, but FSIS and FDA, working through the
Conference for Food Protection, can provide expertise and leadership to
support local authorities and foster the development of sound food
safety standards and practices nationwide.
Even as progress is made in reducing contamination during these
stages, it will remain critical that retail food handlers and consumers
follow safe food handling practices. Proper storage, preparation, and
cooking of meat and poultry products are essential to achieving the
goal of reducing the risk of foodborne illness to the maximum extent
possible. FSIS intends to augment its food handler education efforts by
expanding its collaboration with industry, other government agencies,
consumer and public interest groups, educators and the media to foster
the effective delivery of food safety education and information.
Question. What resources are required?
Answer. For fiscal year 1998, a program level request of $591.2
million is required to maintain the inspection workforce at its current
level in order to provide inspection; to provide laboratory capability
to meet HACCP requirements for product sampling and testing; and
provide scientific leadership on food safety priorities, such as the
FoodNet.
user fees
1. The fiscal year 1998 President's budget proposes user fees to
recover the full cost of direct on-site product inspection. It is
estimated that this proposal will generate $390 million in new
revenues. Last year, the Administration proposed user fees to pay for
inspection incurred during overtime. The industry and Congress balked
at this proposal and refused to incorporate user fees.
Question. If user fees for overtime shifts were proposed and
rejected by the Congress and industry, why do you believe a user fee
proposal to recover the full costs of inspection would fare any better?
Answer. The administration believes that the collection of user
fees is essential to the successful long-term implementation of meat,
poultry, and egg products inspection reforms. If industry takes
responsibility for the cost of inspection, industry would be assured of
sufficient resources to efficiently operate plants, and the
Administration could then fully focus its efforts on developing and
implementing necessary inspection reforms which would thereby improve
consumer confidence in meat, poultry, and egg products. With inspection
no longer subject to annual budget pressures, the agency will not have
to balance food safety reform initiatives against inspection staffing
needs.
Question. Has this proposal been submitted to the Congress?
Answer. The legislative proposal will be submitted to Congress in
the next few weeks.
Question. What benefits would consumers receive if these fees were
authorized?
Answer. If industry takes responsibility for the cost of
inspection, the Administration can then fully focus its efforts on
developing and implementing necessary inspection reforms which would
thereby improve consumer confidence in meat, poultry, and egg products.
Question. How does the agency plan to implement these user fees?
Answer. FSIS is analyzing a number of user fee approaches. These
include systems based on inspection staff years, pound of liveweight or
raw meat input, numbers of carcasses, and registration for inspection.
Through the rulemaking process, the agency will seek input from the
public on developing a user fee system that is equitable, cost-
effective and accountable. The Department has developed, and is
pursuing an implementation schedule to ensure that regulations will be
in place to implement the fees on October 1, 1997, assuming enactment
of the legislation.
Question. Were all of the inspector vacancies filled with the
fiscal year 1997 allocation?
Answer. The 1997 Appropriation is sufficient to provide inspection
coverage that is adequate to ensure the safety of regulated product, as
well as accommodate industry growth.
Question. Was HACCP fully implemented with the fiscal year 1997
allocation?
Answer. In accordance with the provisions of the final HACCP rule,
pre-HACCP sanitation standard operating procedures, SOPs, were
implemented in all plants and E. coli testing was begun in all
slaughter plants, effective January 27. HACCP implementation will begin
in fiscal year 1998, and the implementation schedule will be based on
plant size. Large plants with 500 or more employees are required to
have their HACCP systems in place by January 26, 1998. Small plants
with 10 to 499 employees are required to implement HACCP by January 25,
1999. Very small plants with fewer than 10 employees or less than $2.5
million in annual sales have until January 25, 2000 to implement HACCP.
2. Your total request for FSIS is $591 million for fiscal year
1998. For fiscal year 1998, appropriations the Administration's
legislative proposal for inspection user fees would require $201
million to provide laboratory support for inspection, animal production
food safety investments, investments in new inspection system
improvements, and program administration.
Question. How would the adoption of this user fee legislation
impact the fiscal year 1998 appropriations request for the FSIS?
Answer. The 1998 budget includes the assumption that adoption of
the user fee legislation would reduce the FSIS Appropriations request
from $591.2 million to $201.2 million for fiscal year 1998. Upon
enactment of the legislation, FSIS will do rulemaking to implement a
user fee system to recover an estimated $390 million in inspection
costs.
3. Assuming the enactment of the Administration's user fee
proposal, the FSIS appropriations request for fiscal year 1998 is $201
million. The assumption would also be that the legislative proposal for
FSIS recovers $390 million in user fees which will be paid by the
industry. Your testimony states that the industry assumes 70 percent of
the total cost of the program if the user fee proposal is enacted.
Question. What are the projected appropriations needed for fiscal
year 1998 and the succeeding five years out?
Answer. Under current law, the projected appropriations needed are
$591.2 million for fiscal year 1998. Assuming enactment of the proposal
to recover the cost of salaries and benefits for mandatory inspection,
the projected fiscal year 1998 appropriations needed are $201.2 million
for laboratory support for inspection, animal production food safety
investments, new inspection system improvements designed to enhance
safety and productivity, and program administration. The long term
implications of the proposed legislation are as yet to be determined.
Question. What specific costs would be borne by the industry for
fiscal year 1998 and the succeeding five years out?
Answer. Industry would be responsible for the cost of all salaries
and benefits of personnel performing mandatory inspection of meat,
poultry, and egg products.
Question. What assumptions are these appropriations and user fee
collections based on in terms of the cost of the fees paid and the
activities provided by these fees, e.g. fees collected only cover costs
of in-plant inspections?
Answer. The estimated collection of $390 million in the user fee
proposal is based on the fiscal year 1998 projected cost of salaries
and benefits for the fiscal year 1997 staffing ceiling of permanent
full-time employees and other than permanent full-time employees who
perform mandatory inspection of meat, poultry, and egg products.
Question. Do these assumptions change once HACCP is implemented?
Answer. The proposed legislation provides user fees for salaries
and benefits of personnel conducting inspection and compliance services
incident to the inspection of meat, poultry, and egg products. Under
HACCP, we continue to recover the same costs.
Question. Have you consulted with industry on this user fee
proposal?
Answer. Industry representatives are being invited to a meeting
scheduled for March 10, to comment on the user fee proposal.
salaries and expenses
The Under Secretary for Food Safety and Inspection Service position
remains vacant.
Question. What has been done with the funds provided for fiscal
year 1997 and previous fiscal years?
Answer. The first annual appropriation for the Office of the Under
Secretary for Food Safety was provided for fiscal year 1996. The total
costs in fiscal year 1996 for this office were $440,000 for the
salaries and benefits, travel, and other operating costs of the Acting
Under Secretary, one confidential assistant, and two clerical staff.
For fiscal year 1997, very little of the funding for this office has
been obligated since positions in the Office of the Under Secretary
were vacated early in the fiscal year.
Question. Why was a request for funds made in the fiscal year 1998
President's budget?
Answer. Funding for the Office of the Under Secretary for Food
Safety was included in the 1998 President's budget based on the
expectation that positions for that office will be filled in fiscal
year 1998.
______
Questions Submitted by Senator Burns
explanation of haccp final rule to producers
Question. Mr. Billy, can you provide the committee information on
what you are doing to explain the new rules and regulations on meat
inspection to the people on the ground, the producers?
Answer. The Food Safety and Inspection Service (FSIS) has planned a
series of meetings on the Plant Communications Initiative to improve
communications with inspected establishments, especially small and very
small plants, as they implement new federal food safety requirements
for meat and poultry plants. These requirements are contained in the
Hazard Analysis and Critical Control Points (HACCP) final rule.
FSIS has scheduled ten public meetings across the country,
including one teleconference, to facilitate direct input on how the
Agency can better communicate with plants. Locations for the meetings
include Tennessee, Pennsylvania, Massachusetts, Missouri, Alabama,
California, Illinois, North Carolina, Texas, and Wisconsin.
At each meeting, FSIS Administrator Thomas J. Billy and Dr. Craig
Reed, Deputy Administrator for Field Operations, will meet with plant
managers to discuss information and communication needs. In particular,
the Agency would like to know:
--What kind of information plants need from FSIS to successfully
implement HACCP;
--What are the best ways FSIS can meet plant needs, including working
with new technologies; and
--How can FSIS get a consistent inspection message to all plants.
In addition to meetings, the Agency is working with groups of small
and very small establishments and their institutional cooperators
(universities, trade groups, and consultants) on projects which are
designed to demonstrate how small plants can meet the requirements of
the HACCP final rule. Material under development to explain the
requirements for small and very small plants includes the following:
--Guidebook for the Development of HACCP Plans;
--Hazards and Controls Guide;
--13 Generic HACCP Models;
--Reproduction of a HACCP Plan Development Video Produced by
Agriculture Canada and Agri-Food Canada;
--Guidance Material for E. coli Testing for Livestock and Poultry;
--Video for Sampling Carcasses for E. coli Testing; and
--Guidance Material on Statistical Process Control.
FSIS also recognized early that the implementation of the final
HACCP rule would have a significant indirect impact on the food animal
production community. The Agency is working proactively with the
various industry and professional organizations which represent all
segments of the food animal production process to raise the level of
awareness about the regulation, its potential ramifications for their
respective members, and what action they may wish to consider.
At the animal production level, the FSIS strategy is to encourage
the voluntary use of the existing commodity food safety and quality
assurance programs, which are based on HACCP principles, to reduce food
safety risks. We believe that producers who implement the practices
recommended in these programs will be able to provide slaughter plants
with the assurances they need regarding the residue safety of the
animals they process.
Question. In December of last year, the Food Safety and Inspection
Service was asked to come to Montana to discuss the rules and
regulations on meat inspected coming in from Canada to the general
membership of the Montana Stockgrowers Association. There had been talk
that there may be some discussion on a personnel matter in the agency
at this same meeting. However, I believe all that was resolved and the
topic of discussion was to be the inspection of meat coming across the
border from Canada. Yet, a day later when I met with these same people
they were anything but confident in the process and the discussion that
had occurred. I would hope you could make it a part of this new program
to make sure that the producers understand the process and the costs
that they will ultimately bear. Can you assure this committee that you
will meet with producer groups to make sure that they do understand
what it is that they will be paying for?
Answer. A major objective of the ten public meetings FSIS has
scheduled across the country is to find out from plant managers the
kind of information plants need from FSIS to successfully implement
HACCP. We intend to provide the needed information, and work with
plants to assist them in implementing HACCP.
interstate shipment issue
Question. What is the Agency doing at this time to resolve the
differences that have recently occurred between the state inspection
process and the federal?
Answer. FSIS is ready to address the concerns of state-inspected
plants and state Departments of Agriculture underlying this issue, but
is not ready to endorse the ``merging'' of state and federal inspection
or other specific solutions proposed for those concerns without further
analysis of the issues. FSIS is publishing a notice in the Federal
Register announcing two public meetings on this issue on June 16 and
17, 1997, in Sioux Falls, South Dakota, and on July 22, in Washington,
DC. These meetings are to solicit information on ways to improve
Federal and State cooperation in the implementation of the Federal
inspection laws and whether, and if so, how, those laws should be
changed to permit State inspected product to move in interstate
commerce.
USDA is very concerned that state-inspected processors wishing to
distribute their product across state lines view the obtaining of
federal inspection to be an unreasonable obstacle in their path, and
would consider changes in how FSIS grants federal inspection to such
plants if warranted. Similarly, USDA views state inspection programs as
an essential part of the Nation's food safety network, and is open to
new ideas on how to better support them and keep them viable. The
Department wants to have the best possible working relationship with
state meat and poultry inspection programs and the establishments they
inspect.
FSIS is in the process of making major changes in how it conducts
federal inspection; changes aimed at reducing risks to public health
through a shift to HACCP-based inspection and imposition of new
pathogen reduction requirements. It is important that FSIS implement
these changes with care and without delay, and that state programs have
the guidance and assistance they need to make their inspection programs
``equal to'' the federal program in a timely fashion. Any additional
major changes in its inspection program would divert USDA resources
from risk reduction efforts and could lead to delays in implementing
HACCP and pathogen reduction requirements. That is, it is suggested
that the public costs of instituting such a change at this juncture may
well outweigh the public benefits.
differences in inspection of meat and poultry
Question. As I mentioned in my statement, in Montana we do not have
a large number of chicken producers. However, if agriculture pulls the
wagon of the economy in Montana, then livestock's production is the
beast of burden. Can you put in real terms, that all America can
understand, the difference in the treatment of white meat products and
red meat products in the inspection process, and the cost difference?
Answer. FSIS contracted with the Research Triangle Institute (RTI)
to conduct a comprehensive comparative study of meat and poultry
regulations. RTI completed its study in June 1993. For the record, I
will provide the study by RTI, and the FSIS analysis of the study. In
summary, the study found that differences in the regulations and the
inspection process are sometimes justified by the fact that ``the two
industries deal with different animals, and have different production
processes,'' and that the ``laws for market protection were designed to
protect the markets within each industry . . . and to] use industry
standards; and FSIS has no authority to reconcile those standards
between industries.'' The study found that the cost of an inspector's
salary and benefits per pound of inspected product is $0.0020
liveweight for red meat and $0.0046 liveweight for poultry.
[The information follows:]
[Research Triangle Institute, June 1993]
Comparison of Meat and Poultry Regulations (Summary Report)
background
The Food Safety and Inspection Service (FSIS) of the U.S.
Department of Agriculture (USDA) is responsible for inspecting all meat
and poultry products shipped in interstate commerce and for assuring
consumers that meat and poultry products are wholesome; not
adulterated; and are properly marked. labeled, and packaged. The
Federal Meat Inspection Act (FMIA) and the Poultry Products Inspection
Act (PPIA), both as amended, provide USDA this mandate. FSIS
administers and reviews inspection activities to ensure that the
agency's policies and regulations are consistent with the FMIA and
PPIA.
Industry representatives have expressed concerns that differences
in USDA regulations for meat and poultry inspection may benefit or harm
one segment of the industry or the other. In response, the FSIS
Administrator requested a comprehensive comparison of the meat and
poultry regulations to identify and describe significant requirement
differences. Consequently, Research Triangle Institute and three
independent consultants (hereafter RTI) reviewed Title 9, Code of
Federal Regulations, Subchapters A (Mandatory Meat Inspection [Parts
301-335]) and C (Mandatory Poultry Products Inspection [Part 381]) \1\
to identify all substantive regulatory requirements not already
identical, outline the significant differences by specie, and classify
the bases for those significant differences. The purpose of this report
is to document RTI's findings and to outline its method of evaluation
regarding this comprehensive regulatory comparison.
---------------------------------------------------------------------------
\1\ 9 CFR Parts 301-335, and 381, respectively; Revised as of
January 1, 1992, with ancillaries.
---------------------------------------------------------------------------
findings
In general, the regulations covering meat and poultry have been
designed with the same intent--to protect ``the health and welfare of
consumers by assuring that meat and meat food products [or poultry
products] are wholesome, not adulterated, and properly marked, labeled,
and packaged'' (p. 1139).\2\ However, although the intent of the
regulations remains the same, the actual requirements are quite
different. This is to be expected considering that the regulated
species have inherently different characteristics. These different
characteristics were considered as the rules and regulations evolved.
The regulations contain and present the means for effectively
accommodating those differences as the respective meat and poultry
industries go about challenges of converting raw materials into foods
for humans and into other byproducts (e.g., pet food).
---------------------------------------------------------------------------
\2\ 21 U.S.C. Sec. 602 and Sec. 451.
---------------------------------------------------------------------------
It is within this context that we attempted to outline the
differences that currently exist between the meat and poultry
regulations and to classify the bases for those differences. RTI
applied a ``general acceptance'' rule in making its determinations. If
RTI judged that objective and knowledgeable professionals would
generally agree on the identification and classification of the
regulatory differences found, then our findings were stated
accordingly. Industry was not consulted, nor were cost evaluations
conducted for determination of minor vs. significant differences.
Furthermore, RTI did not attempt to justify the regulatory differences
found. The following is the summary of our findings.
Minor Regulatory Differences In General
The meat and poultry regulations contain hundreds of differences in
regulatory requirements. Most of these differences were identified as
``minor.'' Most of these ``minor'' regulatory differences are based on
language variations (e.g., poultry regulations generally are shorter
and more concise than are those for meat). These variations probably
developed as a result of the time differential between regulatory
enactment of the FMIA (1907) and the PPIA (1957).
Regulatory differences are deemed ``minor'' when the intent of the
regulation is essentially the same and in RTI's opinion there is no
identifiable difference between the burdens imposed on meat and poultry
producers. These differences are denoted in the main report document as
``minor,'' and no bases for these differences are given.
Significant Regulatory Differences in General
The regulations also reflect a number of significant regulatory
differences that stem primarily from inherent differences in the two
industries. First, the species slaughtered and processed are different,
and they have different diseases and conditions. Thus, the procedures,
processes, and equipment used to obtain consumer-ready products vary
considerably between meat and poultry species. Differences of this type
are outlined in the Appendix and are noted as being primarily based on
inherent specie differences, which require variations in slaughter,
processing, inspection, and labeling methods to ensure wholesome,
nonadulterated products.
Second, the poultry industry had been growing and expanding under
voluntary poultry inspection for many years prior to the mandatory
Federal legislation of 1957. When the regulations were written for
mandatory poultry inspection, customary and usual industry practices
and standards of the time were incorporated into the regulations.
Consequently, poultry regulations that are similar in subject category
to meat regulations (c.g., standards of identity) reflect differences
in 19`traditional'' industry practices that continue today (e.g.,
``chili con carne'' must have a minimum of 40 percent fresh meat;
``(poultry) chili'' must have a minimum of 28 percent cooked, deboned
meat). Differences of this nature are outlined in the Appendix, and the
basis for these differences are classified as ``traditional'' (i.e.,
``traditional'' industry practices were included in the regulatory
language at the time of codification).
Finally, the poultry regulations in some parts contain very
detailed requirements while the counterpart meat regulations are very
general in content. This can be attributed largely to the fifty or so
years difference in the ages of the FMIA and the PPIA The meat
inspection program evolved mostly during a period when policies and
procedures were published in directives, manuals, and similar
publications. The more recent poultry inspection program was developed
mostly during a period when policies and procedures were promulgated by
rulemaking, to permit public comment and better public notice
consistent with the Administrative Procedure Act. (It should be noted,
however, that in the last decade or so Federal agencies were
discouraged from issuing new regulations, leading to a return to
greater reliance on directives and policy guidance issued directly by
FSIS for both meat and poultry inspection matters). It can be argued
that such differences are also attributable to larger, more drastic
technological and marketing changes occurring in the poultry industry
in recent decades than in the red meat industry, leading to greater
need for poultry inspection procedures to change and adapt. These
differences have been outlined in the Appendix and their basis for
differences identified primarily as ``historical.''
These specie, traditional, and historical-based regulatory
requirement differences are deemed ``significant'' in that they are not
``minor'' differences (i.e., the potential burden on producers for such
regulations may be greater on one industry or another). These
``significant'' differences are outlined in the report and the basis
for those differences are given.
Specific Significant Regulatory Differences
Although most regulatory differences between meat and poultry are
minor and/or of no real consequence to either the meat or poultry
industries, there was a general agreement at RTI and among its
consultants that a small number of differences may be viewed as
potentially significant in terms of cost advantage to one industry or
another (or to FSIS in terms of the relative costs of administering the
two regulatory programs). Again, these differences identified reflect
the judgment and consensus of RTI; industry was not consulted, nor were
cost evaluations done. These specific significant differences are
outlined below by subject area. In addition, the Appendix page numbers
and CFR citation references are given for ease in locating each
difference.
1. Carcass Chilling Procedures
Traditional chiding methods for meat and poultry carcasses are
different Meat is chilled by exposing it to cold air. Poultry chilling
by cold air and by cold water immersion are both permitted. Poultry
carcasses normally are immersed in chilled water and ice. The immersion
chilling method for poultry allows for the absorption of 8 percent or
more of water by weight into the poultry carcass, a gain in carcass
weight that dry chilling methods do not impart to livestock carcasses.
Livestock carcasses may be sprayed while being chilled, but are not
permitted to gain weight in the process. The basis for these
differences is primarily traditional (i.e., current industry practices
written into-the regulations at the time of codification).
------------------------------------------------------------------------
Page No. Meat CFR Poultry CFR
------------------------------------------------------------------------
F-10 to F-15.................. None Sec. 381.66(d)(1)-(6).
------------------------------------------------------------------------
2. Humane Slaughter
There exist regulatory requirements--with their related procedures,
controls, and penalties--for the humane slaughter of livestock. There
are no corresponding laws or regulations for poultry. The basis for
these differences is statutory (i.e., requirements for humane slaughter
of livestock are contained in the FMIA; no comparable requirements for
the humane slaughter of poultry are included in the PPIA). (See 21
U.S.C. Sec. 603[b], 610[b].)
------------------------------------------------------------------------
Page No. Meat CFR Poultry CFR
------------------------------------------------------------------------
I-1 to I-12...................... Sec. 313.1 None.
Sec. 313.2 None.
Sec. 313.5 None.
Sec. 313.15 None.
Sec. 313.16 None.
Sec. 313.30 None.
Sec. 313.50 None.
------------------------------------------------------------------------
3. Poultry Reprocessing
Carcasses contaminated on the slaughter floor are considered
adulterated. Poultry carcasses may be reprocessed by washing of
contaminated areas with chlorinated water; poultry regulations allow
for such reprocessing and provide for equipment and procedures to
accomplish it. Contaminated meat may not be washed. Trimming of
contaminated areas is the only accepted method for removal of ingesta
or fecal materials from livestock carcasses. The PPIA expressly permits
reprocessing of poultry; the FMIA has no such provision. (See 21 U.S.C.
Sec. 455[c].)
------------------------------------------------------------------------
Page No. Meat CFR Poultry CFR
------------------------------------------------------------------------
H-27 to H-28.................. None Sec. 381.91(b)(1)-(2).
------------------------------------------------------------------------
4. Poultry Slaughter Modernization
Certain regulations that provide for new poultry inspection
procedures, responding to the modernization of poultry slaughter
technologies. could have comparable applications to livestock slaughter
but have not been adopted in meat post-mortem inspection. These
include:
(a) The use of quality control (QC) concepts and cumulative sum
(CUSUM) in establishing and controlling product nonconformities.
(b) Plant-operated QC programs and personnel for the purpose of
attaining maximum production potential.
(c) Finished Product Standards (FPS) published in the regulations.
The basis for these differences is essentially ``unknown'' (i.e.,
these procedures could, with modification, be done for meat species the
same as for poultry species).
----------------------------------------------------------------------------------------------------------------
Page No. Meat CFR Poultry CFR
----------------------------------------------------------------------------------------------------------------
G-23 to G-24........................... None Sec. 381.76(b)(3)(i)(a)-
(d), (g), (h).
G-28 to G-50........................... None Sec. 381.76(b)(3)(iv)(c)+.
----------------------------------------------------------------------------------------------------------------
5. Exemptions
Generally, the regulatory exemptions from inspection are more
liberal for poultry than for meat. For instance, the meat regulations
permit the uninspected slaughter and processing of livestock for
household use only, but the poultry regulations permit the uninspected
slaughter, processing, and sale of limited quantities of poultry and
poultry products to consumers. In addition, the poultry regulations
exempt from inspection certain products containing small amounts of
poultry that would otherwise receive inspection under the meat
regulations. The basis for most of the exemption differences is
statutory. (See 21 U.S.C. Sec. 464 and Sec. 623.)
----------------------------------------------------------------------------------------------------------------
Page No. Meat CFR Poultry CFR
----------------------------------------------------------------------------------------------------------------
A-4................................... Sec. 303.1(d)(2)(i)(c) Sec. 381.10(d)(2)(i)
A-19.................................. None Sec. 381.10(a)(1).
A-20.................................. None Sec. 381.10(a)(5).
A-21.................................. None Sec. 381.10(a)(6), (a)(7).
A-22.................................. None Sec. 381.10(a)(7)(b), (c).
A-22.................................. None Sec. 381.11(a).
A-23.................................. None Sec. 381.12.
----------------------------------------------------------------------------------------------------------------
6. Sanitation
The meat regulations require the mandatory use of 180 deg.F water
to clean and disinfect slaughter equipment in marry instances. There
are no such requirements in poultry. The basis for this differences is
``unknown.''
------------------------------------------------------------------------
Page No. Meat CFR Poultry CFR
------------------------------------------------------------------------
D-4........................... Sec. 308.3(d)(4) Sec. 381.50(b).
D-12.......................... Sec. 308.8(c) Sec. 381.58(a).
------------------------------------------------------------------------
7. Mechanically Separated Product
Mechanically Separated (Species) (MS[S]) meat product conforming to
prescribed compositional standards is permitted to be used in limited
quantities in certain products. Label and use restrictions are
required, along with calcium content testing and labeling. A QC program
is necessary for a plant to produce MS(S). Mechanically separated
poultry (MSP), a comparable product, is permitted to be used in
unlimited quantities in poultry products and labeled as chicken or
turkey. Bone content is the only compositional standard required. A
court decision declaring that mechanically separated meat product is
not ``meat,'' coupled with relatively quick, large-scale introduction
of MSP into various poultry products, appear to be the primary bases
for these regulatory differences.
------------------------------------------------------------------------
Page No. Meat CFR Poultry CFR
------------------------------------------------------------------------
L-75......................... Sec. 318.18 None.
M-2.......................... Sec. 319.5(a) Sec. 381.117(d).
M-3.......................... Sec. 319.15(c) Sec. 381.160.
M-4.......................... Sec. 319.300 Sec. 381.167.
M-5.......................... Sec. 319.301 Sec. 381.167.
Sec. 319.302 Sec. 381.167.
Sec. 319.304 Sec. 381.167.
M-6.......................... Sec. 319.305 Sec. 381.167.
Sec. 319.311 Sec. 381.167.
Sec. 319.312 Sec. 381.167.
M-8 to M-10.................. Sec. 3195(e)(1)-(2) None.
M-10 to M-11................. Sec. 319.6 None.
M-17......................... Sec. 319.105(b) None.
------------------------------------------------------------------------
8. Cooking Temperatures
There exist regulatory requirements (and attendant controls and
procedures that go with them) concerning time/temperature cooking
relationships for the control of salmonella in beef, and for the
control of trichina in pork There is not a similar approach to cooking
poultry rolls, which only require cooking to 160 deg.F. or to 155
deg.F if cured and smoked. The basis for these differences is that
certain meat products are eaten ``rare'' by consumers; poultry products
are generally not eaten ``rare.''
------------------------------------------------------------------------
Page No. Meat CFR Poultry CFR
------------------------------------------------------------------------
L-35 to L-36.................. Sec. 318.17(a)-(c)(3) Sec. 381.150.
L-71 to L-75.................. Sec. 318.17(d)(1)-(k) None.
------------------------------------------------------------------------
9. Use of Skin
The poultry regulations provide that poultry carcasses, cuts, and
products may contain skin. The percentage permitted ranges from 8 to 20
percent (natural proportions) and may be added to the product without
label declaration. In meat, pork jowls with attached skin is permitted
in processed products with a proper label declaration. Detached skin is
not permitted. The poultry regulations also permit the use of skin in
natural proportions in poultry burgers and patties; hamburger must be
made of beef of skeletal origin. Traditional poultry industry practice
is the primary basis for these differences.
------------------------------------------------------------------------
Page No. Meat CFR Poultry CFR
------------------------------------------------------------------------
M-3............................. Sec. 319.15(b) Sec. 381.160.
M-46............................ None Sec. 381.168.
------------------------------------------------------------------------
10. Chilling and Freezing Requirements
The poultry regulations contain numerous requirements concerning
time/temperature relationships for the chilling or freezing of poultry
carcasses and parts. These requirements consume inspector time to
assure compliance. There are no such requirements for meat carcass
chilling or freezing. The basis for these differences is traditional
industry practice.
------------------------------------------------------------------------
Page No. Meat CFR Poultry CFR
------------------------------------------------------------------------
F-6 to F-10.................. None Sec. 381.66(b)-(c)(5).
F-17 to F-18................. None Sec. 381.66(c)-(f)(6).
------------------------------------------------------------------------
11. Standards of Identity
In similar meat and poultry products with standards of identity,
the required percentage content of cooked poultry is usually less than
the meat content. For examples ``(meat) hash'' must contain a minimum
of 35 percent fresh meat; ``(poultry) hash'' must contain a minimum of
30 percent cooked, deboned meat. The basis for these differences is
traditional industry practices.
------------------------------------------------------------------------
Page No. Meat CFR Poultry CFR
------------------------------------------------------------------------
M-4............................ Sec. 319.300 Sec. 318.167.
M-5............................ Sec. 319.301 Sec. 318.167.
Sec. 319.302 Sec. 318.167.
Sec. 319.304 Sec. 318.167.
M-6............................ Sec. 319.305 Sec. 318.167.
Sec. 319.311 Sec. 318.167.
Sec. 319.312 Sec. 318.167.
M-7............................ Sec. 319.313 Sec. 318.167.
------------------------------------------------------------------------
12. Moisture Limitations in Processed Products
Moisture limitations in processed products tend to favor poultry.
For example:
(a) Fresh Meat Sausage must have 3 percent added water;
Fresh Poultry Sausage has no limit.
(b) Cooked Meat Sausage must have 40 percent combined
fat and water; Cooked Poultry Sausage has no limit.
(e) Pork Ham is protein fat free (PFF) controlled for both Domestic
and Foreign Imports; Turkey Ham has no PFF control.
(d) Meat Roast must have label declaration of any added moisture;
Poultry Roast may contain 10 percent added moisture without
label declaration.
The Appendix's entry under ``basis for no compatible [poultry]
regulation,'' with regards to items (a)-(c), is ``unknown.'' With
regards to item (d), the ``basis for the difference'' is traditional
industry practices.
------------------------------------------------------------------------
Page No. Meat CFR Poultry CFR
------------------------------------------------------------------------
M-21........................... Sec. 319.140 None.
M-26........................... Sec. 319.180 None.
M-14 to M-15................... Sec. 319.104 None.
M-16 to M-18................... Sec. 319.105 None.
L-76 to L-83................... Sec. 318.19(a)(5) None.
P-39 to P-44................... Sec. 327.23 None.
------------------------------------------------------------------------
method of evaluation
Figure 1 is a Flow Diagram of the method of evaluation.
[GRAPHIC] [TIFF OMITTED] T01MA04.038
Identify Regulatory Requirements for Meat and Poultry
RTI reviewed Title 9, CFR, Subchapters A (Mandatory Meat
Inspection, Parts [301-335]) and C (Mandatory Poultry Products
Inspection [Part 381]) \3\ to identify all substantive requirements for
meat and poultry, respectively. The substantive regulatory requirements
reviewed correspond to 18 specific subject areas, as listed in the
Appendix table of contents. All of Title 9, CFR, Subchapters A and C,
was included in the study except 9 CFR Sec. 301.1-2, Sec. 302.1-3,
Sec. 303.2, Sec. 318.21, Sec. 318.300-311, Sec. 321.1-2, Sec. 331.1-6,
Sec. 318.1-7, Sec. 318.153, Sec. 381.185-186, Sec. 318.220-225, and
Sec. 318.300-311. These sections were not included in the comparison
because the regulations for meat and poultry were essentially identical
in composition or the sections were not considered substantive
regulatory requirements for comparison purposes (i.e., they were not
included among the required subject categories listed in the Appendix
table of contents). RTI used FSIS's Document Issuance Automated Library
System (DIALS) to retrieve and download the most current issuance of
the CFR.
---------------------------------------------------------------------------
\3\ Revised as of January 1, 1992, with ancillaries.
---------------------------------------------------------------------------
Division of Comparable and Non-Comparable Meat and Poultry Regulatory
Requirements (Part I vs. Part II)
After identifying all substantive meat and poultry regulatory
requirements, the RTI staff input regulations into tables using word
processing software. The tables were organized by subject category
(e.g., ``Exemptions'') and visually reviewed for comparability. The
meat regulations were left essentially intact, and poultry regulations
were electronically matched with the appropriate meat regulation. Any
meat or poultry requirement not having a similar counterpart
requirement was therefore also identified. Accordingly, the regulatory
requirements in each subject category are separated into two pans
(e.g., the subject category ``Exemptions'' is broken into ``Exemptions
[Part I]'' and ``Exemptions [Part II]''). Part I contains the meat and
poultry requirements win comparable counterparts, and Part II contains
the meat and poultry requirements without comparable counterparts.
Identify and Classify Differences of Comparable Meat and Poultry
Regulatory Requirements (Part I)
Comparable meat and poultry requirements in each category were then
reviewed and their differences identified. If there were no differences
(i.e., the regulatory requirements were identical), the meat and
poultry counterparts were identified as ``same'' and no further
consideration was given. If differences existed, but the burden on the
producer for such differences was deemed insignificant, the meat and
poultry counterparts were identified as ``minor'' and no further
consideration was given. If differences existed that were deemed
significant, then they were summarized and listed in the table.
For the meat and poultry counterparts with significant differences,
a classification was then made as to the ``basis for differences.'' Any
notes or explanations germane to the differences were also included for
informational support. The bases for differences were classified in the
following order:
1. Statutory.--RTI examined the United States Code (primarily 21
U.S.C. Sec. 451-Sec. 470 and Sec. 601-Sec. 695) to determine whether
each significant difference identified was based firmly on differences
in the statutes. If it was, we noted this fact and gave the U.S. Code
citation reference. No further consideration was given to regulatory
differences based on statutory differences.
2. Inherent Specie or Technical Differences.--Significant
regulatory differences between species without a clear basis in
statutory differences were further assessed to determine any inherent
specie or technical-related basis for the differences. Inherent specie
differences (e.g., size, weight, age, type/severity/susceptibility of
disease, etc.) or variations in safety, inspection, slaughter,
processing, or labeling due to inherent specie differences were the
primary bases identified. RTI applied a ``general acceptance'' rule in
making these determinations. If we judged that objective and
knowledgeable professionals would generally agree that a regulatory
difference can be based on one or more inherent differences in specie-
related food safety and/or production methods, we stated so. No further
consideration was given to differences of this type.
3. Other Reasons or Unknown.--For significant differences without
apparent statutory, inherent specie or technical basis, other reasons
for the differences were explored. The primary reasons identified were
traditional or historical industry practices that were codified into
the regulations as the two industries grew and developed. Institutional
and operational agency bases for differences were also identified. If
no clear basis for a significant difference between meat and poultry
regulatory requirements could be identified, then we so noted (e.g.,
response of ``unknown'').
Classify the Basis for Non-Comparable Meat and Poultry Regulatory
Requirements (Part II)
For non-comparable meat and poultry regulatory requirements, no
differences exist to identify or classify. Instead, for these
requirements we classified the ``basis for no comparable regulation.''
We followed the same evaluative format as was done for comparable meat
and poultry regulatory requirements to determine their ``basis for
significant differences.'' In other words, the ``basis for no
comparable regulation'' was identified as (1) Statutory, (2) Inherent
Specie or Technical Reason, or (3) Other Reasons or Unknown.
It should be noted that the essential question being answered for
non-comparable meat and poultry requirements is much different than the
question being answered for those meat and poultry requirements that
are comparable. Namely, identifying the ``basis for no comparable
regulation'' (or the reason why there is no meat/poultry counterpart)
is not the same as identifying the ``basis for differences.'' There
exist no requirements for which to identify differences. Thus the
choice of evaluative bases (1), (2) or (3) for non-comparable
requirements will not necessarily be the same as when they are being
chosen for comparable requirements.
______
Memorandum From Terry L. Medley
To: Patricia Jensen, Acting Assistant Secretary, Marketing and
Inspection Services
From: Terry L. Medley, J.D., Acting Administrator
Subject: Comparison of Meat and Poultry Regulations
In response to complaints from industry, some of them long-
standing, that the Agency is ``not regulating meat and poultry
equitably,'' FSIS contracted out to Research Triangle Institute (RTI) a
comparison of the meat and poultry regulations. The report (see last
tab) found many differences in the two laws and narrowed down to 12 the
areas of the law in which they believed there were significant
differences in the regulations.
The Agency (after combining two of the areas to simplify
presentation and analysis), has studied these areas of the law to
determine whether, in the actual conduct of inspection, they result in
an inequitable application of the inspection laws, and, if so, what
might be done to mitigate the inequities. The attached paper contains
the FSIS analysis of the RTI results and some options for your
consideration.
Although in this effort the Agency's primary focus has been on
equity, it has also had to consider the underlying purpose of the laws
to assure that all proposed options meet the Department's
accountability for effective meat and poultry inspection as well as for
an equitable application of the law. As indicated in Figure 1 there
were problems in four areas with how well the Agency was meeting the
underlying objectives of the law, and in one of those areas, there were
both effectiveness and equity problems. FSIS has assumed in its
analysis that the Agency's responsibility is, first, to assure the
objectives of these laws are being effectively met, and, second, to
make the enforcement of the laws as equitable as possible.
The analysis helps to clarify the meaning of ``equity'' as an
Agency regulatory responsibility and why there is an appearance of
inequity in many instances where actual inequity does not exist. The
following factors contribute to the appearance of inequity where none
may exist:
--Some differences in the law are justified by the fact that the two
industries deal with different animals and have different
production processes.
--Some laws may be stated differently, but in application are
enforced to the same objective.
--Laws for market protection were designed to protect the markets
within each industry, not between them. These laws use industry
standards, and the Agency has no authority to reconcile those
standards between industries.
Time has obscured the differences in the way the laws originated
for regulation of these two industries. Many enforcement standards in
the meat laws were generated to protect against changes in certain meat
products or bring about desired changes in meat production processes.
When the poultry laws were passed at a much later date, many of those
changes were already an accepted part of industry practice and were not
specified in the law. In most of these areas, the Agency has not
interpreted the differences in the law to reflect an intended
difference in objectives and has tried to enforce the law to the same
end in both industries. Thus, this analysis, in looking at Agency
practice as well as the laws themselves, has found that not all
differences in the laws result in inequitable regulation.
______
----------------------------------------------------------------------------------------------------------------
Status of Enforcement
---------------------------------------------------------
Tab/Area of regulation Effectiveness
No inequity Inequity \2\ Effectiveness and inequity
\1\ question \3\ question \4\
----------------------------------------------------------------------------------------------------------------
1. Mechanically separated product..................... ............ ............ ............. X
2. Humane slaughter................................... X ............ ............. .............
3. Use of skin........................................ X ............ X .............
4. Standards of composition or identity............... X ............ ............. .............
5. Sanitation......................................... X ............ ............. .............
6. Slaughter inspection modernization................. ............ X ............. .............
7. Cooking/Heating temperatures....................... X ............ ............. .............
8. Removal of contamination........................... ............ X ............. .............
9. Carcass chilling procedures: moisture limitations.. ............ ............ X .............
10. Exemptions........................................ ............ X ............. .............
11. Processed Products: moisture limitations.......... X ............ X .............
----------------------------------------------------------------------------------------------------------------
\1\ Differences in regulations where no inequity was found in the application of the law.
\2\ Differences in regulations where an inequity was found in the application of the law.
\3\ Differences in regulations which raise a question as to whether the law is being enforced as effectively as
possible.
\4\ Differences in regulations which raise both a question of inequity and effectiveness.
mechanically separated product
I. Issue
Mechanically Separated (Species) (MS[S] \1\)--a meat food product--
is strictly regulated as to its preparation, composition, usage, and
labeling; mechanically deboned poultry (MDP) is not. These differences
raise two policy issues. The first is whether current regulations are
adequately protecting consumers. The second is whether different
regulatory treatment for these similar substances is justified. The
meat industry claims, and has sued the Department on this point, that
differences in USDA regulations are unjustified.
---------------------------------------------------------------------------
\1\ Mechanically Separated (Species) is a generic term. Specific
products would include Mechanically Separated Beef, Mechanically
Separated Pork, etc. Originally, this product was known as Mechanically
Deboned Meat. Other names have been used or proposed over the years.
For simplicity, this paper uses only the current term.
---------------------------------------------------------------------------
II. Background
``Mechanical Separation'' and ``Mechanical Deboning'' are methods
of using machinery to separate tissue from meat and poultry bones to
produce a very finely ground substance which contains bone, bone
marrow, and certain minerals as well as muscle tissue. Before this
relatively recent innovation, it was not economically feasible to use
these tissues in meat and poultry products.
Mechanically Separated (Species) became the subject of consumer
criticism in the mid-1970's after USDA proposed, in order to equate
meat with poultry policy, to allow its use in meat products and let
processors label it as beef, pork, etc., without qualification to
explain that it was not exclusively muscle tissue. This criticism led
to a lawsuit in which the court found that MS(S) was not ``meat''
within USDA's regulatory definition and that it was an added substance
which must be identified in the product label ingredient list.
After the lawsuit, USDA undertook to resolve three consumer
protection issues raised by mechanically separated products.
--Does the product present inherent health hazards?
--Is the product a unique ingredient that should be identified
separately to distinguish it from ``beef,'' ``pork''
``chicken,'' etc.?
--Should use of the product be limited, i.e., should it be restricted
to a certain percentage of the foods in which it is used?
As to the first point, scientific studies established no unique
health risks associated with the mechanical separation technique.
However, it was determined that MS(S) is sufficiently different from
muscle tissue meat in consistency and composition to require separate
labeling. Usage limitations were also found to be necessary.
These findings led USDA to issue extensive regulations in 1978
which set preparation, composition, usage, and labeling constraints for
MS(S) and required that it be produced only under a strict quality
control program to be approved by the Agency. This rule assigned a
definition and standard of identity for MS(S) which necessitated it be
listed separately from meat in the ingredients statement of food
product labels and on the principal display panel.
Additional rulemaking in 1982 reaffirmed the Department's position
that MS(S) was not ``meat.'' USDA further determined it was sufficient
for processors to declare this substance in the product ingredient
statement unless its use altered basic product characteristics, in
which case it had to be identified on the principal display panel.
During this same period, MDP underwent product development
separately from MS(S) without USDA regulation. Early distinctions in
regulatory treatment were largely due to historical differences in how
the two industries used these products and the way in which they came
to public attention. One significant difference is that MS(S) was being
considered for use in products that had previously contained only
muscle meat.
The use of MDP in poultry hotdogs created less controversy. Poultry
hotdogs did not exist before they were made with this substance, and
consumers had no prior expectations about the formulation.
Nevertheless, the same consumer protection issues were applicable to
MDP. USDA, during its 1982 rulemaking for MS(S), promised to establish
similar rules for the regulation of MDP at a later date. In 1983, the
Agency developed, but did not publish in the Federal Register, a
proposed regulation for MDP that paralleled the existing MS(S) rule.
Continuation of the differences in regulatory treatment of MS(S) and
MDP since that time has been attributable to decisions made at
political levels in the Department. The effect of those differences has
been a reluctance for processors to use MS(S) while MDP use has
expanded.
For example, the meat industry has not used much MS(S) in product
formulations. It claims that consumers will not buy products if they
see MS(S) on the label. Similarly, the poultry industry claims that if
they had to label MDP as a poultry hotdog ingredient, consumers will
think the product has changed and they would stop buying it. FSIS has
no information to verify these assumptions. FSIS has no information to
show how much attention consumers pay or will pay to ingredients
statements on a label. There is some question as to whether consumers
know what mechanically separated/deboned products are.
If, as the two industries contend, people will not buy a product
when its ingredients are accurately listed on the label, the current
regulations requiring disclosure for MS(S) are clearly needed and
consideration should be given to requiring MDP labeling as well.
Additional health issues concerning MDP also need further analysis.
Earlier studies concluded there are no unique health risks in the
use of mechanically separated product when it is used as an incidental
ingredient in meat food products. This finding does not necessarily
extrapolate to MDP which is frequently the main ingredient in poultry
products. Known issues such as the calcium and cholesterol content of
MDP will be resolved when nutrition labeling regulations take effect.
Some evidence exists that the meat industry is getting around USDA's
extensive MS(S) regulatory requirements by adding MDP to meat food
products in what are now allowable proportions of ``poultry.''
In recent developments, the Agency has been sued by several sausage
manufacturers who have argued that imposing labeling requirements on
MS(S) while not imposing similar requirements on MDP is inconsistent
and inequitable. In response to this lawsuit, FSIS issued an Advance
Notice of Proposed Rulemaking (ANPR) in June 1993. The ANPR solicited
comments, information, scientific data, and recommendations regarding
the need for labeling poultry products produced by mechanical deboning
and products in which MDP is used. Over 2,700 responses were received.
A little over half the comments favored labeling of MDP, while the
remainder did not. No compelling health and safety issues were raised,
leaving what is substantially a consumer protection issue wrapped in
the cloak of an economic controversy.
Because of the response to the ANPR, on March 3, 1994, FSIS
published another ANPR seeking public comments on the Agency's
tentative positions in pursuing the development of a proposed rule on
the definition and labeling of poultry products produced by mechanical
deboning and also by a more advanced mechanical separation system. A
proposed rule was also published by FSIS on that date regarding meat
products separated by mechanical means more advanced that the previous
method of producing MS(S). This proposed rule declares products
produced through the use of advanced separation machinery as ``meat''
without use limitations or specific labeling. Advanced meat/bone
separation machinery and recovery systems do not crush, grind, or
pulverize bones to remove tissue from carcasses. Such operations must
be conducted under a USDA approved QC program. This proposed standard
would not affect the current standard for MS(S).
FSIS received 108 comments on the ANPR regarding MDP and 28
comments on the proposed rule regarding use of advanced separation
systems for the production of meat. In compliance with a court order to
decide the outcome of these issues, FSIS anticipates issuing a proposed
rule on MDP and a final rule on the production of meat through use of
advanced separation systems in August 1994.
III. Options
1. Propose regulatory requirements for MDP which are comparable to
those for MS(S)
2. Maintain existing regulatory differences in the treatment of
MS(S) and MDP.
3. Reassess how USDA should regulate both MS(S) and MDP in light of
the new nutrition labeling requirements.
humane slaughter
I. Issue
Federal meat inspection regulations contain substantial provisions
to govern the humane slaughter of livestock They provide for the
characteristics of livestock pens, driveways, and ramps; descriptions
of approved methods of slaughter; and procedures for tagging equipment
and facility hazards that could lead to the inhumane treatment of
animals.
Federal poultry inspection regulations also require the humane
slaughter of poultry. The applicable regulation simply states that
poultry will be slaughtered in accordance with ``good commercial
practices'' and that birds must have ceased breathing prior to carcass
scalding.
These differences in regulations reflect the fact that the statute
for meat inspection contains specific requirements for humane slaughter
of livestock, but the poultry inspection statute is silent on humane
slaughtering.
It has been suggested that the differences in these regulations are
resulting in an unjustified economic advantage for the poultry
industry.
II. Background
Humane slaughter regulations have two objectives: the avoidance of
unnecessary psychic or physical pain to the animal, and the avoidance
of harm to human beings or animals that could result from the behavior
of an excited animal. These objectives are more easily (i.e.,
technically and economically) accomplished with small animals like
chickens and turkeys than they are with relatively large animals like
hogs and cattle. This and the different timing of the passage of the
meat and poultry statutes probably account for the differences in the
statutory approach to humane treatment. Greater regulatory
specification was needed for livestock to help USDA enforce FMIA
statutory requirements that amounted to a considerable economic
investment for the producers that did not already meet them. By the
time the poultry inspection statutes were passed, appropriate humane
treatment practices were already established in the industry, and
Congress accepted them without including them in the legislation.
FSIS enforces humane slaughter practices in both the meat and
poultry industry through facilities and equipment approvals and through
in-plant inspection. Although not required by regulation, the slaughter
process used by most poultry processors is parallel to that used for
livestock, i.e., birds are stunned before they are killed. Other
poultry producers, like meat producers, use ritual slaughter methods
authorized by the law. Therefore, the Agency does not require
additional regulations or a new law for the poultry industry to meet
humane slaughter objectives or to correct an inequitable economic
advantage for the poultry industry.
Congress passed up at least three opportunities (in 1958, 1967, and
1978) for enacting humane slaughter requirements for poultry parallel
to those for meat. However, the increased interest in animal welfare
has generated new interest from Congress in animal welfare legislation.
One bill, H.R. 649, titled the ``Humane Methods of Slaughter Act of
1993,'' introduced by Congressman Jacobs (D-IN), would provide
slaughter requirements parallel to those for livestock Specifically,
the new law would specify that poultry be ``rendered insensible to pain
by electrical, chemical, or other means that is rapid and effective
before or immediately after being shackled or otherwise prepared for
slaughter.''
USDA has taken a neutral position on the Jacobs bill. It has found
no reason to oppose this legislation, but, at the same time, has no
evidence that a new law is necessary to correct inhumane handling
conditions in the poultry industry.
III. Opinions
1. Ignore the issue. The Department can ignore this issue on the
basis that (a) different regulatory specifications are appropriate for
different species, (b) USDA is presently meeting its responsibility
with respect to humane slaughter, (c) FSIS is applying the law
equitably to meat and poultry, and (d) there is no economic advantage
accruing to the poultry industry as a result of the way the laws are
specified.
2. Support new legislation. Alternatively, USDA could support new
legislation for humane poultry slaughter that is parallel to that for
livestock New legislation for poultry would provide a regulatory
standard which would help FSIS settle disputes if it finds a plant is
not using industry-accepted standards. New legislation, like H.R. 649,
would not have a significant economic impact upon the poultry industry
because most establishments are already using methods required by the
bill.
use of skin
I. Issue
USDA regulations permit the addition of detached skin to poultry
products at levels ranging from 8 percent for raw boneless turkey
thighs to 25 percent for cooked chicken rolls. Poultry processors are
not required to label skin as a separate ingredient unless the amount
added exceeds natural proportions of the bird species used, as defined
by USDA regulations.
Detached skin may not be added to meat food products. This
restriction is based upon the regulatory definition of ``meat,'' which
is described as skeletal muscle tissue ``with or without the
accompanying and overlaying fat, and the portions of bone, skin, sinew,
nerve, and blood vessels which normally accompany the muscle tissue and
which are not separated from it in the process of dressing.'' [emphasis
added]
It has been suggested that the difference in these regulations
gives an economic advantage to the poultry industry.
II. Background
The difference in the treatment of poultry and livestock skin in
USDA regulations probably is attributable to the fact that poultry skin
has customarily been considered to be part of the bird that may be
eaten, while livestock skin has not customarily been used for food,
except for specialty products such as ``popped'' pork rinds.
The regulatory definition of meat actually permits a natural level
of skin to be left on the carcass, but few processors choose to do so.
Thus, the interest in detached skin must indicate that the meat
industry would like to use detached skin a ``disguised fashion,'' as
the poultry industry does, as a substitute for muscle meat. Therefore,
judging whether or not there is an inequity requires that we explore
the two industries' positions within the total context of their
opportunity to substitute cheaper meat or byproducts for skeletal
muscle meat, not just for their opportunity to use detached skin.
Although detached skin may not be added to meat products, attached
skin and other muscle tissue components are allowed. These include beef
cheek meat, head meat, and heart meat. Further, products such as
frankfurters may contain a substantial proportion of meat by-products
and fat. The amount of fat is not contained in the ingredient
statement. Conversely, only poultry hearts, gizzards, and livers may be
added to poultry products. It is thus difficult to contend that the
difference in regulations with respect to detached skin leaves the meat
industry without an equal opportunity to substitute cheaper products
for skeletal muscle meat.
The issue that FSIS should be considering is whether the use of
non-skeletal muscle tissue substitutes is adequately communicated to
the consumer whose expectation is that ``meat'' and ``poultry'' are
essentially skeletal muscle tissue products.
III. Options
1. Maintain status quo. Use of skin is not the central issue.
2. Require that use of detached skin be shown in the ingredient
statement of all meat and poultry products.
3. Initiate a study of whether the consumer has adequate
information on all products in which cheaper meat and poultry
components are substituted for skeletal muscle meat.
standards of composition or identity
I. Issue
Some meat products have a poultry ``counterpart.'' For example,
chili with beef is paralleled by poultry chili, meat stew by poultry
stew, and so on. Although these products may be quite similar except
for their livestock species or poultry content, USDA standards of
composition or identity \2\ for poultry products may require a
different percentage of poultry than the same-named meat version
requires of meat.
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\2\ Standards of composition and standards of identity are the two
types of food standards. Food standards are used as labeling mechanisms
by both the meat and poultry statutes. Food standards are product names
used to protect products whose makeup and composition has been
established by industry practice by requiring similar products that
differ slightly in recipe to use a different name. Standards of
composition identify the minimum amount of meat or poultry required in
a product recipe. Standards of identity, on the other hand, set
specific requirements for a food's make-up: the kind and minimum amount
of meat or poultry; maximum amount of hit or moisture; and any other
ingredients allowed. Therefore, one might consider these standards as
``content and labeling requirements.''
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For example, ``beef stew'' must contain at least 25 percent beef
computed on the weight of fresh meat. Poultry stew, on the other hand,
must contain 12 percent cooked deboned poultry of the kind used. In
this example, standards of composition are computed for raw meat (which
will be reduced in weight by processing) while poultry standards are
based upon cooked poultry (which has already been reduced in weight by
processing). Thus, the real difference between these products is much
less than appears from the percentage alone.
II. Background
Both the Federal Meat Inspection Act (FMIA) and the Poultry
Products Inspection Act (PPIA) permit the Secretary to issue food
standards to protect markets from products which have standard names
but have less than the commonly expected ingredients and thus compete
unfairly with properly labeled foods.
To accomplish that statutory goal, the Agency bases all of its
regulatory standards of composition or identity on pre-existing
industry recipes and consumer expectations. For example, poultry stew
existed as a standard industry product prior to 1957 when mandatory
Federal inspection of poultry began. That recipe was adopted by USDA as
a standard. Beef stews, which have been under Federal inspection since
1906, have traditionally been formulated in an entirely different
manner, and they have a different USDA standard.
The following evidence refutes the assertion that the different
standards for ``same-named'' items represent an inequitable application
of the law.
First, meat and poultry products with identical names are not the
same foods, and we have no evidence that consumers see them as
interchangeable. In the marketplace, products tend to compete more
within their type than across species. For example, a consumer who is
shopping for chicken stew may compare a national brand with a store
brand but would not necessarily consider a beef alternative. In any
case, the standards are each ``industry's'' standards and USDA has no
authority to reconcile the two standards as an end in itself.
Second, differences between the standards of composition for meat
and poultry products are to some extent accounted for by different
methods of computing percentages. Apparently higher amounts of meat
vis-a-vis poultry in same-named products would be largely offset by a
weight reduction of approximately 30 percent as the meat product is
processed. This natural reduction brings the percentage of meat and
poultry in like products to a comparable level. Furthermore, red meat
contains more fat than poultry and more may be needed in a formulation
to reach an expected protein content.
Third, although historically USDA has been a gatekeeper at the
marketplace door, setting product standards of composition that control
and, in some respects limit competition, the role of food standards has
been questioned in today's market. Food standards were originally used
to make simple distinctions in the quality of a product type, for
example to distinguish preserves from jelly and mayonnaise from salad
dressing. As the food processing industry has grown, the number of
products in various food categories has increased enormously, and the
public has changed its taste for certain ingredients. Established; food
standards are increasingly looked upon as preserving some markets at
the expense of desirable innovations and consumer interests, and
therefore, their future as a viable regulatory tool is in question.
III. Option
Maintain status quo. Meat and poultry product standards of
composition are generally comparable at present with most differences
accounted for by historical differences in formulation, separate
methods of computing percentages, and consumer expectations.
sanitation--water temperature
I. Issue
The meat and poultry regulatory requirements on the use of hot
water in sanitization differ in that the meat regulations specify how
hot the water must be, while the poultry regulations do not. Both the
National Livestock and Meat Board and the American Meat Institute have
suggested in papers submitted to FSIS that this is economically
advantageous to the poultry industry. The organizations have not,
however, submitted data supporting their assertions or explanations of
a specific inequity.
II. Background
The Federal meat inspection-regulations require the use of 180
deg.F. water or approved chemicals for cleaning floors, walls,
inspection equipment, and other equipment that have become contaminated
through contact with diseased carcasses. In addition, butchers and
others who handle diseased carcasses and parts are required to use
water heated to 180 deg.F. or approved chemicals for the cleaning of
knives and implements.
The poultry products inspection regulations do not prescribe a
particular temperature for water needed to clean floors, walls,
inspection equipment, or other equipment that may have become
contaminated by diseased carcasses. Industry practices would make such
a requirement difficult to implement. Presently, the poultry industry
is required to sanitize all evisceration equipment after each bird is
opened.
III. Options
1. Amend the poultry regulations to require use of 180 deg.F.
water for cleaning equipment and facilities that have contacted
diseased carcasses.
2. Make no changes. There is no demonstrable reason to amend
regulations, with respect to the temperature of water used for surfaces
that may contact diseased carcasses.
3. Broaden the issue beyond diseased carcasses--undertake a review
of the need to specify water temperature requirements for purposes of
dealing with microbiological contamination.
slaughter inspection modernization
I. Issue
Current regulations provide for the use of statistical quality
control procedures known as Finished Product Standards (FPS) for
inspecting young chickens and turkeys that are inspected using
slaughter quality control inspection systems. FPS are applied by plant
employees to determine if the production process is under control, and
the use of FPS is monitored by FSIS inspectors. The use of FPS in the
newest inspection processes represents the Agency's intention to
modernize inspection by (1) focusing on process control rather than
product compliance, and (2) having plant employees apply the systems
that control the production process and FSIS inspectors monitor the
plant's application of those systems.
FPS allows plants more control over their line speed. The question
arises whether the meat industry is being unfairly disadvantaged by not
having FPS procedures available to it.
II. Background
FPS have been developed as part of the inspection modernization
needed to accommodate changes in the poultry industry, which has
evolved and grown significantly in the last few decades. Vertical
integration in the poultry industry has resulted in a high degree of
uniformity among young chickens and made it possible to increase the
efficiency of production lines. Inspection modernization has,
therefore, been occurring in some areas of the poultry industry since
the early 1980's, and along with it, the use of statistical procedures
to control process.
Because of the lack of integration in the red meat industry and the
correspondingly lower degree of uniformity among red meat animals,
inspection modernization has proceeded at a slower pace than in the
poultry industry. Even so, the cattle industry and the pork industry
have developed to the point where in the professional opinion of Agency
experts more efficient inspection systems that use statistical quality
control procedures, to control process such as FPS, can be introduced.
The Agency attempted to do this in 1988 by proposing rules for the
streamlined Inspection System for Cattle, which included FPS. The
system had been tested for some years and was found by an independent
team of experts and the National Academy of Sciences to be technically
satisfactory. However, the proposal was withdrawn in 1992 in response
to political pressure, leaving the industry without FPS. (It has been
alleged that the Government was ``turning inspection over to
industry.'') In the judgment of Agency experts, however, statistical
quality control procedures, such as FPS, can be implemented effectively
in the meat industry and are likely to be a component of future
inspection systems.
III. Options
1. Take no action. There is no feasible way to mandate the use of
FPS in the livestock industry independent of the Agency's present,
broader effort to modernize livestock inspection by designating sorting
and system monitoring responsibilities based on solid scientific data.
2. The Agency, through HACCP and Agency guidelines, can encourage
the development and use of FPS by the industry on a voluntary basis.
cooking/heating temperatures
I. Issue
Generally, FSIS' policy is that products represented as being
cooked must in fact be cooked to a temperature with associated time
duration sufficient to destroy pathogenic organisms that may be
present. The RTI study noted that cooked poultry products must be
cooked to an internal temperature of 160 deg.F. whereas only a few
meat food products must be cooked to a specified--generally much lower
than 160 deg.F. minimum temperature.
II. Background
All cooked poultry products must be cooked to an internal
temperature of 160 deg.F., except for certain partially cooked
products labeled as such and cured products which must be heated to a
minimum internal temperature of 155 deg.F. (9 CFR 38.150). Because of
the widely acknowledged presence of salmonella and other potentially
harmful bacteria in fresh poultry, the requirement for a minimum
cooking temperature is generally accepted by the industry, and 160
deg.F. is an accepted industry standard.
Unless labeled as ``baked,'' there is no minimum cooking
temperature for meat food products generally. If ``baked,'' a meat
product must be cooked to 160 deg.F. unless it is a pork product,
which must be heated to 170 deg.F. (9 CFR 37.8(b)(10)). Otherwise,
only the following three meat products have minimum heating temperature
requirements:
1. Pork products that may appear to have been cooked must be heated
(or treated in one of the other specified ways) to destroy trichinae.
2. Cooked Roast Beef or Corned Beef must be cooked in accord with a
time-temperature chart, with temperatures permitted as low as 130
deg.F. for an appropriate duration to destroy salmonella.
3. Cooked, uncured meat patties must be cooked in accord with a
time temperature chart, with temperatures permitted as low as 151
deg.F. for an appropriate duration to kill a variety of pathogenic
bacteria (e.g. salmonella, E. coli 0157:H7 and Listeria Monocytogenes)
associated with undercooked or mishandled hamburgers.
Although there are only three regulations on point, Agency labeling
guidelines, which supplement the regulations, among other things
provide that ``ham commodities'' are ``completely cooked'' at 158
deg.F. Also, a recent Agency policy statement, comparing prescribed
cooking temperatures at Federally inspected establishments with those
recommended for retailers/restaurants/institutions and for household
consumers, generally recommends higher cooking temperatures by
retailers, etc., and consumers-where product has been handled more and
there are generally fewer controls to prevent contamination or growth
of any bacteria that may already be present.
All the minimum cooking temperatures and time-temperature cooking
charts were established by notice-and-comment rulemaking on the basis
of the best data available to the Agency. The Agency is receptive to
petitions for amending its technical regulations if new data
demonstrate the current regulations should be changed. The Agency has
received no such petitions on cooking temperatures.
There appears to be no basis for asserting that our regulations
unfairly benefit one industry over the other.
This issue must be viewed in the context of heightened public
concern about pathogens in inspected products because of the E. coli
0157:H7 outbreak from hamburger earlier this year and because of
lingering suspicions about poultry from the allegations on CBS' 60
Minutes a few years ago.
III. Options
1. Take no action. This would be justified on the basis that these
are duly promulgated food safety/public health requirements grounded on
the best available scientific data. The burden is on those who would
change these requirements to provide data showing that the change
advocated will improve food safety or provide the same level of public
health protection if the change is intended to reduce demonstrable
adverse impacts on the industry.
2. Undertake a study, in the context of our Pathogen Reduction
Program, to reassess the scientific data that relates cooking
temperatures to destruction of pathogenic organisms on all cooked
product, and recommend regulation changes accordingly. The results of
such a study would not necessarily affect the balance between
temperature requirements in the two industries.
removal of contamination
I. Issue
Meat and poultry carcasses contaminated with ingesta or fecal
material are considered adulterated and are to be condemned unless,
under inspectors' supervision, they can be reprocessed to remove the
contamination. While beef carcasses can only be trimmed, poultry
carcasses may be trimmed or washed. The beef industry asserts that
trimming, as applied, is inconsistently imposed, and leads to
unnecessary loss of product, a problem the poultry industry largely is
spared.
II. Background
The Poultry Products Inspection Act provides for removal of
contamination (``reprocessing''). The regulations prescribe the methods
by which poultry carcasses can be reprocessed. Poultry must be removed
from the line of production and washed or trimmed at an approved
reprocessing station. To receive approval for a reprocessing station,
the establishment must submit in writing to FSIS a description of the
proposed reprocessing station, and the proposed equipment to be
utilized. FSIS may suspend approval of a reprocessing station if it is
found that contaminated product is not being properly reprocessed.
This regulation was promulgated in 1978. Previously, both meat and
poultry contaminants were removed by trimming alone. The 1978 rule was
based on research conducted by USDA's Agricultural Research Service and
the Food Safety and Quality Service, the predecessor of FSIS,
supporting the industry's contention that poultry could be adequately
reprocessed using the proposed alternative methods.
Subsequently, the poultry industry and USDA have been criticized by
consumer groups and others who contend that washing merely removes
visible contamination, leaving behind invisible pathogens which still
pose a food safety risk and contribute to the spread of such bacteria
to other poultry carcasses later in processing.
The Federal Meat Inspection Act does not specify how contamination
must be removed from meat carcasses. The regulations provide that fecal
material and other visible contaminants be ``. . . removed [from meat]
in a manner satisfactory to the inspector.'' Agency policy has always
been to require fecal material to be trimmed from meat carcasses.
Recently, the meat industry and USDA have been criticized for not
doing a better job of preventing bacterial contamination of red meat.
This has led to FSIS' recent imposition of a ``zero'' tolerance for
visible contaminants on red meat carcasses, more rigorous inspector
oversight of trimming, and increased industry complaints about waste
and lack of uniform enforcement.
The Agency has recently given administrative approval for the use
of organic acid solutions in ``pre-evisceration carcass sprays.'' These
sprays are applied after hide removal and before evisceration to help
reduce the likelihood of bacterial growth. A requirement for
antimicrobial treatment, such as a spray, also is included in the
proposed enhanced poultry inspection regulations. Inspection policy has
been clear that these sprays are not to be used in lieu of trimming
where fecal/ingestion contamination is suspected or other visible
contaminants are present.
Thus, the meat industry clearly loses more product to trimming than
does the poultry industry. So, to the extent trimming is unnecessary,
there is a compelling argument to be made for permitting alternatives
to trimming for red meat carcasses.
The question is, what is unnecessary trimmings Recent public
concerns about microbiological contamination of meat and poultry argue
that any increased flexibility permitted in procedures to remove
contamination be amply supported by data.
III. Options
1. Rescind the current poultry regulations and limit reprocessing
to trimming. Such action would surely be met with strong resistance by
the poultry industry. However, those who have criticized the current
regulations would be pleased.
2. Amend the meat regulations to permit washing. This could reduce
some losses borne by the meat industry and be met with a favorable
response by industry.
3. Announce the Agency is open to consideration of new methods for
reprocessing carcasses and that the burden of providing scientific data
for any changes to current policies is on those advocating such
changes. The Agency is currently conducting research on appropriate
methods of removing microbiological contamination. Agency policy on
removal of contaminants will be influenced by the results of this
research.
carcass chilling procedures: moisture limitations
I. Issue
The Agency has long considered any weight gain in red meat
carcasses attributable to added water to be ``economic adulteration''
proscribed under the FMIA. This includes any water that may be added
during carcass chilling. Poultry carcasses, on the other hand, are
expressly permitted to gain as much as eight percent added water as a
result of chilling by immersion in water.
The red meat industry asserts this is grossly unfair. One industry
estimate asserts that this equates to a greater than one billion dollar
competitive advantage given to poultry over red meat.
II. Background
Both meat and poultry carcasses need to be chilled after the
animals have been slaughtered to prevent growth of pathogenic and other
bacteria, to which animal proteins are particularly susceptible, and
degradation of the product.
The poultry regulations expressly require chilling of poultry
carcasses to 40 deg.F. within two to eight hours, depending on the
size of the carcass. Although air chilling is permitted, immersion of
poultry carcasses in ice and water has long been the industry practice
in the United States. In promulgating poultry regulations to implement
the 1958 PPIA, USDA started with the current good manufacturing
practices in the industry. This included the rapid chilling of
carcasses by immersion in ``chill tanks'' and accommodation of a
reasonable amount of water absorption, which is considered unavoidable
by that chilling process.
The meat regulations have no express requirements for chilling of
carcasses. Because of the size of the carcasses and the much larger
volume of meat to exposed surface, immersion in water is not a
practical method for chilling red meat carcasses. Air chilling of
carcasses in large coolers has always been the industry practice.
Because of the larger volume of meat to surface, it may require up to
24 hours of refrigeration to get a carcass thoroughly chilled.
Recently, the industry has developed a method of spraying carcasses
during chilling to prevent loss of carcass weight due to dehydration.
This is permitted by the Agency as long as there is no net increase in
weight.
In addressing this issue, the Agency must consider two objectives.
The first is to assure that consumers are not being misled by the
amount of water in the products they buy. The second is to assure that
any regulation limiting water is applied equitably to the meat and
poultry industries.
The purpose of regulating water absorption in meat and poultry
products is to avoid allowing the industry to unnecessarily increase
the weight (and therefore the cost) of the product. What is
``reasonable'' water absorption for water-chilled poultry carcasses is
difficult to define precisely. However, it is clear that the eight
percent water absorption that is now the norm in the poultry industry
was not anticipated as ``reasonable'' based on the three to eight
percent range established in tests of the chilling process some years
ago. There is evidence that producers have pushed chilling technology
in the direction of ensuring the maximum allowable water gain instead
of in the direction of reducing water gain.
Changing regulations to permit no water gain in poultry would
probably require significant changes in processing facilities and have
a major economic impact on the industry and the price of poultry,
perhaps gaining little for consumers over present regulations. However,
on the basis of past tests of the water-chilling processing system, it
is likely that reductions in the average absorption of water could be
achieved with marginal changes in the process.
While it is true that the poultry industry, under current
regulations, has a better opportunity than the meat industry to deceive
the public by putting unnecessary water in its product, this does not
necessarily mean that the meat industry should be permitted to have
more water in its carcasses. To meet its consumer protection
objectives, the Department must keep added water in fresh meat and
poultry as low as possible within the constraints of the available
processing systems. If the processing systems differ, different limits
on the amount of water are not necessarily inequitable. The meat
industry does not use water chilling. Allowing no water absorption
where no water is used or allowing water consonant with the amount used
appears to be appropriate.
III. Options
1. Amend the regulations to further restrict added water in fresh
poultry. This might be done in incremental stages. The industry would
not consider this a reasonable alternative in view of their present
production technologies.
2. Amend the regulations to require some kind of label declaration
when fresh poultry contains added water.
3. Relax inspection requirements to permit some weight gain by red
meat carcasses if the industry can show additional use of water is
necessary during chilling.
exemptions
I. Issue
Both the Federal Meat Inspection Act (FMIA) and the Poultry
Products Inspection Act (PPIA) have provisions for various exemptions
from inplant inspection. In some cases, the statutory exemptions are
identical; in others they are different.
The meat inspection regulations contain exemptions from Federal
inspection for persons who slaughter livestock of their own raising,
the custom slaughter of such livestock by another person or firm,
slaughter and processing in any U.S. Territory (Guam, for example) for
internal distribution and sale, processing operations of types
traditionally conducted at retail stores and restaurants, meat
processing at restaurant central kitchens, and the preparation of meat
pizzas for service in public or private nonprofit institutions.
Poultry inspection regulations contain the same exemptions from
Federal inspection specified above plus additional exemptions for
certain enterprises engaged in intrastate commerce only. Another
difference in the two regulatory schemes is that poultry regulations
contain a clear definition of what constitutes a ``poultry product''
and is therefore subject to inspection. No parallel section exists to
define an inspectable ``meat food product.''
II. Background
The 1906 FMIA included exemptions for farmers who slaughtered
animals on the farm, for retail butchers, and for retail dealers in
meat and meat food products. These exemptions were provided to poultry
processors in 1957 with passage of the first mandatory poultry
inspection statute. Authority to exempt certain products with a meat
component was added in 1967 when the Wholesome Meat Act was passed. The
same product exemption authority was extended to poultry a year later
with passage of the Wholesome Poultry Products Act. The 1967 and 1968
laws also exempted the custom slaughter of livestock or poultry and
added new provisions for retail exemptions.
In 1985, an exemption for restaurant central kitchens became law
and in 1991 an exemption for certain pizza processors was passed. The
last two exemptions are identical in statutory language and were
implemented equally. However, the Wholesome Poultry Products Act
contains additional exemptions for poultry processing which were not
provided to meat processors by the Wholesome Meat Act. For example, the
poultry statute and USDA regulations:
--Include slaughter in the list of processing operations which are
traditional and usual for retail stores and may be conducted at
those locations without inspection.
--Exempt the slaughter and processing of poultry by a producer on his
own premises for intrastate distribution by the producer or
another party.
--Provide an exemption for slaughter and processing by a producer or
other party on his own premises for direct sale to household
consumers, hotels, restaurants, and similar institutions.
--Exempt certain small enterprises slaughtering and/or cutting up
poultry for intrastate commerce.
--Provide a detailed description of what foods with a poultry
component may be exempted from definition as a poultry product,
which has the effect of exempting them from inplant inspection.
Although the PPIA does not specifically exempt retail poultry
slaughter, FSIS exemption regulations reflect a determination that the
slaughter of poultry was, in 1968 when the Wholesome Poultry Products
Act was passed, a traditional or usual operation conducted by retail
operators and thus exempt from Federal inspection. Conversely, the
slaughter of livestock for sale in commerce was not a traditional or
usual retail operation in 1967 when the Wholesome Meat Act was passed
and that has not been permitted.
The next three poultry exemptions cited above are statutory. The
FMIA contains no parallel authority for these exemptions and none can
be allowed. Generally speaking, inspection is required unless a
specific statutory exemption exists. Since the exemptions cited above
for poultry are mandated by statute, USDA must grant them. Conversely,
USDA may not grant parallel exemptions for meat operations because the
FMIA does not sanction them.
The remaining regulatory difference is that poultry regulations
define exempt products and the meat regulations do not. Both the PPIA
and the FMIA provide the Secretary discretionary product exemption
authority for foods which (1) have only a relatively small proportion
of meat/poultry or (2) items such as sandwiches which consumers have
historically not considered to be products of the meat or poultry
industry. The statutory clauses are virtually identical.
The lack of meat food product exemption regulations which parallel
the poultry product regulations is, however, a significant difference.
Poultry processors may refer to USDA regulations for questions about
whether a product is or is not subject to inspection based upon the
percentage of poultry used in formulation. Meat processors must raise
product exemption questions on a case-by-case basis with the Agency,
which resolves them based upon policy precedents. In practice, however,
meat and poultry processors make about the same number of individual
inquiries concerning inspection or exemption regardless of the
regulation.
In 1991, USDA was required by Congress to conduct a study of
existing meat and poultry product exemptions and of a prospective
exemption for wholesale meat outlets which conduct ``simple''
processing. These studies were conducted concurrently under FSIS
supervision of a contract with the Research Triangle Institute (RTI).
The RTI study concluded that USDA product exemptions based upon a low
percentage of meat and poultry had been administered correctly.
However, the study also found that product exemptions based upon
consumer perceptions of whether the food was a product of the meat and
poultry industry (for example, sandwiches) had not been consistently
granted and that a review of all such exemptions presently in effect
was warranted. RTI also found that so-called simple processing
operations such as cut, grind, slice and repackage were not necessarily
low risk and that a blanket exemption was not appropriate.
III. Options
1. Issue ``Meat Food Product'' exemption regulations. USDA has
statutory authority to resolve the regulatory difference by issuing
parallel regulations for meat processors. Although this option would
resolve an administrative disparity, experience shows that it is not
needed to correct a regulatory equity problem.
2. The Exemptions Study has been completed and submitted to
Congress. FSIS is considering further options based upon study
findings.
processed products: moisture limitations
I. Issue
Processed products include products such as sausages, roasts or
cured products prepared from one or more kinds of meat, added water,
and/or other ingredients. The Federal meat inspection regulations
restrict the amount of water that can be added to many such processed
meat products, but the poultry products inspection regulations restrict
the added water in few comparable poultry products.
The meat industry suggests that the lack of comparable moisture
limitations for the poultry industry gives that industry unfair
economic advantage because the poultry industry profits by adding
unnecessary water (and therefore weight) to products which compete with
meat products in which unnecessary water is not allowed.
II. Background
Moisture limitation regulations were drafted not only to prevent
consumers from being cheated by having unnecessary water (and thus
weight) added to certain standardized meat products, but also to
protect the industry's market. The Agency accepted the industry
standards to determine when water was ``deceptive.'' Industry standards
were designed to prevent degradation of the product by ``unfair''
competitors and were not necessarily based on the minimum moisture
technically possible.
The differences between meat and poultry regulations with added
water restrictions resulted from the differences in the industry and in
consumer expectations. The meat products of concern here, which had
some history of ``economic adulteration,'' generally had industry
standards for moisture that the Department could use to determine when
added water was deceptive. The poultry products of concern were mostly
new products, without industry standards or demonstrable consumer
expectations and about which no complaints had been made.
Determining whether the differences in moisture content regulation
between meat and poultry are appropriate requires consideration of two
issues: (1) are deceptive practices with respect to added water in
processed products in both industries being effectively controlled; and
(2) is the law being applied equitably to both industries.
The question raised is whether, under this kind of regulation,
consumer protection is independent of or different from, industry
standards. USDA meat regulations incorporate industry standards for the
definition of ``deceptive.'' Thus, it could be concluded that poultry
industry regulations, if they were promulgated, would likewise adopt
prevailing industry standards to define ``deceptive.'' However, it
appears that this issue is moot for poultry since the regulations do
not limit moisture in processed poultry products at all. Therefore,
FSIS regulations for poultry support neither the consumer protection
nor the market protection objectives.
Without regulations for poultry, it is not possible for the Agency
to pursue consumer protection objectives, at any level, with respect to
moisture in processed poultry products. This is not an industry equity
issue, but an issue of Agency accountability to the consumer.
Without regulations for poultry, it is also not possible for the
Agency to protect the market for poultry products. This does not appear
to be an equity issue between industries. The two inspection laws
operate to protect product degradation within, not between industries.
There is, however, a possibility of inequity if a meat product with
regulatory limits on moisture content competes with a poultry product
that has no limits. There is no evidence, however, that this was the
purpose of these restrictions which appear to have had primarily a
market protection, and only secondarily, a derivative consumer
protection objective.
If we take into consideration the empirical evidence of the need
for consumer protection for processed poultry products, it should be
noted that there are no complaints about these products from consumers.
However, most of these products are new, and consumers are not
necessarily well informed about the ingredients or their composition.
If we take into consideration the empirical evidence of the need
for market protection, it should be noted that in recent years, there
has been increasing criticism of these kinds of regulations that
protect one part of an industry's market at the expense of another part
that wants to produce slightly different versions of a product that the
consumer might want. There is a widespread belief that the role of
regulators to protect the ``character'' of food products, either as a
way of protecting industry or consumers, inhibits innovation and
competition, and has outlived its usefulness.
In recognizing how the changes in the processing industry have
affected this kind of regulation, FSIS has adopted new regulatory
approaches for some meat products. When it became apparent that some
consumers prefer the increased ``tenderness'' that is achieved in
products with relatively more water (such as ham), the Agency
promulgated regulations to permit more than the traditional industry
limits in these products as long as the added water is shown on the
label. This approach has allowed the Agency to reconcile the two
objectives of the moisture limit regulations in meat products. This
approach would be appropriate for poultry products and would avoid the
problem of determining what is ``deceptive'' under the dual objectives
of these regulations.
III. Options
1. Promulgate regulations for processed poultry products to
parallel those applying to the meat industry.
2. Promulgate regulations requiring any added water in meat and
poultry products to be shown on the product's label.
inspection process for canadian imports
Question. I asked the question about bringing me through the
process about Canadian meat coming into the United States. Could you
please review this entire process for me?
Answer. It is the job of FSIS to make sure that imported meat and
poultry is produced under equivalent conditions and meets our
standards.
Principles of Import Inspection
To ensure the safety of imported meat and poultry for American
consumers, FSIS maintains a complex, comprehensive system of import
controls. That system involves two major activities.
The first is oversight to ensure that exporting countries have
inspection controls equivalent to those of the U.S. This includes
carcass-by-carcass inspection, which is required of all countries
exporting to the U.S. Such countries must undergo a rigorous review
process before they can become eligible to export meat and poultry to
the U.S. Thereafter, they are reviewed annually by FSIS inspection
personnel to assure they maintain equivalent standards.
The second part of our import control process is reinspection on a
statistical basis, of meat and poultry products as they are presented
for entry to the U.S. Port-of-entry reinspection is a monitoring
program to make sure that the foreign country's inspection system is
working properly. All of these products have already been inspected by
the approved inspection system in the country of origin.
A country's overall inspection system must be equivalent to the
U.S. system. To determine equivalence to U.S. inspection controls, we
look at whether a country has the legal authority to impose
requirements equivalent to ours. FSIS examines the organizational
structure and staffing of the country's inspection program; and
conducts an on-site review of the country's inspection operations,
including facilities, equipment, laboratories, training, and individual
establishments. Equivalent inspection, sanitation, quality, species
verification, residue and microbiological standards must be codified in
laws and regulations, and must be operating on a daily basis.
In 1992, the U.S. conducted an exhaustive review of the Canadian
inspection system and documented its equivalency, noting, in fact, the
remarkable similarities between the two inspection systems. These
similarities provide added confidence in Canada's meat and poultry
inspection system.
Part two of the import inspection system, port-of-entry
reinspection, is a further monitoring of the effectiveness of the
foreign country's inspection system. As I previously mentioned, meat
products exported from Canada must first be inspected and passed by the
Canadian system. Meat products are reinspected on a statistical basis
at the U.S. port of entry by federal inspectors. Much of this product
is further processed in the U.S., and subject to additional U.S.
inspection in domestic plants. This includes products such as ground
beef and carcasses, which generally are not sold to consumers in that
form, but are made into other products in the U.S. under inspection.
Therefore, these types of imported products are subject to more
inspection than similar domestically produced products. First, it is
inspected in the country of origin under an inspection system that is
equivalent to that of the U.S. Next, a USDA import inspector at the
border reinspects it. Then, it is subject to U.S. inspection when it is
further processed. Finally, retail products are subject to checks in
commerce by FSIS compliance officers.
Inspection of Imported Meat from Canada
In January 1989, the U.S.-Canada Free Trade Agreement took effect,
calling for the removal of trade restraints between the two countries.
The agreement encouraged free commerce in meat and poultry, but there
were no specific provisions regarding inspection procedures.
Because of the similarities in our respective inspection systems,
Canada and the U.S. were committed to extending the same equivalency to
systems for reinspecting imported meat. Over the years, we have revised
some of the procedures for inspecting imports from Canada, and that
inspection process is explained below.
When a Canadian establishment is ready to ship product to the U.S.
the plant must file an entry form with FSIS. Until recently, this was
done through an Import Field office, but now the entry form is sent by
facsimile to an FSIS import inspector at an official import inspection
establishment. All of the import inspectors have computers, and the
inspector enters the shipment information into the Automated Import
Information System (AIIS), which allows us to track the shipment until
it enters the U.S., and is presented for import reinspection.
After the shipment has passed Canadian inspection and is certified
for export to the U.S., it is transported by truck to the border. All
Canadian meat shipments must stop at a FSIS border import inspection
station to receive an assignment. The truck may proceed inland to
complete the inspection, although almost all inspections occur at the
border. We have nine main locations along the Canadian border where
meat exports can enter.
When the truck arrives at the FSIS import inspection station, the
inspector goes to the computer and gets the specific reinspection
assignment for that shipment. Up to this point, no one in Canada or the
U.S. has any idea what type of reinspection will be assigned to the
shipment. There are three possible types of inspection assignments.
First is an ``inspect'' assignment. The computer system is
programmed to randomly select imported shipments for monitoring. The
truck will be unloaded at the border inspection facility, with the
exception of red meat carcasses, and the inspector checks the
documents, including the export certificate from the Canadian Food
Inspection Agency to verify labeling, and perform all applicable
reinspection tasks. Generally, for fresh product, such as carcasses and
meat cuts, reinspection includes a product examination in which the
inspector visually checks for defects and contamination. It may also
include taking a sample to send to the laboratory to check for species
identification and for residues such as drugs and pesticides. For
processed product, including ground beef, it may also include checking
net weight, condition of container, and laboratory analyses for
species, microbiological contamination and food chemistry. Some
products, such as ground meat, are subject to microbiological tests for
E. coli 0157:H7. These products have undergone inspection in the
Canadian system, which, like the U.S. system, continuously monitors
slaughter and processing, and conducts the same visual and laboratory
tests.
The criteria used to determine whether a shipment meets our
requirements and passes reinspection is the same for every country that
exports meat to the U.S., and it is the same standard enforced in U.S.
plants on domestically slaughtered and processed meat.
In doing the ``inspect'' reinspection assignment, the inspector
will randomly choose samples from throughout the shipment. Again,
procedures are different for carcasses, which will be explained later.
Inspectors are trained to retrieve random numbers from the computer, or
another source if the computer is not available. Consequently, every
container in the shipment has an equal chance of being selected for
reinspection.
The number of samples required for reinspection is in accordance
with statistical procedures. That is, they are sufficient to give us a
picture of the condition of the entire shipment. If the shipment passes
reinspection, the documents are stamped, and the truck moves inland.
Again, much of this product goes to domestic, federally inspected
plants for further processing, where it is subject to inspection for
the third time. If the product is going straight to the consumer, it
must state the country of origin on the label.
If the examination of the samples results in a rejection, the
entire shipment is rejected, and the entire shipment must leave the
U.S. The FSIS inspector enters these results in the computer, and the
next 15 shipments of this same type of product from the same plant,
equaling at least 15 times the weight of the rejected shipment, will be
inspected regardless of where it enters the U.S. This is more
restrictive for Canada than the other countries approved to export to
the U.S. For other countries, it is only 10 consecutive lots that must
pass reinspection. This is called ``intensified inspection'', and it is
the second type of inspection assignment that a shipment can get at the
border.
The third type of assignment that shipments are subject to is the
``skip'' assignment. This means that the AIIS system did not select
this shipment for hands-on reinspection. Overall, FSIS inspects about 1
out of every 9 or 10 Canadian shipments. However, even for a ``skip''
assignment, the inspector will have the doors of the truck opened and
will look at the containers at the back of the truck, check the general
condition of the product, ensure that the documents match the shipment,
and verify the labeling. If the inspector notices anything wrong, the
entire shipment may be unloaded and checked.
Questions have been raised about reinspection procedures for ground
beef, especially when it arrives in large containers. These shipments
are subjected to product examinations. The inspector randomly selects
samples, and visually examines the product. The AIIS may also assign
laboratory samples for species identification, chemical residues and E.
coli 0157:H7.
Over the years, the Agency has strengthened inspection of all
imported products significantly. However, there are areas we are
continuing to improve. For example, we have implemented a modified
approach for reinspecting Canadian red meat carcasses. This should
increase everyone's confidence that carcasses are undergoing proper
scrutiny. In the past, we have not required the unloading of the entire
shipment of carcasses at the border for selection of samples and
reinspection as we do for other imported products. However, the entire
load of carcasses has been later unloaded at the destination plant in
the U.S. and subject to domestic inspection at that point and during
further processing. This strategy was tied to basic food safety rules,
which tell us that the more a product is handled, the greater the
chance of contamination and temperature abuse, which increases human
health risks to consumers. Therefore, it was determined more prudent to
unload and reinspect the entire carcass shipment at its final
destination.
Under the modified program, the Canadian Food Inspection Agency's
meat inspectors were trained to select samples according to U.S.
requirements, mark those samples, and assure they are loaded at the
back of the truck. The truck is then sealed with a Canadian Food
Inspection Agency seal. When the truck reaches the border, and the load
is an ``inspect'' assignment, the FSIS inspector uses these randomly
selected samples. Knowing that some people may continue to be concerned
about having the Canadian inspectors select samples, in March FSIS sent
two separate teams to several Canadian plants exporting red meat
carcasses to the U.S., to evaluate the new procedures. No major
discrepancies were uncovered. The new program also includes a
verification check at the final destination. USDA inspectors located at
these USDA inspected plants look at the entire lot, randomly select
their own samples, and reinspect them. These results are compared with
the results received at the border, when FSIS import inspectors check
the samples selected by Canadian inspectors. These comparisons enable
us to determine if Canadian inspectors are correctly selecting samples.
inspection process for u.s. exports to canada
Question. In addition, could you describe step by step the means by
which United States meat is inspected as it goes into Canada?
Answer. For the record, I will provide the brochure, ``How to
Export Meat and Poultry Products from the United States to Canada'',
which outlines step by step the process by which meat products are
exported to Canada. Page 4 describes the Agriculture Agri-Food Canada
inspector's duties in examining the exported product.
[The information follows:]
[A Quick Reference Guide for the Industry]
How to Export Meat and Poultry Products From the United States to
Canada
i. introduction
This guide has been developed jointly by Agriculture and Agri-Food
Canada (AAFC) and the Food Safety and Inspection Service (FSIS) to
facilitate the movement of meat and poultry products across the Canada/
United States border. All exported shipments must be presented to an
AAFC inspector prior to entering commerce into Canada. Failure to
present export shipments for reinspection can result in penalties that
may interfere with your business. It is essential that all responsible
parties (exporter, importer, Customs broker and transportation company)
are aware of the procedures, including what documents are required, by
whom and where the inspection takes place.
The information that you will find here is an overview of the
export process. The information contained in this guide is subject to
change without prior notice. A list of phone numbers (addendum #1) and
examples of required documents are available at the back of this
reference guide. More detailed procedures can be obtained from AAFC and
FSIS headquarters, regional offices and import field offices.
ii. plant/product eligibility
All U.S. federally inspected meat and poultry establishments are
initially recognized as eligible to export to Canada, unless the
facility has been specifically delisted.
There may be restrictions on certain types of U.S.D.A. inspected
and passed meat and poultry products, which are listed in the Export
Requirements for Canada. The exporter is responsible for ensuring that
the products destined for export to Canada are produced, stored in, and
shipped from a USDA/FSIS inspected facility.
Exporters are advised to check the Eligibility Status of U.S. Meat
and Poultry Plants Exporting to Canada--Delistment List before
preparing product for export. The export requirements for Canada and
plant eligibility lists are available through the Export Requirement
Library database [To access the system by modem: phone: (202) 501-7608]
or by request from FSIS, Export Coordination Division (ECD).
iii. registration of product labels
All prepared meat and poultry products and retail package labels
must be registered in advance by AAFC. Product labels intended for
retail distribution must be bilingual (French and English.) The labels
must include the mandatory labelling features:
--product name,
--country of origin,
--net quantity in metric units,
--list of ingredients, if applicable,
--name and address of the manufacturer or distributor,
--U.S.D.A. official inspection legend,
--storage (handling) instructions, if applicable,
--grading for beef, if applicable and
--grading for poultry carcasses, if applicable.
In addition, these labels must be submitted to FSIS, Food Labelling
Division for U.S. label approval.
Applications should be made to AAFC on AGR 1419, Request for
Registration of Labels, Markings and Containers (addendum #2), with a
proof of the proposed label attached. For more information on labelling
requirements and application procedures, call (613) 952-8000, ext. 4685
or write: Agriculture and Agri-Food Canada, Food Inspection
Directorate, Process, Formula and Label Registration Unit, 59 Camelot
Drive, Nepean, Ontario, K1A 0Y9 CANADA.
Other shipping container labels on non-prepared products do not
need advanced registration by AAFC, but must include the mandatory
labelling features listed above. Agriculture and Agri-Food Canada
inspectors will check labels on both shipping containers and retail-
size packages.
iv. border entry procedures
A. Prior to shipping consignments of edible meat and poultry
products:
1. The U.S. exporter must send the following information by
facsimile to AAFC, Ottawa [fax number (613)991-3820)]:
--Facsimile cover sheet, Notification of Intent to Import Meat
Product Into Canada (addendum #3)
--FSIS form 9135-3 (Certificate for Export of Meat and Poultry
Products) and FSIS form 9135-3A (Continuation Sheet), if
applicable (addendum #4 and #5, respectively.)
IMPORTANT NOTICE: To avoid duplication of certificate numbers, FSIS
form 9135-3 will be numbered according to year. The current certificate
(US-CA-95) will be used until December 31, 1995. At that time, US-CA-96
will be available through the FSIS inspector at the establishment.
2. AAFC will review the documents for accuracy and completeness.
The accepted copy of FSIS form 9135-3 will be stamped ``preverified''
and returned to the company, along with a AAFC computer generated
``Document Report''. If the certificate is not accepted, the company
will be notified of the reason for refusal. Resubmission must be made
on a new FSIS form 9135-3.
B. Once the documents have been preverified, the shipment can
proceed to the border with the original FSIS form 9135-3 (and 9135-3A,
if applicable) that is signed by a U.S.D.A. veterinarian, the
``preverified'' copy of FSIS form 9135-3 (and 9135-3A, if applicable,)
the original poultry grading certificate (if applicable) (addendum #6.)
The company may forward a copy of the ``Document Report'' with the
shipment to expedite passage through the border crossing. In addition,
detailed instructions should be issued to the truck driver (addendum
#7.)
1. All U.S. meat and poultry shipments must stop at Canada Customs.
Trucks will then be referred to AAFC inspection at the border. The U.S.
company has the option of using the services of a Customs broker to
facilitate the paperwork requirements.
2. The shipment should cross the border within seven (7) work days
following preverification of the export certificate. It is the
exporter's responsibility to notify AAFC by facsimile if the shipment
is canceled or delayed.
C. The inspection assignment can be obtained in one or two ways:
1. At the Border
The AAFC inspector at the border will validate the shipment
documents and generate the inspection assignment from the import
control computer system and the import inspection report form (AGR
1422) (addendum #8.) Assignments will be for either a skip or full
inspection.
(a) Skip Lot.--Following a cursory examination from the rear of the
vehicle to observe the general condition of the shipment
(transportation damage, incompatible product, container labels, export
marks, etc.), the shipment can proceed to the final destination. A copy
of AGR 1422 and a copy of FSIS form 9135-3 and 9135-3A (if applicable)
will accompany the driver.
If the inspector observes a problem with the shipment, the
inspector will override the computer system assignment. Depending on
the problem, the shipment will either be refused entry or directed to
the designated import reinspection facility for full inspection.
(b) Full Inspection.--The shipment will proceed to the designated
import reinspection facility for full inspection. A copy of AGR 1422
and the original FSIS form 9135-3 and 9135-3A (if applicable) must
accompany the driver.
If the product passes reinspection, the shipment can proceed to the
final destination. If the product fails reinspection, product will be
refused entry.
______
Questions Submitted by Senator Bumpers
industry costs for haccp implementation in relation to user fees
Question. Now that HACCP is into the implementation stage, do you
have any verifiable information about the compliance costs to industry
and given those costs, especially for smaller firms, do you think it is
fair to also impose user fees on the industry at this time?
Answer. HACCP implementation will begin in fiscal year 1998,
however, pre-HACCP sanitation standard operating procedures, SOPS, were
implemented in all plants effective January 27, 1997.
FSIS has developed estimates of the cost for industry to comply
with a HACCP based system for the Final Regulatory Impact Assessment,
which is in the final rule. These estimates inferred a reduction in
implementation and operating costs for smaller establishments. I will
be glad to provide the information for the record.
[The information follows:]
[Clerk's note.--The information does not appear in the hearing
record but appears in the Federal Register, Vol. 61, No. 144, Thursday,
July 35, 1996, pp. 38858-38860.]
The user fee proposal is intended to assure that resources are
available now and in the future to provide the level of inspection
necessary to meet the demand for such services and maintain consumer
confidence, within the balanced Federal budget context.
effect of user fees on consumer confidence
Question. You mention the need to protect consumer confidence. Have
you made any analysis of public perception of the meat and poultry
industry paying for in-plant inspection? Do they perceive any conflict-
of-interest, real or imagined?
Answer. For over three-quarters of a century, USDA has had the
authority to charge user fees for overtime and holiday work. In fiscal
year 1998, we expect to collect nearly $90 million in user fees under
current law. It is important to note that there is strong confidence in
the inspection program and the safety of products, regardless of
whether the cost of inspection is covered by user fees or the
appropriation. Over the years, there has been no perceived weakness in
the inspection program associated with the existing user fees, and the
perception is public acceptance of product for which industry pays an
inspection user fee.
Question. In what manner might the implementation of user fees
affect consumer confidence?
Answer. The implementation of user fees should improve consumer
confidence in meat, poultry, and egg products. If industry takes
responsibility for the cost of inspection, the Administration could
then fully focus its efforts on developing and implementing necessary
inspection reforms which would improve consumer confidence in inspected
products.
______
Questions Submitted by Senator Leahy
Food Safety and Inspection Service:
(1) In recent years there have been several incidents of tainted
meat in the U.S. and abroad which have caused consumers to question the
safety of the meat supply. To address these concerns, the Holstein
Association, the dairy industry's largest breed registry, is in the
process of developing proposals for an inexpensive system to identify
and track livestock from the farm gate through processing and
distribution channels to the consumer. Such a system could integrate
vital herd, handling and human health information to allow rapid
intervention when needed to prevent distribution of meat tainted with
food borne pathogens.
Congress included report language in the fiscal year 1997
Agriculture Appropriations bill requesting that a National Farm
Identification Pilot Program for dairy cows be conducted jointly by the
Food Safety and Inspection Service (FSIS) and the Animal Plant Health
Inspection Service (APHIS). The program was to be funded out of the
FSIS account. It is my understanding that the FSIS has recently
announced that it will be soliciting proposals for this project under a
competitive bid process in the near future.
(A) Will that solicitation include a call for proposals for animal
identification programs?
Answer. On February 27, 1997, FSIS published in the Commerce
Business Daily a Request For Proposal for a series of pilot
demonstration, animal production food safety projects in the non-fed
beef, pork, poultry and sheep areas. The projects are intended to
demonstrate the application, feasibility and effectiveness of current
technologies for controlling contamination with particular emphasis on
pre-slaughter pathogen reduction. Animal identification will be a
required element of the non-fed beef project. An animal identification
element will be encouraged, but not required, in the pork and sheep
projects.
(B) In developing that solicitation, did FSIS take into
consideration Sec. 1434 of the Research title (7USC 3196) that outlines
factors the Secretary should consider in setting priorities for
allocating funds for pre-harvest, on farm food safety, or animal well-
being?
Answer. FSIS has only contracting authority, and is not covered by
the provisions under Sec. 1434 of the Research title (7 USC 3196).
(C) When does FSIS expect to select projects for funding under this
solicitation?
Answer. FSIS expects to complete selection of the projects in July
1997.
(D) Since the fiscal year 1997 appropriations language directs the
FSIS and APHIS to work cooperatively in developing an identification
pilot program and APHIS has expertise in this area, would FSIS be able
to transfer funds to APHIS to administer such a program, and would you
support such a transfer?
Answer. FSIS will administer the animal production food safety
pilot projects and will transfer funds to APHIS, as needed, if it is to
our mutual benefit in conducting these projects.
______
Agricultural Marketing Service
Questions Submitted by Senator Cochran
usda pesticide data program
Question. Last year, USDA information on the Pesticide Data Program
provided after the passage of the Food Quality Protection Act and the
Fiscal Year 1997 Agriculture Appropriations Act indicated that ``the
most direct impacts from the lack of funding for PDP will be an
insufficient amount of information to adequately meet the data
requirements for assessing the diets of infants and children and the
probable loss of important pesticide uses for minor crop producers due
to the shortage of data to accurately assess the actual dietary
exposure.'' What is the main purpose of the Pesticide Data Program--to
prevent the loss of important pesticide uses for minor crop producers,
to provide the EPA with data on residue levels, or to assess the actual
dietary risk posed by pesticides, particularly to children and infants?
Answer. In 1991 consumers and producers were alarmed by findings of
alar on apples, cyanide on imported grapes, and other food
contamination issues. The inability of the Department to respond
analytically to these concerns indicated the need to develop
comprehensive data bases regarding chemical use on agricultural crops,
subsequent residues in foods, and food consumption. In response to
consumer and producer concerns over pesticide residues in food, the
Department initiated a multi-agency effort in 1991 to collect data to
provide a more realistic assessment of pesticide levels in the food
supply and to reassure consumers.
The establishment of the Pesticide Data Program (PDP) within AMS
gave AMS a critical role in this initiative. PDP has created a
statically reliable data base on pesticide residues in food as close to
the consumer as possible. The National Agricultural Statistics Service
(NASS) was assigned the responsibility of conducting pesticide use
surveys. The Human Nutrition Information Service, now part of the
Agricultural Research Service (ARS), and the Economic Research Service
were assigned responsibilities for analyzing pesticide use and residue
data to determine the economic impact of alternative pesticide uses and
to estimate dietary exposure to residues.
As stated in our 1991 budget, the twofold goal for PDP is to
develop a comprehensive data base on pesticide residues to help ensure
the safety of the American food supply and to communicate this food
safety information to consumers in the U.S. and to our international
trading partners. In order to achieve this goal, we work closely with
Environmental Protection Agency (EPA), the Food and Drug Administration
(FDA), and the States to ensure that data collected meets multiple data
needs. Each user of this data contributes to the understanding of the
impact of pesticide residues in our food supply. By having access to
AMS pesticide residue data, EPA has been able to more accurately
determine exposure and dietary risk to the consumer, which facilitates
the approval of safer pesticides of interest to agriculture.
Information collected by AMS has assisted FDA by pinpointing areas
where closer surveillance may be required as a follow-up to apparent
violation identified by PDP. In addition, producers can assure
consumers of the actual levels of pesticide residues in their food.
Since the program's inception we have had to change some facets of
the program to respond to changing food safety concerns. For instance,
we expanded the types of commodities tested under PDP to include
processed products, dairy products, and grain to address pesticide
residue data needs outlined in the National Academy of Science report
on ``Pesticides in Diets of Infants and Children.'' With the passage of
the Food Quality Protection Act of 1996, PDP data will play a more
critical role in the Government's risk assessment process used to
evaluate pesticides in the re-registration of pesticides. This Act
directs the Secretary to improve collection of pesticide residue data,
especially those consumed by infants and children. As the program
continues, you can be assured that other changes will have to be made
to ensure that PDP responds more effectively to current food safety
issues and gives consumers and producers confidence that the food
supply is safe.
Question. Why should this be a USDA rather than an EPA Program?
Answer. USDA already has the staff, liaison, infrastructure, and
computerized database to effectively manage Program activities. EPA
authority requiring the use of contracts in lieu of cooperative
agreements restricts the purchase of new instrumentation, which in the
end will restrict PDP's ability to adapt new technology to meet the
challenges of the future.
As I stated earlier, PDP data meets a twofold goal of helping
ensure the safety of the American food supply and communicating that
food safety information to consumers and producers. This broad goal is
best achieved by AMS, since we are in a better position to identify the
data requirements of PDP's multiple users. Each of these users play a
critical role in ensuring the safety of the food supply. PDP data
coupled with food consumption data permits EPA to conduct more accurate
risk assessments. FDA utilizes PDP data to assist them in monitoring
compliance with their regulations. Furthermore, PDP data coupled with
NASS pesticide use data can lead to improved farm management practices,
such as implementation of integrated pest management practices. There
have been several commodities where crop rotation, drift, and other
technical issues will have to be studied to better understand PDP's
data--particularly when residues are detected in commodities on which
the pesticides are not registered for use. Also, PDP is being used by
the Foreign Agricultural Service and the State of California to support
the export of U.S. commodities in a competitive global market. AMS will
submit for the record a letter from the Administrator of the Foreign
Agricultural Service attesting to the use of PDP data to develop trade
relations with Pacific Rim countries and a letter describing how the
Department of Food and Agriculture in California has used PDP data.
Question. What have been the results of the Pesticide Program Data
since its creation in 1991?
Answer. PDP uses state-of-the-art equipment that can detect
residues in the parts per billion. We find detectable residues in 60 to
70 percent of the test samples. However, for many commodity/pesticide
combinations, the highest concentrations detected are a small fraction
of the currently established tolerances. Over the years, 1.5 to 4
percent of the samples tested contained violative residues; the vast
majority are for pesticides having no tolerance on that particular
commodity. These data help the Department dispel the notion that
pesticide residues are pervasive and at dangerous levels. It also helps
maintain food safety confidence to domestic and foreign consumers. I
will provide for the Committee copies of the Annual Data Summaries for
1991 through 1994. The 1995 Summary will be published in May 1997.
Dietary risk assessments and decisions for re-registration are
evaluated on an individual pesticide and commodity combination basis.
Over the past 5 years, data have been collected for about 1,000
pesticide/commodity combinations.
Question. Does the EPA use data other than that from the Pesticide
Data Program for its risk assessment process and for the re-
registration and review of pesticides? In other words, is the Pesticide
Data Program EPA's only source of this data?
Answer. PDP is not the only source of pesticide residue data used
by EPA. However, over the years EPA has become more reliant on PDP data
and today PDP is a critical data source for EPA's risk assessments
evaluations. For some pesticide/commodity combinations, PDP data is the
only information available to EPA. Data from sources other than PDP
include regulatory, enforcement-based programs. The shortcomings of
these regulatory programs for risk assessment purposes include:
sampling is usually not statistically reliable, laboratory analyses are
not performed at the low detection levels required by PDP protocols--
rather they focus on residue concentrations near the established
tolerances, sample preparation prior to analysis does not necessarily
emulate consumer practices, residue detections usually are not
confirmed, EPA's Good Laboratory Practices requirements for data
quality are not required, and evaluation of laboratory competence
through proficiency testing programs is limited. To our knowledge,
there are no other programs in the world that can produce data for
dietary risk assessment in the format provided by PDP that fulfills the
requirements of the Food Quality Protection Act of 1996.
Question. Which Food Quality Protection Act mandates are fulfilled
only by the continuation of the Pesticide Data Program?
Answer. Title III, Sec. 301 (c) of the Acts states: ``The Secretary
of Agriculture shall ensure that the residue data collection activities
conducted by the Department of Agriculture in cooperation with the
Environmental Protection Agency and the Department of Health and Human
Services, provide for the improved data collection of pesticide
residues, including guidelines for the use of comparable analytical and
standardized reporting methods, and the increased sampling of foods
most likely consumed by infants and children.'' PDP, as a result of
this provision of the Act, will have a more significant role in
providing data needed to evaluate cumulative exposures to pesticide
residues with a common toxicological effect and to create a
statistically reliable database on endocrine disruptors with the minute
detection levels needed to assess dietary risk. No other program in the
United States or other countries can generate data of the quality
provided by PDP to meet the stringent risk assessments required by the
Act.
Question. How many fruit and vegetable crops are being sampled
under this program?
Answer. I have attached a copy of a chronological list of 27
commodities which have been included in the Program since its
inception. The 11 fruit and vegetable commodities in the 1997 program
are as follows: (1) fresh commodities--pears, potatoes--aldicarb
testing only, spinach, sweet potatoes, tomatoes, and winter squash; (2)
processed commodities--apple and orange juice, canned and frozen green
beans, canned peaches, and frozen winter squash--alternating with fresh
winter squash. In total, there are 14 commodities in the 1997 program,
with no more than 13 being sampled at any time, if wheat, soybeans, and
milk are included.
Question. How many States are participating in the program? What is
the cost-sharing arrangement in each of these states? Please indicate
staffing, equipment, and other related program costs being supported
through federal versus state funding?
Answer. There are 10 States participating in the 1997 Pesticide
Data Program (PDP) for fiscal year 1997. All States received funding
for PDP operations through contracts issued by the Environmental
Protection Agency. There are no State cost-sharing funds. The
participating States and their proposed funding allocations are:
California--$2,430,000; Colorado--$85,000; Florida--$1,060,000;
Maryland--$75,000; Michigan--$1,090,000; New York--$1,730,000; Ohio--
$640,000; Texas--$1,020,000; Washington--$660,000; and Wisconsin--
$80,000. An additional $100,000 is still unobligated until the contract
cost proposals are finalized in April. There are no equipment costs for
the States under these contracts; however, the contracts are supporting
all state staffing costs.
Question. What arrangements have been made with the EPA for fiscal
year 1997 to continue USDA pesticide data collection activities?
Answer. On February 25, 1997, an Interagency agreement was signed
between the Agricultural Marketing Service (AMS) and EPA for
$1,251,000, to continue pesticide data collection activities. These
funds will be shared among the USDA agencies participating in the
Pesticide Data Program. AMS will receive $891,000; National
Agricultural Statistics Service--$90,000; Grain Inspection, Packers and
Stockyards Administration--$250,000; and the Agricultural Research
Service--$20,000.
federal state market news service
Question. For fiscal year 1998, increased funding of $1.1 million
was provided when the Committee became aware of the fact that the
agency was facing a massive withdrawal of state support for its
cooperative federal-state market news program. Would you please give us
an update on this situation, in terms of the number of states which
have cut or completely eliminated funding for their market news
programs and the impact this has had on your programs, on the
agricultural industry, and on related industrial sectors.
Answer. The States that reduced their market news programs include
Alabama, Kansas, Mississippi, Virginia, Texas, Kentucky, Wyoming, Iowa,
Illinois, and Florida. States where programs were eliminated included
California, New York, Washington, Ohio, Arizona, and Maine. To assume
the responsibilities of the major state participants, AMS had to add a
number of new reporters to its staff to ensure that the coverage of
these critical commodities continue. We also undertook a business
process reengineering effort that identified a number of initiatives
relating to automation, customer service and workplace improvement. AMS
also plans to create a Customer Service Center in Fresno, California.
The continued coverage of the critical markets by AMS benefits the
various industries, the consumer, and the states, as the market
information they need continues to be included in the nationwide
system. AMS has assumed coverage of these markets with the additional
funding received in fiscal year 1997. The broader responsibility
assumed by federal market news staff has ensured that important market
coverage continues and reports are being issued on time.
Question. Has the $1.1 million been sufficient to enable the
Federal program to fill critical gaps as state programs decline?
Answer. Yes, that amount has been sufficient to fill critical gaps.
Question. Are additional funds requested for fiscal year 1998 to
address this situation? If not, why?
Answer. No, the level funds received in the fiscal year 1997
appropriation will be sufficient for this purpose in fiscal year 1998.
market competition/concentration
Question. What activities are being funded with the $400,000
provided for fiscal year 1997 to carry out the recommendations of the
Agricultural Concentration Committee?
Answer. The following initiatives for fiscal year 1997 were funded:
1. AMS developed a National Carcass Premium and Discount Report to
provide the premiums and discounts paid for slaughter steers and
heifers. This report reflects premiums and discounts relative to
quality, cutability, and weight of carcasses that the packer is
offering for the current week.
2. The weekly Forward Contract Slaughter Cattle Summary Report,
developed by AMS, provides the volume of contract and formula priced
cattle committed to packers for delivery in a specified month. The
information is collected from cooperating feedlots in Texas, Oklahoma,
Kansas, Colorado, Nebraska, and Wyoming. Price levels based on the
Chicago Mercantile Exchange (CME) are included for cattle contracted on
the CME. Cattle feeders can evaluate demand based on the volume of
cattle committed to packers.
3. The AMS reporting of boxed beef is being expanded by including
data of boxed beef sale commitments covering the upcoming 15 business
days, rather than the upcoming 10 business days.
4. The Regional Beef Quality and Yield Report began in early
February. The reporting of beef grading results on a regional basis
will provide better geographic detail than the current national report
allows.
5. AMS is finalizing a daily report for import and export volume
data for livestock crossing the borders between the United States and
Canada and the United States and Mexico. The report is a cooperative
effort between AMS and the Animal and Plant Health Inspection Service.
6. AMS initiated a new report, ``The International Meat Review,''
in January 1997. The objective of this biweekly report is to briefly
illustrate the supply and demand factors which influence the export
trade of U.S. beef, pork, and lamb meat products, as well as the meat
imports from other countries.
7. Reporter positions, as well as support positions, have been
added in strategic marketing areas in South Dakota, North Dakota,
Nebraska, and Illinois to provide a broader coverage of market
information and a more in-depth look at marketing activity.
Question. Out of the additional $10 million released by the
Secretary from the Fund for Rural America for research, extension, and
education to counter concentration, food safety, nutrition, and
gleaning, what amount will be allocated to counter concentration and
what specific activities will be funded?
Answer. These funds are being managed by the Department's Research,
Education and Economics mission area. We understand that the
Department's Cooperative State Research, Education, and Extension
Service is currently accepting grant applications from colleges,
universities, laboratories, and research foundations. The $10 million
will be distributed among the four initiative areas--livestock
concentration, food safety, disease prevention, and gleaning.
Question. Increased funding is requested for fiscal year 1998 to
carry out the recommendations of the Advisory Committee on
Concentration: $500,000 for the Agricultural Marketing Service (AMS) to
expand its reporting of livestock and poultry markets; and $2.3 million
for the Grain Inspection, Packers, and Stockyards Administration
(GIPSA) to address packer competition and industry structure and
poultry compliance. Please summarize the need for these additional
funds and what activities will be carried out.
Answer. Producers need timely, accurate, and precise information to
successfully compete in today's global market. There is concern in the
industry about the lack of market information, especially for small and
medium-sized farm and ranch operations. Lack of transparency of the
markets is cited in the advisory committee's recommendations and fairer
competition for all participants is needed. To meet the needs of the
industry, AMS will need to expand and develop strategic areas of market
information and keep pace with changing technology and market
structures.
The following activities will be carried out with fiscal 1998
funding:
1. The Secretary's Advisory Committee cited the need for a value-
based matrix report to be developed for the cattle industry. This
report would provide the economic indicators to help guide producers in
supplying products that meet consumer demands. AMS will use the
increased funds to work with all industry segments to develop this
report.
2. Expansion of auction and direct market coverage of daily
trading, focusing on the shifts in marketing patterns, would provide
more market information for all market participants. Reporters would be
added in strategic locations throughout the major trading areas of the
country (Texas, Oklahoma, Kansas, Colorado, Iowa, Wyoming, and the
Pacific Northwest) to help provide the basic market coverage that is
needed.
3. Staff would be added and new communications technologies adapted
to provide for additional cross checking of reported market
transactions for cattle and hogs. Additional travel in expanding
contacts, especially from the production segment, would be implemented.
4. Expanded reporting of trimmed beef products on a daily and
weekly basis to provide greater coverage of beef marketing will be
implemented. The meat industry has moved to more processed product
marketing and away from commodity products.
5. AMS will continue to develop and implement import and export
volume data reports for livestock crossing the borders of the United
States and Canada and the United States and Mexico. These reports will
include information on volume of cattle, hogs, sheep, goats, and
horses, as well as destination for imports.
6. AMS will complete the development of marketing information
reports for import of meat items. These reports will include
information for beef, lamb, and pork.
7. AMS will strengthen and expand reports to reflect formula and
contract specifications for cattle.
8. AMS will expand producer-generated direct hog reports to provide
vital cross checks in the marketing of hogs. The recent changes that
have occurred in the marketing of hogs, primarily of marketing on a
carcass value-based concept, has necessitated the need for more
producer input of data relative to marketing specifics.
9. Pork reports would be revised to more fully reflect further
processed product rather than commodity product, and to provide greater
coverage of pork trading. Additional reports would be developed to
reflect cutout data for further processed product and provide the
industry with a more accurate reflection of product value.
10. The American Sheep Industry (ASI) is discontinuing publication
of their marketing bulletin. This publication included several AMS
market news sheep and lamb reports. AMS will develop a weekly
publication that will meet the needs of the sheep and lamb industry.
Question. Please provide for the record, by fiscal year, the funds
provided for fiscal year 1997 and proposed for fiscal year 1998 to
carry out each of the recommendations of the Committee on Concentration
and/or to address agricultural market concentration of livestock
pricing. What additional funding will be required in future fiscal
years to carry out the Committee's recommendations?
Answer.
Fiscal Year 1997 Funding for Concentration/Livestock Pricing Issues
[Total Funding $400,000]
National Carcass Premium and Discount Report.................. $25,000
Forward Contract Slaughter Cattle Summary Report.............. 40,000
Expansion of boxed beef reporting............................. 10,000
Regional Beef Quality and Yield Report........................ 10,000
Import and Export volume data reports......................... 20,000
International Meat Review development......................... 20,000
Reporter and support staff expansion.......................... 275,000
--------------------------------------------------------------
____________________________________________________
Total................................................... 400,000
Fiscal Year 1998 Funding for Concentration/Livestock Pricing Issues
[Total Funding $500,000]
Slaughter Cattle Matrix Report................................ $50,000
Expansion of Auction & Direct Market Coverage................. 100,000
Addition of staff and support to expand cross checking of
reported market transactions.............................. 200,000
Expanded reporting of trimmed beef products................... 20,000
Final development of import and export reports for livestock
border crossings.......................................... 5,000
Final implementation of meat import reports................... 5,000
Reports to reflect formula and contract specifications for
cattle transactions....................................... 50,000
Expansion of producer-generated direct hog reports............ 50,000
Reports to reflect further processed pork product trading..... 10,000
Development of lamb and wool reports to help replace loss of
ASI information........................................... 10,000
--------------------------------------------------------------
____________________________________________________
Total................................................... 500,000
The only additional funding that will be required to carry out the
Committee's recommendations is for maintenance purposes and any
additional request for services to resolve concentration and price
discovery issues.
fish and fish product inspection
Question. The Fiscal Year 1997 Agriculture Appropriations Act made
permanent a provision that domestic fish and fish products produced in
compliance with food safety standards accepted by the Food and Drug
Administration be deemed to have met any inspection requirements of
USDA or other Federal agencies for any Federal commodity purchase
program. The USDA opposed this provision. Why?
Answer. USDA opposed the initial legislation because it restricted
our ability as purchasing agents to ensure the quality of foods
purchased by USDA. We rely on regulatory agencies such as Food and Drug
Administration and USDA Food Safety and Inspection Service to ensure
the safety of products distributed in food assistance programs. When
products are purchased by competitive bid, a determination must be made
as to whether a product meets minimum quality requirements described in
the contract specifications; such as grade or quality characteristics,
fat content, domestic product, and so forth. The initial legislation
was subsequently changed to allow end item lot inspection to establish
a reasonable degree of certainty that fish and fish products purchased
meet all quality requirements. USDA modified existing purchasing
specifications to implement the end item lot inspection.
organic certification program
Question. The fiscal year 1998 budget proposes an increase of
$505,000 to continue implementation of the Organic Certification
Program. How much is being allocated to the Organic Certification
Program for fiscal year 1997?
Answer. AMS is allocating $490,000 from its Marketing Services
account for the Organic Certification Program in fiscal year 1997.
Question. Why has there been a delay in publishing the final rule
for the Organic Certification Program? Last year, you reported to this
Committee that you expected the rule to be published in 1996. Now you
indicate that it will be published in late 1997.
Answer. Implementing the National Organic Certification Program has
proven to be far more complex and time consuming than had been
anticipated. USDA first received an appropriation for the program in
fiscal year 1994 and only then was able to establish a staff to develop
the proposed rule and work with the National Organic Standards Board,
or NOSB. The NOSB provided the Secretary with program recommendations
and reviewed materials to be included in the proposed rule as the
national list of allowable materials. At its September 1996 meeting,
the NOSB completed its review of the list of materials proposed for
inclusion in the organic rule. We anticipate that the proposed rule for
national standards for organic products will be published during the
late spring of this year.
Question. The prepared testimony indicates that consistent with the
National Organic Standards Act, the Department will seek to recover the
cost of the program through user fees that will be deposited into the
Treasury. With respect to this user fee proposal, why would these fees
be deposited into the Treasury rather than being credited to the
appropriations account so that the fee collections would be available
to cover the costs of the program?
Answer. The Department's Office of General Counsel has concluded
there is insufficient statutory authority to credit fees collected to
the appropriations account. Legislation would be required for AMS to
retain user fees.
______
Questions Submitted by Senator Bumpers
organic standards
Question. We still hear a lot of criticism from farmers due to the
delay in implementing Organic Standards as required by law. Can you
give us your best estimate on the amount of economic value that has
been lost to the organic industry due to the failure to implement
standards by the statutory deadline?
Answer. Our early economic analysis determined that the organic
industry has grown by 22 percent each of the last six years. We
estimate that the implementation of national organic standards will
allow the industry to continue grow as fast, or faster, for several
more years. Interestingly, the process of developing National Organic
Standards Board recommendations and writing the proposed rule seems to
have had an energizing effect on the organic industry. The twelve
Standards Board meetings and the four USDA livestock hearings have
provided a public forum for producers, processors and certifying agents
to come together to share ideas about solutions to common problems and
to arrive at a mutual understanding about organic standards. These
dialogues alone have created a greater cohesion and identification of
common concerns within the organic industry.
pesticide data program (pdp)
Question. Last year we faced a problem in conference in which the
House insisted this program should be funded through EPA rather than
USDA.
What problems did this cause for the implementation of the program?
Answer. Cooperation between AMS and EPA has been excellent.
However, with two agencies involved in providing direction to the
States, extraordinary efforts have been made to assure that the
communication process works. Although PDP operations were restarted
within a week after the issuance of EPA letter contracts to the States
on November 26, 1996, all is not ideal. The 3-month hiatus from
September through November 1996 resulted in data shortages affecting
calculations of national residue estimates for calendar year 1996.
Presently, the Program is operating under staffing shortages within
USDA because of the fiscal year 1997 funding delays posed by the
Congressionally mandated shift of funds from USDA to EPA. In addition,
uncertainty as to whether EPA would be allowed by Congress to transfer
funds to USDA to pay for in-house operations caused some staff re-
allocations, transfers and disruptions within USDA, early in the year.
Although restaffing efforts are underway, USDA is proceeding cautiously
until continued program funding for fiscal year 1998 is obtained. Some
States also lost staff for these same reasons.
The current staff, with full support from EPA staff, has made
extraordinary efforts to maintain the monthly sampling plans for 1997,
prepare the 1995 Calendar Year Data Summary for publication in June
1997, and conduct an Executive Steering Committee and Federal/State
planning meetings in February 1997. Also, two new States were fully
integrated into PDP's sampling system: Wisconsin began sampling all
commodities and Maryland (which replaced North Carolina) entered the
Program representing the mid-Atlantic region.
There have been program delivery impediments which we would like to
share with you. Due to EPA statutory limitations, it was necessary to
use contracts to fund the States in this program. Using EPA contract
authority instead of AMS' cooperative agreements provided a very rigid
operating structure. In the past, AMS' cooperative agreements were
issued early in the fiscal year and provided greater flexibility to
address changing priorities for sampling and testing by allowing us to
reallocate program resources later in the fiscal year. EPA contracts
have not been finalized to date, thus providing only 50 percent of the
funds under a letter contract, pending finalization of these contracts.
The States are continuing to conduct full-scale efforts. Finalization
of the contracts is anticipated in June. Also, under EPA contracts,
there is no authority to purchase or replace laboratory
instrumentation, which is necessary to adopt more efficient
technologies for use in PDP.
Question. Has USDA reached an agreement with EPA on funding for PDP
for fiscal year 1997?
Answer. On February 25, 1997, an interagency agreement was signed
between the AMS and EPA for $1,251,000 to continue pesticide data
collection activities. These funds will be shared among the USDA
agencies participating in PDP. AMS will receive $891,000; National
Agricultural Statistics Service, $90,000; Grain Inspection, Packers and
Stockyards Administration, $250,000; and Agricultural Research Service,
$20,000.
Question. How does EPA use the information gathered by PDP?
Answer. PDP data is a primary source of information for EPA's
reregistration and special review of pesticides in their dietary risk
assessment process. PDP is also essential in the implementation of the
Food Quality Protection Act of 1996, which includes provisions
emphasizing children's health in pesticide tolerance setting. PDP data
for pesticide residues in foods highly consumed by infants and children
will be used to assess dietary risk based on the new risk assessment
standards stated in the Act. There have been 15 reregistration
activities using PDP's data: benomyl, captan, chlorothalonil,
chlorpropham, DCPA, dicofol, ethion, fenamiphos, iprodione, mevinphos,
quintozene, permethrin, propargite, thiabendazole, and trifluralin.
PDP's data were also used in four special reviews: 2,4-D, diazinon,
disulfoton, and methyl parathion; and in a pilot study concerning
aldicarb in potatoes. In addition to these uses, AMS routinely supplies
EPA with PDP data on a case-by-case basis.
Question. How does USDA use this information?
Answer. USDA's Foreign Agricultural Service (FAS) uses PDP data to
resolve potential trade issues and to provide an advantage to American
products over those of our competitors in an expanding global market,
especially the Pacific Rim countries. Attached is a letter signed by
the FAS Administrator explaining the importance of PDP in fulfilling a
critical USDA mission. Similar use of PDP's data has been made by
Departments of Agriculture in the participating States, such as
California, as well as to address issues of concern within a State,
such as Michigan did to allay fears of possible chlordane contamination
of milk.
PDP residue data are becoming an important tool in characterizing
Good Agricultural Practices issues which will impact USDA's integrated
pest management activities--particularly with regard to minor crops
such as fruits and vegetables. Some of the issues for commodities
involve pesticide residues resulting from crop rotation, spray drift,
and detection of residues in crops for which there is no registered use
for a pesticide. AMS and other USDA agencies are studying these issues
and their importance in marketing U.S. commodities.
PDP data are used by the Economic Research Service (ERS) to assess
economic and production practices related to pest management, the
Nation's food supply, and consumers. ERS also used PDP data to assess
economic implications of alternative pest control practices.
______
Question Submitted by Senator Leahy
organic certification program
Question. I authored the Organic Food Production Act which was
included in the 1990 Farm Bill. The Act was a comprehensive piece of
legislation aimed at establishing National Organic Standards for
labeling organic and setting up a National Accreditation Program to
certify organic producers and handlers. In 1992, the Secretary of
Agriculture appointed the National Organic Standards Board to develop
information and provide guidance to USDA in developing draft organic
rules. The Board sent its recommendation to USDA almost two years ago,
but we are still awaiting the final release of the draft rules. Does
the Department plan to finalize the draft organic rules soon and send
them to OMB for final clearance? If so, is there a specific time frame
or date when this will happen?
Answer. We anticipate that the proposed rule for national standards
for organic products will be published during the late spring of this
year.
______
Animal and Plant Health Inspection Service
Questions Submitted by Senator Cochran
aphis salaries and expenses
Question. The budget proposes APHIS staffing reductions affecting
certain areas as part of the Administration's personnel streamlining
effort.
Please provide the staff year reductions this budget proposes,
where these reductions will occur (in Washington or at the state level)
and what impact these reductions will have on the following APHIS
activities:
--Pest and Disease Exclusion Activities
--Plant and Animal Health Monitoring Activities
--Pest and Disease Management Activities
--Animal Care Activities
--Scientific and Technical Services Activities
--Veterinary Diagnostics Program
Answer. The President's budget includes a reduction of $5,480,000
and 349 staff years for APHIS. APHIS will attempt to minimize the staff
year reduction impact in the field. Some staff years may be eliminated
through attrition in anticipation of the consolidation of APHIS'
regional offices. The following table shows the fiscal and staff year
impact of these reductions by the activities you have indicated:
Staff year
Activity reduction
Pest and disease exclusion........................................ -91
Plant and animal health monitoring................................ -14
Pest and disease management....................................... -185
Animal care....................................................... -5
Scientific and technical services \1\............................. -39
Others............................................................ -15
-----------------------------------------------------------------
________________________________________________
Total....................................................... -349
\1\ Includes a reduction of 9 staff years attributed to the veterinary
diagnostics program.
---------------------------------------------------------------------------
agricultural quarantine inspection personnel
Question. The budget request increases the agricultural quarantine
inspection user fees program (AQI) by $2.8 million from the fiscal year
1997 level of $98 million. How many additional inspectors were hired in
fiscal year 1996 and how many do you anticipate hiring in fiscal year
1997? Will this increase provide the sufficient number of inspectors
needed? How many do you anticipate are needed for fiscal year 1998?
Answer. In fiscal year 1996, 201 inspectors were hired late in the
fiscal year. We anticipate hiring 42 additional inspectors in fiscal
year 1997. These hires along with normal attrition will allow us to
increase estimated staff years in 1997 to 2,140.
These hiring, however, will provide the sufficient number of
inspectors only for the immediate future. For example, a major new
international terminal will open at JFK International Airport in May or
June 1998, for which at least 15 additional AQI officers will be
required.
Based on optimum staffing models, we predict that 82 additional
inspectors will be needed in fiscal year 1998. While the staff years
assigned to the AQI user fee program are being reduced in fiscal year
1998, the actual number in inspectors will increase. This is because of
the streamlining efforts that will reduce administrative positions in
the field and at headquarters that are also assigned to the AQI user
fee program. In addition, we plan to reprioritize certain activities,
realign shift coverages, and evaluate commodity risks to shift some
existing resources to cover emerging needs.
Question. An increase of $1.2 million is requested for the
appropriated AQI program. The program was funded at a level of $26.5
million in fiscal year 1997. How many staff years will be devoted to
conduct predeparture inspections in Hawaii and preclearance inspections
in Canada and Mexico?
Answer.
------------------------------------------------------------------------
Fiscal year--
Location -------------------------
1997 1998
------------------------------------------------------------------------
Hawaii........................................ 138.6 158.6
Canada........................................ 4.1 5.1
Mexico........................................ 27 27
------------------------------------------------------------------------
Question. This Subcommittee provided an additional $700,000 to
support the addition of 21 full-time inspection positions to supplement
the resources for agriculture quarantine inspection at Hawaii's direct
departure and interline airports. Was this directive fulfilled?
Answer. The conference reduced the increase to $500,000. This
amount supports 14 positions, which we have filled.
Question. What activities has the Department engaged in to test and
evaluate new inspection technologies and other methods and hiring
arrangements for conducting preclearance and arriving baggage
inspections? Why hasn't the study requested by the Committee been
delivered?
Answer. APHIS has made many improvements to enhance our inspection
capabilities and achieve significant savings.
We have X-ray machines in place at major international airports and
X-ray scanning machines at all foreign-arrival and predeparture sites
and continue to expand their use as a screening tool. In recent months,
we have reviewed new, highly sophisticated X-ray technology to enhance
detection by allowing baggage to be viewed from several different
angles rather than the one provided by current machines. We will
evaluate new technology for cost effectiveness.
We are introducing the use of pest risk assessment to better
concentrate our resources on high-risk activities. At the same time, we
have increased the number of computers available for data collection.
The data are essential for risk assessments and performance
measurements.
We have developed computerized staffing guidelines based on the
type and level of inspection performed. We are testing these guidelines
now. While we anticipate that some fine tuning may be necessary, we
believe these guidelines will ultimately help us to realize some
significant cost savings while maintaining the desired level of
coverage and agricultural protection.
The Federal Aviation Administration and APHIS are researching an
automated baggage inspection system. The system is undergoing extensive
tests and has yielded promising results, particularly in the area of
tomographic imaging. In a recent test, the analysis software
consistently identified objects imbedded in a Styrofoam cylinder. We
have contracted for the advancement of analysis algorithms; the
development of a unique radio frequency tag and an applicator for
attaching the tag to bags; and a method to decrease the requirements
for the tomographic reconstruction hardware. We anticipate completion
of the prototype sometime during fiscal year 1998 and will test the
system in Puerto Rico.
We have revised our organizational structure to establish a 10 to
one employee to supervisor ratio. This will result in significant
savings not only in Hawaii, but nationwide. In addition, we are
examining policies overtime to ensure that APHIS maximizes human and
fiscal resources. We have hired technicians and temporary personnel
rather than higher graded officers to save costs. Using wide scale
video conferencing saves costs and increases training opportunities for
our personnel.
The study, requested by the Committee, will be delivered during the
week of March 24. We apologize for the delay.
Question. Which new and expanded facilities will you provide with
inspection officers? What additional resources will be required in
future years to fully staff these and existing facilities?
Answer.
[Dollars in thousands]
------------------------------------------------------------------------
Location Staff-years Funding \1\
------------------------------------------------------------------------
New Facilities:
Brownsville, TX (Los Tomates Bridge)...... 4 $312
Eagle Pass, TX (Eagle Pass 2 Bridge)...... 3 129
Tecate, CA................................ 2 145
Andrade, CA............................... 1 98
Lukeville, AZ............................. 1 98
Expanded Facilities:
Santa Teresa, NM (El Paso Work unit)...... 1 29
Bismarck, ND (Pembina Station and Portal
Station)................................. 1 29
Blaine, WA................................ 1 106
Existing Facilities:
Brownsville, TX........................... 1 29
El Paso, TX............................... 3 110
Pharr, TX................................. 1.5 43
Laredo, TX................................ 6 208
------------------------------------------------------------------------
\1\ Includes salary, benefits, and non-salary costs.
Question. The budget says the Agency will strive to increase the
number of facilities covered, peak periods, extended hours of coverage,
and increases in the number of passengers. What is the Agency's goal
for each of these areas?
Answer. APHIS' goal is to cover all foreign passenger traffic
facilities as effectively and efficiently as possible during peak
periods, and extended hours within available resources. We will
evaluate peak period traffic in conjunction with risk assessment survey
data to determine the best utilization of staff resources. Hours of
coverage will be expanded only if traffic volume and associated risk
rises beyond that experienced during existing hours of coverage. APHIS
will deal with increases in passenger traffic by conducting additional
inspections and improving our targeting efficiency ration (a measure of
officers' effectiveness selecting the highest-risk travelers and
intercepting prohibited materials, pests, and diseases).
sterile screwworm fly production facility
Question. Is the facility in Panama, which the Agency plans to use
for the production of sterile screwworm flies, a new building which
will be constructed or a building needing renovation?
Answer. The production facility in Panama will be a new one,
designed and built on a site made available by the Government of
Panama. A sugar mill previously occupied the site. A warehouse
building, used by the sugar mill, is still in good condition and was
incorporated into an existing master plan to store supplies and
materials. Other buildings on the site will be razed.
Question. Your budget states that $6 million from prior balances
will be used for the architectural and engineering work and an
environmental study for this facility. From which balances will this
money come and why did these balances accrue?
Answer. Recent Appropriations Acts have granted APHIS authority to
carry over up to 10 percent of the annual screwworm appropriation, to
remain available until expended. At the beginning of fiscal year 1997,
APHIS had $3.7 million available from prior years in the screwworm
program. These funds were accumulated gradually from program savings
over the past three years. For example, at one point sterile fly
production at the existing facility in Mexico could not keep up with
planned dispersal objectives for technical reasons. As a result,
dispersal and shipping costs were lower. In fiscal year 1995, the
program achieved savings from devaluation of the Mexican peso. Further,
in fiscal year 1996, the program planned to erect a chilled fly center
and establish a surveillance program in Panama. These activities were
delayed, so funds were carried forward to fiscal year 1997, and are
expected to carry forward into fiscal year 1998.
Question. What are the future year costs of this facility?
Answer. We expect annual lease costs of about $14 million for 12
years.
Question. What other affected nations will be contributing to the
architectural and engineering work and the future costs of the
facility? What costs will the United States and each of the nations
involved contribute?
Answer. The entire project will be funded jointly by the United
States and Panama through a joint Panama-US Screwworm Commission.
Panama will be contributing approximately $800,000 to the
architectural and engineering work and is expected to contribute 10
percent of the construction and operating costs of the facility. The
United States will contribute the balance of the architectural and
engineering work, estimated to be $5 million and 90 percent of the
construction and operating costs of the facility. Panama also
contributed the land and $11 million of infrastructure costs for the
facility and screwworm eradication.
If other countries, or groups of countries, in the region detect
screwworms at levels that pose a risk to domestic and export markets,
they may be able to purchase flies from the Panama facility at levels
sufficient to conduct control programs. If this should occur, the
Panama-U.S. Commission will take steps to ensure sufficient supplies
for the primary objective of barrier maintenance at the Darien Gap.
Through collaboration among the Panama-U.S. Commission and nearby
countries, the integrity of the barrier can be maintained.
karnal bunt
The President's request for the pest detection program is an
increase of $4.5 million over the fiscal year 1997 appropriated level
of $4.2 million. It also states that the increase would primarily go to
the Karnal bunt (KB) program.
Question. I understand that $500,000 will be used to fund
cooperative agreements to examine eradication strategies for Karnal
bunt and other probable infestations. Of the other $4 million
requested, how much of this money will be spent on Karnal bunt? What
activities will be funded with this money?
Answer. We expect to spend most of the $4 million on Karnal Bunt
(KB). This program increase supports enhanced domestic pest and disease
surveys, expanded pest information data bases that will be shared with
the States and industry, and the ability to scientifically verify
disease and pest free areas or zones.
The primary focus will be for pest detection surveys to enable
APHIS to ensure that the $10 billion international wheat market remains
open. Accurate survey data provides assurance to trading partners that
KB is not present in U.S. wheat producing areas. Survey technology
developed through pest detection initiatives allows the wheat seed
industry to fully adopt preventive practices for keeping the U.S. wheat
crop KB free. The increase will support follow up surveys in the
previously infected areas and any continuing regulatory activity
required.
These same program components, including enhanced domestic program
infrastructure, quick and continuous detection survey capability and
technology transfer to the States and industry will easily incorporate
other agricultural trade significant to pests and diseases. Pest
detection will provide the much needed scientific backbone required for
expanding U.S. agriculture exports.
Question. If the total $4.5 million will not be used entirely on
Karnal bunt, then what other activities will it be spent on?
Answer. The KB experience shows that we must strengthen our
domestic infrastructure to detect and quickly react to plant pests and
diseases. $500,000 of the increase will be used to investigate
alternative control and eradication strategies for KB and other
potential infestations.
Question. Which countries have not accepted the U.S.'s exported
wheat from regulated areas even though they test negative for Karnal
bunt?
Answer. Approximately 60 countries have not accepted U.S. wheat
from regulated areas, even if grain from these areas has tested
negative for KB. But of these countries, only Peru and Venezuela have
been asked to accept negative-tested wheat from regulated areas.
Question. If one suspect spore is found in a state, has that
state's wheat been refused for export until it tests negative?
Answer. We have yet to experience such a case.
regionalization
Question. The testimony indicates that APHIS has proposed a rule
setting up the Regionalization framework. What is this?
Answer. APHIS published a proposed rule on April 18, 1996,
establishing new criteria for allowing or excluding importations of
animals and animal products based on Regionalization of animal diseases
and scientific risk assessments. The proposed criteria for animal
disease Regionalization establish requirements for importing ruminants
and swine, and products of ruminants and swine, from foreign
``regions'' based on levels of risk. Under the proposed rule, a
``region'' can be a country, part of a country, or a group of countries
combined into a single trading block. The proposed requirements would
replace current import regulations that are based on APHIS declaring
individual countries free of specific diseases. The establishment of
risk-based regional import requirements is consistent with our
obligations under the North American Free Trade Agreement and the
General Agreement on Tariffs and Trade.
karnal bunt
Question. Would this process be used for Karnal bunt?
Answer. We have convinced many other countries to essentially take
a Regionalization approach to our wheat exports. Our National Survey
enables us to identify where KB is present and to provide assurance to
all trade partners that KB is not present in major wheat-producing
areas of the United States.
Question. How will the Southeast be treated under this framework?
Answer. The Southeast will be treated the same as any other region
with no bunted kernels. On March 17, 1997, we announced that we were no
longer considering taking further regulatory action in the Southeast.
We made this decision because no bunted kernels had been found in any
samples in that region. We will soon publish a standard for determining
the presence of KB that will apply to all parts of the country.
Establishing this standard will ensure that all U.S. wheat producers
and handlers are treated equitably regarding KB and that U.S. wheat has
the necessary certification to remain competitive in global markets.
These actions were consistent with USDA's objective to protect the U.S.
wheat industry while limiting restrictions to areas where KB disease
occurs.
Question. Is the Department promulgating rules for compensation for
1996 and 1997 for Karnal bunt in Arizona? If so, when?
Answer. Yes. We are promulgating several rules for compensation for
1996 and 1997 for KB in Arizona. We have drafted the final rule of the
1995-96 crop season compensation docket. This rule would extend
compensation eligibility to handlers of wheat that tests negative for
KB and participants in the National Survey who have positive finds.
We expect the final rule of the 1995-96 crop season compensation
docket to be published by mid-April. Also, we expect the proposed rules
for the 1996-97 crop season compensation docket and the 1995-96 seed
and straw compensation to be published by early May. It is our
intention to publish the proposed rules with a 15-day comment period.
We anticipate that the final rules would be published in late May.
Question. What types of research on Karnal bunt is USDA involved
in? Please list by agency all research that affects Karnal bunt.
Answer. Although APHIS does not conduct research, the Agriculture
Research Service (ARS) is spending an estimated $370,000 in fiscal year
1997 for KB research at Ft. Detrick in Frederick, Maryland. This
research, which is being conducted under strict quarantine conditions,
involves pathogenicity tests which are designed to distinguish between
KB and the ryegrass smut. ARS also hopes to determine if ryegrass
spores are capable of infecting wheat and causing KB. Additional
greenhouse testing is planned to determine if various cultivated and
wild grasses are susceptible to KB and to the smut found on ryegrass.
The Economic Research Service is conducting economic analyses at the
request of the Office of the Chief Economist. These analyses consist of
an evaluation of the price and trade impacts for U.S. wheat of KB and
an evaluation of the economic losses associated with KB for the wheat
seed industry. In fiscal year 1998, APHIS will provide ARS with
$500,000 for the review of USDA's phytosanitary policy. Specifically,
ARS will analyze the potential for pest outbreaks in the U.S. during
the next 5 years, the impacts and risks associated with control
measures other than total eradication, and whether total reliance on
phytosanitary control is a reasonable long term policy.
Question. Is there a test which can differentiate between Karnal
bunt spores and other spores?
Answer. There is a test which can differentiate between KB and all
other smuts except ryegrass smut. A smut disease of ryegrass has spores
similar in size and morphology to KB. Current DNA testing does not
distinguish between the two diseases. This discovery has complicated
identification of KB, particularly in areas such as the Southeast,
where it is common to plant wheat in combination with various forage
grasses, including ryegrass. ARS is conducting pathogenicity tests to
distinguish between KB and the ryegrass smut. We expect these tests to
be completed by April.
Question. APHIS has stated that the quarantine imposed on Arizona
due to the discovery of Karnal bunt in March 1996 was mishandled and
was an over-reaction. Since the European Community has less restrictive
requirements for phytosanitary certificates, can Arizona assume that
APHIS will relax its requirements similar to that of our foreign
trading partner's requirements?
Answer. APHIS has never made that statement. Furthermore, the U.S.
wheat industry has stated that USDA actions were entirely appropriate
and consistent with the urgency of the problem. Now that a year has
passed since the original detection in Arizona, we are discussing with
our State counterparts and affected industries the need to shift our
attention on KB from a quarantine perspective to a grain quality issue.
This shift would signify our belief that KB does not cause significant
yield loss. We are currently moving in this direction by proposing to
ease restrictions based on new information about the distribution and
risk of spread of KB. This would include relaxing our requirements on
Arizona for wheat export. Under this proposal, which is currently being
reviewed by the Office of Management and Budget, we would establish
regulated boundaries based on the presence of bunted kernels and take
regulatory action on grain movement based on the presence of
teliospores. The European Union will accept U.S. wheat if no KB
symptoms have been observed at the field and if samples taken before
shipment are found to be free of KB.
animal damage control
The President's fiscal year 1998 request is $23.7 million for the
animal damage control operations activities, a decrease of $3.25
million from the fiscal year 1997 level of $26.9 million.
Question. What activities including the States/cooperators will be
affected by this decrease?
Answer. Technical assistance and control work to prevent and reduce
damage caused by wildlife, primarily to agricultural and natural
resources, would be reduced. The States most greatly affected by the
reduction unless there were increased cooperator funding would be
Arkansas, Connecticut, Delaware, Iowa, Minnesota, Pennsylvania, and
Rhode Island, which provide little or no cooperator funding. Animal
damage control staffing would be reduced by 72. Wolf control work in
Minnesota would cease unless cooperator funding were forthcoming.
Additional impacts to affected States in the Eastern region include
likely reductions in the following activities: protection of crops from
blackbirds, and problems related to nuisance gulls, Canada goose, and
vultures; livestock protection and general technical assistance for
nuisance wildlife; assistance with deer problems to property, beaver
control activities, and reduced support of the technical assistance
hotline for rabies in Vermont.
In the Western region, impacts to affected States would likely
include reduced: aerial predator control; training at airports relating
to wildlife air strike hazards; and activities to protect threatened
and endangered species.
Question. Please provide a list of the states that will be affected
by the policy change that all states must provide 50 percent of the
cost of all programs beginning in fiscal year 1998.
Answer. The following is a list of States in which Federal animal
damage control contributions exceeded cooperator contributions in
fiscal year 1996. Because contributed amounts can vary somewhat each
year, this list is subject to change as new data for fiscal year 1997
becomes available.
------------------------------------------------------------------------
Fiscal year 1996--
State -------------------------------
Appropriated Cooperative
------------------------------------------------------------------------
Alabama................................. $159,900 $31,963
Arizona................................. 448,799 265,791
Arkansas................................ 258,890 ..............
Colorado................................ 790,480 240,854
Connecticut............................. 9,370 ..............
Delaware................................ 10,580 ..............
District of Columbia.................... 4,761 ..............
Florida................................. 151,950 78,743
Idaho................................... 936,144 411,400
Indiana................................. 96,700 21,513
Iowa.................................... 68,960 4,361
Kansas.................................. 75,000 33,804
Louisiana............................... 361,600 221,520
Maine................................... 135,700 45,320
Maryland................................ 90,459 71,885
Massachusetts........................... 75,897 36,450
Michigan................................ 97,800 28,855
Minnesota............................... 242,500 96
Missouri................................ 103,440 54,063
Montana................................. 973,500 547,194
Nebraska................................ 393,874 332,556
Nevada.................................. 814,872 619,852
New Hampshire........................... 175,306 68,549
New Mexico.............................. 1,242,585 1,098,776
New York................................ 119,634 115,898
North Dakota............................ 772,052 331,948
Ohio.................................... 148,900 70,000
Oregon.................................. 974,440 724,621
Pennsylvania............................ 79,178 ..............
Rhode Island............................ 8,433 ..............
Utah.................................... 996,992 840,175
Vermont................................. 61,594 39,710
Wyoming................................. 1,006,781 471,136
-------------------------------
Total............................. 11,887,071 6,807,033
------------------------------------------------------------------------
Question. How would the proposed 50 percent cost-share requirement
be implemented?
Answer. Under this proposal, APHIS would provide no more than 50
percent of total Federal and cooperative program costs in any State.
Based on the most current Federal/cooperative contribution data
available, Federal contributions would be provided on a limited basis
from neighboring States, in States where the cooperative contribution
is little or nothing. However, limited technical assistance would
continue to be available on a limited basis.
Question. Was funding provided for cattail management and blackbird
control efforts in North and South Dakota and Louisiana as directed in
the fiscal year 1997 Senate Committee Report? How much? Is this
included in your fiscal year 1998 baseline? Please provide a brief
explanation of APHIS' accomplishments in this area.
Answer. Cattail management activities are ongoing in North Dakota.
APHIS expects to treat about 4,500 acres during fiscal year 1997.
Blackbird control activities are ongoing in North and South Dakota. In
Louisiana, blackbird control activities are taking place in Evangeline,
Vermillion, Acadia, Allen Calcasieu, Cameron, Jeff Davis, and St.
Landry Parishes.
During fiscal year 1997, APHIS will spend approximately $100,000
towards cattail management in North Dakota, and approximately $368,000
towards blackbird control in North and South Dakota. An additional
$150,000 is expected to be spent in Louisiana during fiscal year 1997,
toward blackbird control. Funding for cattail management in North
Dakota, and blackbird control in North and South Dakota and Louisiana
is included within the fiscal year 1998 budget request at approximately
the same levels as fiscal year 1997.
During fiscal year 1996, 5,757 acres of cattails in North Dakota
were treated with an EPA-approved herbicide. This reduces the amount of
blackbird roosting and nesting habitat by controlling cattails. By
making the habitat unattractive, blackbirds are forced to seek suitable
roosting and nesting sites away from sunflower fields. Pyrotechnic
devices were also provided to producers in areas where blackbird damage
to sunflowers was severe. In Louisiana, APHIS was assisted by the
Louisiana Rice Growers Association, the Louisiana Department of
Agriculture, and Louisiana State University, with contributions of
supplies, equipment, and staffing, to control blackbirds in rice-
producing areas throughout the State.
Question. The Senate report for the fiscal year 1997 Agriculture
Appropriations Act included an additional $125,000 for the beaver
damage control in Mississippi. Please provide a brief explanation of
APHIS' accomplishments in this area. Is funding included in the budget
to continue this work?
Answer. APHIS' 21 beaver control specialists provide assistance
throughout the State of Mississippi, including the Delta National
Forest. Cooperative funding for the beaver control program in
Mississippi will total approximately $763,000 during fiscal year 1997.
Recent accomplishments include 1,863 projects in which the following
resources were protected: timber, crops, turf and ornamental plants,
dams and levies, irrigation systems, and roads and bridges.
APHIS will spend a total of approximately $275,000 toward beaver
damage control assistance in Mississippi during fiscal year 1997,
including the Congressionally directed $125,000. The fiscal year 1998
budget request includes funding for beaver control assistance at
approximately the same level as fiscal year 1997.
Question. The Senate report for the Fiscal Year 1997 Agriculture
Appropriations Act maintained funding for the cooperative agreement
with the Hawaiian Sugar Planters Association for rodent control in
sugarcane and macadamia nut crops. Please provide a brief explanation
of APHIS' accomplishments in this area. Is funding included in the
budget to continue this work?
Answer. APHIS has established a field office and developed improved
methods of using rodenticide baits for controlling damage in macadamia
nut orchards. Introduced rats that have maintained high populations in
orchards and a variety of other habitats have caused the damage.
Studies of rat movements using radio-telemetry and fluorescent dyes
established that placement of bait in trees resulted in increased bait
acceptance and specifically targeted the animals feeding on the growing
macadamia nuts.
During fiscal year 1997, APHIS will spend approximately $240,000
towards rodent control in sugarcane and macadamia nuts, and anticipates
providing a similar level of support in fiscal year 1998.
Question. The Senate report for the Fiscal Year 1997 Agriculture
Appropriations Act included funding to continue depredation efforts on
fish-eating birds and other species which cause damage to the
commercial fish industry in the mid-South. Please provide a brief
explanation of APHIS' accomplishments in this area. Is funding included
in the budget to continue this work?
Answer. We continue to reduce fish-eating bird damage to the
aquaculture industry. APHIS has assigned three wildlife biologists in
Florida, Mississippi, and Alabama to provide assistance and equipment
to aquaculture producers. These include catfish farmers in Alabama,
tropical fish and catfish farmers in Florida, and bait fish and catfish
farmers in Arkansas. APHIS is expanding activities by providing
additional assistance to catfish and crawfish farmers in Louisiana and
trout farmers in Pennsylvania.
The fiscal year 1998 budget includes funding to continue
aquaculture assistance activities at approximately the same level as
will be provided during fiscal year 1997.
Question. The Senate report for the Fiscal Year 1997 Agriculture
Appropriations Act continued funding at the fiscal year 1996 level for
the Jack H. Berryman Institute of Wildlife Damage Management in Utah
and the Monell Field Station in Pennsylvania. Please provide a brief
explanation of APHIS' accomplishments in these areas.
Answer. The Jack H. Berryman Institute works to improve and resolve
human/wildlife conflicts through education, outreach, and research.
Research efforts at the Institute have been directed at a number of
problems, including bird/aircraft strikes, deer/automobile collisions,
bird depredation at aquaculture facilities, predation of ground nesting
birds, predator control to protect livestock, and deer damage to
agricultural crops. During 1996, the Institute added 13 new research
studies to accompany 57 on-going studies.
The Institute also supports the work of 17 faculty members who
teach 7 different wildlife damage management classes. Also, the
Institute supports the work of 33 graduate students.
Outreach efforts conducted by the Institute include conducting
public attitude surveys regarding wildlife and wildlife damage and the
development and dissemination of wildlife damage management literature.
The Institute continues to develop wildlife damage management
professionals. Since the inception of the Institute, 22 students have
obtained graduate degrees. At least 6 graduates have been employed by
APHIS, and several others by the International Association of Fish and
Wildlife Agencies, the U.S. Fish and Wildlife Service, and the National
Biological Survey.
Research conducted at Monell has provided a foundation from which
the National Wildlife Research Center has been able to pursue
additional specialized research specific to the needs of the animal
damage control program. A recent example was the development of an
effective grape flavored taste aversion substance called methyl
anthranilate. It is now labeled for use as a bird repellent in water
and on turf areas.
Question. Is funding included in the budget to continue this work?
Answer. APHIS provides $35,000 per year in support of the Jack H.
Berryman Institute, and approximately $212,000 per year for an academic
development program at Utah State University. APHIS continues to spend
about $80,000 annually to support the Monell Research Field Station in
Philadelphia, Pennsylvania. APHIS has included funding in the fiscal
year 1998 budget request for all of these efforts at about the current
level.
Question. The Senate report for the Fiscal Year 1997 Agriculture
Appropriations Act directed the Department to maintain the animal
damage control office in Vermont. Please provide a brief explanation of
APHIS' accomplishments in these areas. Is funding included in the
budget to maintain this office?
Answer. APHIS continues to maintain the animal damage control
office in Vermont. Through this office, APHIS employees serve in an
advisory capacity on rabies task forces to help plan rabies management
efforts. This office also offers a cooperatively established toll-free
rabies information hotline to address public concerns regarding the
northward spread of the mid-Atlantic strain of raccoon rabies. APHIS,
in cooperation with the Vermont Departments of Fish and Wildlife,
Health, and Agriculture, responded to nearly 3,400 phone calls
regarding rabies in Vermont in fiscal year 1996.
As Vermont is one of the States in which Federal contributions
exceed those of cooperators, support for animal damage control efforts
in Vermont would be reduced as a result of the requested decrease in
funding for fiscal year 1998 unless additional cooperator funding is
forthcoming. The Vermont office would be maintained to provide
continued advice on task forces for rabies management efforts, but the
toll-free rabies hotline would be discontinued without more cooperator
support.
brucellosis eradication program
Question. The fiscal year 1998 budget request for the Brucellosis
Eradication Program is $19.9 million. This program is being decreased
by $1.7 million from the fiscal year 1997 level of $21.7 million. The
Agency's goal is to eradicate brucellosis by the end of the calendar
year 1998. What activities will APHIS carry out in the Greater
Yellowstone Area? How much money is designated for these activities?
Answer. APHIS will continue to work with and assist the National
Park Service and the State of Montana with the implementation of the
Interim Bison Management Plan and with brucellosis management actions
in the long-term bison management plan when it is finalized. The Agency
will provide full-time veterinarians and part-time personnel to assist
with liaison, planning, bison capture, testing, sampling, and research
activities. APHIS will also provide regional and national staff
assistance and advice to the Greater Yellowstone Interagency
Brucellosis Committee and other ongoing efforts concerning brucellosis
in the Yellowstone Area, including environmental impact statements and
environmental assessments.
Additionally, the Agency will continue to provide resources for
several ongoing brucellosis research projects including an interagency
research project to evaluate the transmission of brucellosis in bison
within Yellowstone National Park (YNP) and a research project to study
the safety and efficacy of RB51 Brucella vaccine on pregnant YNP bison.
The Agency will also fund new research proposals designed to gather
information which would supplement current brucellosis eradication
procedures for use by bison managers in YNP.
In fiscal year 1998, APHIS has agreed to provide bison handling
facilities to the State of Montana for the capture and testing of bison
migrating from the Park. The Agency has also offered assistance to the
State of Wyoming to monitor the commingling of elk and cattle and to
provide brucellosis vaccine to local livestock producers.
At the fiscal year 1998 funding level of $19.9 million, APHIS will
provide $400,000 toward brucellosis control, monitoring, and
eradication activities in the Greater Yellowstone Area and $300,000 for
several brucellosis research projects in bison and elk.
Question. The Secretary of Interior announced that the herds in
Yellowstone should be vaccinated. Will APHIS assist in this activity?
Answer. Yes. APHIS has offered assistance in any brucellosis
eradication activities, including vaccination, neutering, testing or
other surveillance activities, which are undertaken in Yellowstone
National Park, Grand Teton Nation Park, the National Elk refuge, or
Wyoming elk feedgrounds.
Question. Once the Agency has completed the eradication of
brucellosis, will you need appropriated funds to carry out some sort of
maintenance program?
Answer. Yes. Surveillance activities need to continue for
approximately five years after brucellosis is eradicated in the United
States to ensure that no foci of infection have gone undetected. A
reduced level of appropriated funds would be required for these
surveillance activities.
Question. It was reported that a group in Montana claimed that USDA
promised the state of Montana would not lose its brucellosis-free
status if bison are allowed to roam in the state. Does this claim hold
any truth?
Answer. To maintain the Brucellosis Class-Free status the State
must comply with the conditions of the interim bison management
agreement which requires that the State of Montana and the National
Park Service prevent the movement of bison from YNP and the Brucellosis
Management Areas (BMA's). The BMA's were established to reduce the
number of migrating bison being killed. Additionally, the State of
Montana must maintain an active brucellosis surveillance program and
detect no source of the disease in the State to remain in the
Brucellosis Class-Free category.
golden nematode
Question. Is there a need to expand the golden nematode quarantine
and survey program in the Northeast?
Answer. No, there is not. The current quarantine area encompasses
all areas in the Northeast that are infested with or have been exposed
to golden nematode.
Question. If so, why is the program decreased in fiscal year 1998
by $9 million?
Answer. The decrease we are proposing for fiscal year 1998 amounts
to only $9,000 and will not affect the level of program delivery. This
decrease is comprised of a $14,000 decrease for streamlining and a
$5,000 increase for pay costs.
mediterranean fruit fly
Question. APHIS announced in the Federal Register on September 10,
1996 that the Mediterranean fruit fly has been eradicated in the areas
in California and that the quarantine restrictions are no longer
needed. Is the decrease proposed in the fiscal year 1998 for the fruit
fly exclusion and detection activities due to this announcement?
Answer. No, it is not. The decrease proposed is for the program's
share of the reduction in Federal employment costs. This decrease is
comprised of a $320,000 decrease for streamlining and a $129,000
increase for pay costs.
boll weevil
In the Fiscal Year 1997 Agriculture Appropriations Act, a boll
weevil eradication loan program was initiated at a program level of $35
million. The fiscal year 1998 budget proposed to terminate this loan
program. The Secretary must promulgate regulations for the fiscal year
1997 loan program, but has not yet done so.
Question. The thought was that a loan program would be a less
costly way to increase funding for boll weevil eradication. Does the
Department not share this view. Why?
Answer. The program regulations are being developed by the Farm
Service Agency and they are under review. Since the program is
controversial in some regions due to possible environmental impacts,
the Farm Service Agency is currently working with APHIS to develop an
environmental assessment to address these concerns. The proposed
regulation is expected to be published, for comment, in the near
future. Once the comments have been addressed, the implementing
regulation will be published.
The President's budget requests $6.45 million for the Boll Weevil
Eradication Program. This is a decrease of $9.8 million from the fiscal
year 1997 appropriated level of $16.2 million. Several areas of
Mississippi, Louisiana, Arkansas, and Texas which have not previously
participated in the eradication program will be entering into the
program next year.
Question. How many new acres do these areas encompass?
Answer. Areas that will begin program operations in August 1997
include: 450,000 acres in the hill section of Mississippi; 125,000
acres in the Red River Valley of West Louisiana; 6,000 acres in
southwest Arkansas; and 136,000 acres in the St. Lawrence area of west
Texas. Areas that will begin program operations in fiscal year 1998
include: 200,000 acres in southwest Tennessee; 260,000 acres in the
south delta of Mississippi; possibly 25,000 acres in New Mexico; and
possibly two areas in Texas and Oklahoma totaling 1.06 million acres.
Question. Will your budget request support the initial startup
costs in all these states adequately?
Answer. Yes, it will. Although we will be providing less funding in
fiscal year 1998, the States will offset our reduced contribution by
contributing a greater portion in fiscal year 1998, as they had agreed
to in each State's referenda. Therefore, our budget request would
adequately support initial startup costs when combined with an
increased share from the States.
buildings and facilities
Question. The budget request includes a decrease of $3.2 million
for a one-time construction project provided in fiscal year 1996. Which
project are you speaking of and why are these funds not required?
Answer. The $3.2 million provided in fiscal year 1997 is for APHIS'
share of the Plum Island Animal Disease Center modernization project,
which is an ongoing project with ARS. In the past, the Appropriation
Committees have asked us to justify all construction projects. Even
though this was a project in fiscal year 1997, we justified it again
for fiscal year 1998. In fiscal year 1998, we have requested another
$3.2 million, along with $5.0 million requested by ARS, to fund APHIS'
share of the ongoing modernization project at Plum Island Animal
Disease Center. Funds will be used to upgrade electrical and structural
deficiencies and to address safety and environmental issues.
horse protection
In the Senate report accompanying the fiscal year 1997 agriculture
appropriations bill, the Committee directed the Department to provide
more effective use of funds for the enforcement of the Horse Protection
Act, to establish programs and policies for conducting horse show
inspections and other related enforcement activities to USDA-certified
horse industry organizations.
Question. Please provide a brief explanation of APHIS'
accomplishments in these areas. Is funding included in the budget to
continue this work?
Answer. We have drafted a strategic enforcement plan. This plan
places increased regulatory authority and enforcement responsibilities
on USDA-certified organizations. We developed the plan with the advice
and equine expertise from both APHIS veterinarians and horse industry
organizations.
We are now finalizing the plan. We revised the draft to incorporate
information gathered from all sectors of the horse industry, as well as
three public forums held in 1996. Federal Register comments, and write-
in campaigns. Departmental review should be complete in March 1997.
After making any necessary revisions, we will make the plan available
to the horse industry to seek a final consensus. The proposed budget
will allow us to continue in this effort.
national poultry improvement act
Question. The fiscal year 1997 Agriculture Appropriations Senate
report directed the Department to enhance the fiscal year 1997 funding
for the National Poultry Improvement Program which is funded in the
``Animal health monitoring and surveillance'' account. Please provide a
brief explanation of APHIS' accomplishments in this area. Is funding
included in the budget to continue this work?
Answer. To enhance the National Poultry Improvement Plan (NPIP),
APHIS increased the NPIP funding allocation from $240,000 to $260,000
in fiscal year 1997. APHIS plans to use the additional funds to hire an
epidemiologist who will spend 50 percent of their time on the NPIP
program and 50 percent on activities related to general poultry
diseases.
Yes, $260,000 is included in the fiscal year 1998 budget as part of
the Animal Health Monitoring and Surveillance line item.
noxious weeds
The fiscal year 1997 Agriculture Appropriations Senate report
directed the Department to include funding at the fiscal year 1995
level to continue its work on the eradication of goatsrue in Utah, to
continue its efforts to control tropical soda apple in the Southeast,
and to work with the Hawaii Department of Agriculture to secure
environmentally safe controls for alien weed pests.
Question. Please provide a brief explanation of APHIS'
accomplishments in these areas. Is funding included in the budget to
continue this work?
Answer. In fiscal year 1997, we transferred $100,000 to Utah State
University, to conduct eradication activities in Cache County, Utah.
Currently, we have a 5-year plan with the State of Utah to conduct
post-eradication surveys to verify eradication. During this process, we
provide technical expertise to the State. We have included $30,000 in
our fiscal year 1998 budget for this work.
To address outbreaks of Tropical Soda Apple (TSA) in the Southeast,
we are concentrating on education, survey, and management of incipient
infestations. In fiscal year 1996, we conducted surveys on properties
in most States that have received cattle, bahiagrass, or composted
manure from infested sites in Florida. As a result of these surveys, we
have confirmed outbreaks in Alabama, Georgia, Mississippi, North
Carolina, Pennsylvania, South Carolina, Tennessee, and Puerto Rico. In
all instances, the confirmed infestations have either been eradicated
or are under intensive management for eradication. We have included
approximately $100,000 in our fiscal year 1998 budget to continue this
work.
Regarding alien weed pests, we are cooperating with the U.S. Forest
Service, and several agencies from the Interior Department to bolster
our protection of managed and natural ecosystems in Hawaii from
introduced invasive plants. To deal with this issue, we are training
our personnel as well as State personnel in Hawaii. Also, we are
working with the State to establish a Hawaii Weed Team. This Team will
cooperate to enhance effectiveness in preventing and controlling weeds
in Hawaii. In addition, we are working with State officials to create a
Hawaii Weed Detection and Reporting Network, which would include plant
collectors, botanists, and weed scientists. This Network will ensure
that the Hawaii Weed Team learns about new infestations so early
actions can be taken when eradication is still feasible. We have
included approximately $30,000 in our fiscal year 1998 budget for this
work.
eradication of kudzu
Kudzu is a big problem in Mississippi. It is a nuisance because it
takes over any vegetation in its path. Foresters find this weed to be
extremely difficult to control with the current land management
practices available to them.
APHIS has never been involved in any activities which would
eradicate this weed. Kudzu is not listed (an official process that
involves scientific review and publication in the Federal Register) as
a noxious weed. The Federal Noxious Weed Act of 1974, 7 U.S.C. 2801-13,
defines a noxious weed in part as a ``plant which is of foreign origin,
is new to or not widely prevalent in the United States, and can
directly or indirectly injure crops.'' This Act provides APHIS'
authority to eradicate or control noxious weeds.
Question. Is the definition of a noxious weed the only impediment
that stops APHIS from getting involved in ways to eradicate Kudzu?
Answer. The definition is one impediment. Kudzu is widespread
occupying five million acres in the eastern United States. Another
major impediment is the large cost of a kudzu control program.
Question. What is the estimated cost of eradicating Kudzu if the
law was changed?
Answer. In practical terms, kudzu is well beyond the point of being
eradicated totally from the United States. There is technology
available to control kudzu and eliminate it from individual sites,
however, an APHIS-directed program would have to be a massive, multi-
year effort. If we became involved in a cooperative control effort with
State agencies, Federal land management agencies, and private land
owners, control costs would be a minimum of $160 per acre, spread over
three years. If we assume that 5 million acres are infested, the total
cost of chemical control would be $800 million. This estimate does not
include costs associated with research, detection, delimiting, and
appraisal surveys (before and after), monitoring, clean up treatments,
and re-vegetation efforts.
______
Questions Submitted by Senator McConnell
commercial transportation of equine for slaughter
Question. During last years appropriation hearing I asked the
Secretary for his cooperation and assistance in implementing Title IX--
Miscellaneous, Subtitle A--Commercial Transportation of Equine for
Slaughter. I was informed that a determination could be made, however,
it would be difficult to enforce this regulation without additional
funding to support inspection personnel and related costs. Please
provide the Committee and myself the status of implementing the
Commercial Transportation of Equine for Slaughter?
Answer. To date, the Commercial Transportation of Equine for
Slaughter statute has not been implemented.
Question. Has the Department issued any guidelines/regulations? If
not, when?
Answer. No guidelines or regulations have been issued. An
interagency working group was formed to assess the feasibility of
implementing this program and to determine program resource
requirements. The group concluded that effective implementation of the
program would require conducting preliminary research, producing an
educational publication and video, and hiring a veterinary medical
officer(s) and program assistants. It is not yet known when the
Department will issue guidelines or regulations.
Question. Last year the Secretary said it would be difficult to
enforce this regulation without additional funding, what can be done to
enforce this provision without additional funds?
Answer. No enforcement activities can be conducted at the current
funding level.
Question. If additional funds are needed did you request funds? If
not, why?
Answer. Because of budget constraints, the Administration was not
able to request additional funds for the commercial transportation of
slaughter horses program.
Question. How much is needed to enforce this provision?
Answer. It is estimated that $411,000 would be required to
establish the Commercial Transport of Slaughter Horses program.
Question. Please provide a breakdown of how these funds would be
spent?
Answer.
Commercial Transport of Slaughter Horses Program
Dollars
Cost category (est.)
Salaries and Benefits......................................... $245,000
Travel........................................................ 31,000
Transportation of Things...................................... 17,000
Printing...................................................... 8,000
Cooperative Agreements........................................ 34,000
Supplies and Materials........................................ 6,000
Equipment..................................................... 70,000
--------------------------------------------------------------
____________________________________________________
Total................................................... 411,000
______
Questions Submitted by Senator Burns
brucellosis
Question. Quickly, I would like to state that I have been a strong
proponent of the Animal and Plant Health Inspection Service. I have
never had a problem coming into this country and proceeding through the
protocols necessary to make sure that all the animals and plants in
this country are protected. I would also like to commend you for the
approach you are taking to make sure we have a clean and healthy bison
herd in Yellowstone National Park.
I would like to start off by asking how many herds in America today
are infected by Brucellosis? How many 10 years ago?
Answer. Of the estimated 1.2 million cattle herds in the United
States, 26 are currently affected by brucellosis and under quarantine.
Ten years ago, at the end of fiscal year 1987, there were 3,160
affected herds under quarantine.
Question. Does the reduction in funding adequately accept the risk
as we continue to see it coming out of Yellowstone National Park?
Answer. The fiscal year 1998 President's Budget does include
adequate funding for the brucellosis program, specifically for
activities in the Greater Yellowstone Area (GYA). This funding will
allow APHIS to continue to support research to develop alternative
brucellosis vaccines for bison and elk and to study the transmission of
brucellosis from wildlife to domestic livestock. In addition, funds
will support a wildlife veterinarian in Montana to serve as a liaison
among the involved government agencies.
APHIS is committed to working cooperatively with the involved
government agencies to address the most critical issues. These include
eliminating brucellosis in the GYA, providing additional suitable bison
winter range outside the park, and coordinating these activities in
such a way to encompass the interests of the stakeholders.
Question. Could you provide the committee with the brief on the
current work being done on research for an effective vaccine for bison
and also for elk as a treatment against Brucellosis?
Answer. To date, APHIS has committed more than $3 million toward
brucellosis research in the GYA. A new vaccine, RB51, has recently been
approved for use in cattle. Researchers are also testing this vaccine
on bison calves, male bisons, pregnant bison, and elk to determine its
safety and effectiveness. Specific examples of research on RB51 include
a vaccination field study on bison yearlings in South Dakota, a
vaccination safety and efficacy study on pregnant bison in Idaho, a
vaccination safety study in male bison, vaccination safety field trials
in bison calves, and a controlled study on the immune response of elk
to the vaccine. Tests of the RB51 vaccine look promising. Before RB51
can be approved for use in bison and/or elk, the vaccine must pass
additional safety and efficacy trials. This process may take up to 2
years.
Question. Mr. Medley, I appreciate your willingness to work with
the state of Montana in protecting their Brucellosis free status, but
in all reality what does your document mean to Montana and Wyoming when
we have other states either that have with been imposing or threatening
to impose sanctions on our states?
Answer. Most Federal requirements are relieved when States, such as
Montana and Wyoming, attain Class Free status. Traditionally, State
import requirements for brucellosis have paralleled the Federal
interstate movement requirements. However, the States surrounding the
GYA are in a unique situation. Their cattle are free of brucellosis,
but a perception exists that their cattle may have been exposed to
brucellosis infected bison from Yellowstone National Park. Several
States have deemed it necessary to protect their cattle by imposing or
threatening to impose additional import requirements, which are
scientifically-based, on the surrounding States. Fortunately, most
States believe that the class statuses of these States have not been
compromised.
APHIS can minimize the concerns of the importing States by working
with the National Park Service to properly handle the Yellowstone bison
leaving the Park to prevent their exposure to the brucellosis free
cattle in the States surrounding the Park. In addition, APHIS can work
to minimize the imposition of State import requirements that interfere
unnecessarily with interstate commerce. It is not unrealistic, however,
to believe that some States may continue to impose testing requirements
on cattle from around Yellowstone until brucellosis has been eradicated
from the bison in the Park.
animal damage control
Question. Wolves have been introduced in Idaho, and Montana and are
showing up in parts of Wyoming. With the increased wolf numbers, what
impacts does the wolf presence in a given area have on the ADC program
and it's ability to respond to other predation problems?
Answer. Gray wolves began naturally moving back into northwestern
Montana from Canada in the mid-1980's. This naturally occurring
population of wolves is increasing and now occupies northern Idaho as
well as northwestern Montana, and consists of about 70 adults and
yearlings and possibly 30 pups. To speed wolf recovery in the region,
the U.S. Fish and Wildlife Service (FWS) captured 29 wolves in Canada
in 1995 and 37 wolves in 1996. They released them into Yellowstone
National Park and central Idaho. This group of wolves is considered a
nonessential experimental population and it is increasing as well.
Introduced wolves have successfully bred and are raising pups.
As evidenced by the increase in their numbers, both naturally
occurring and reintroduced gray wolves can thrive in many areas of
Idaho, Montana, and Wyoming. They sometimes frequent areas of human
activity and some seem to select the same type of habitat that some
people prefer, such as areas of interspersed forest and open areas
typical of ranching communities in western Montana. Most of the wolves
have not come into direct conflict with people, but some have killed
livestock. An increase in these conflicts is expected as the wolf
population increases.
ADC plays an important role in wolf recovery. This includes
verification of wolf livestock predation, capturing depredating wolves,
mediating conflicts between agencies and resource owners, and
disseminating information to the livestock community and the general
public. Wolf recovery and reintroduction in Idaho and Montana have
caused restrictions on the use of traditional methods of control where
wolves may exist. This results in more costly control methods such as
aerial operations, to ensure ADC activities minimally impact wolves.
Also, the presence of wolves creates additional workload, causing
delays in ADC response time to requests for all predator control
assistance in wolf recovery areas.
Question. Is the U.S. Fish and Wildlife Service contributing any
research efforts on funding to address capturing methodologies that the
USDA, APHIS, Animal Damage Control program could use that would
minimize impacts that wolf recovery will have on other aspects of the
ADC program?
Answer. APHIS does not receive funding from the FWS for research
related to wildlife capturing methodology, nor is the Agency aware of
other FWS involvement in such research.
Question. Plans to release Mexican wolves in New Mexico and Arizona
next year are underway. Has the U.S. Fish and Wildlife Service given
consideration to the impacts that the presence of wolves will have on
the routine activities of the USDA, APHIS, Animal Damage Control
program uses to reduce coyote damage to livestock? What ADC tools will
be restricted? What is the increased cost to APHIS/ADC with a
limitation on these tools? What the cumulative impacts to the livestock
industry in terms of increase predation by predators other than wolves
and increased management cost?
Answer. In the final ADC Environmental Impact Statement (EIS) for
reintroduction of the Mexican Wolf within its historic range in the
Southwestern United States, the FWS indicates that wolf reintroduction
will primarily impact cattle resources in the area with potential
losses to wolves ranging from 0 to 34 individual animals. FWS is
uncertain but theorizes that populations of coyotes and mountain lions
could also be displaced, which could result in temporary higher
concentrations of these animals in some areas. The FWS will restrict
the use of the M-44, neck snares, and foothold traps in the wolf
recovery areas of Arizona and New Mexico. The final EIS also indicates
that these restrictions will likely reduce ADC effectiveness in
controlling other predators in the area unless ADC commits additional
resources.
The FWS plans to issue a final rule for the proposed establishment
of a nonessential experimental population of the Mexican Gray Wolf in
Arizona and New Mexico before wolves are released in these areas. The
final rule, which is expected to be published in the Federal Register
about the first week in June 1997, will specify the circumstances under
which control or management intervention of wolves can occur, and the
methodologies which can be employed. Over the next 9 months, the FWS
will develop detailed management plans and agreements to define its
working relationship with cooperating agencies.
Under current management plans for wolf recovery in the Northern
Rocky Mountain States, the use of traditional methods of control
including M-44's, foothold traps, and snares would be restricted or
forbidden in known wolf population areas.
Current management plan restrictions require more time consuming or
more expensive control approaches such as aerial control, to ensure
that ADC activities do not significantly impact wolf recovery efforts.
Based on the impact of wolf management activities on ADC livestock
protection efforts in Montana, APHIS estimates that increased costs
currently amount to about $85,000 per year. If similar programs were to
be introduced in Arizona and New Mexico, initial impacts could be
expected to be approximately the same in each State, with increases in
proportion to increases in wolf populations.
A study would be required to determine the impact of increased
predation to the livestock industry. However, an increase in predation
can be expected as workloads increase due to expanding wolf
populations. Because of increased workload, ADC response time to
requests for assistance, which involve traditional livestock protection
activities, is increasingly delayed.
Restrictions on the use of traditional control tools are resulting
in the use of more expensive control techniques such as aerial control.
Also, a need for additional employees as wolf populations increase will
most likely cause increased costs to both APHIS and cooperators.
Question. This fiscal year Congress appropriated $100,000 to ADC
for wolf damage control, and the U.S. Fish and Wildlife Service agreed
to provide ADC an additional $100,000 for this same purpose. How are
these funds being spent, and are they adequate to respond to wolf
damage complaints? Is this amount adequate for future problems as the
wolf population grows?
Answer. Funds are used for verification of wolf livestock
predation, capturing depredating wolves, mediating conflicts between
agencies and resource owners, and disseminating information to the
livestock community and the general public. The new interagency
agreement between FWS and APHIS commits a total of $200,000 per year
toward efforts in dealing with wolf predation on livestock in Idaho,
Montana, and Wyoming. APHIS currently estimates these efforts to cost
approximately $215,000 in fiscal year 1997.
In addition to a projected reprioritizing of approximately $15,000
in fiscal year 1997 for wolf management efforts, APHIS is projecting
the need to reprioritize approximately $58,000 in fiscal year 1998,
beyond the $200,000 per year currently committed in the APHIS/FWS
interagency agreement for work in Idaho, Montana, and Wyoming. With
expected reintroductions of the Mexican wolf in the near future, APHIS
may need to expand efforts to include the States of New Mexico and
Arizona. Total efforts including the additional States could cost
$730,000 in fiscal year 1999, and $1,162,000 in fiscal year 2000.
karnal bunt
Question. Could you provide this committee with the current status
of Karnal Bunt in the United States?
Answer. Currently, Karnal Bunt is confined to small areas in
Arizona and California. We are now regulating four counties in Arizona
and parts of two counties in California due to the presence of the
disease. Our National Survey has demonstrated that the disease is
apparently not present in detectable levels in other production areas.
As a precautionary measure, though, we are also regulating small areas
in New Mexico and Texas because infected seed was planted in these
areas. Bunted kernels have never been collected from fields in these
two States. These regulations are necessary to control the movement of
infected grain and seed. For several years before the detection of
Karnal Bunt in Arizona in March 1996, we had been conducting Karnal
Bunt surveys as part of our Cooperative Agricultural Pest Survey
program. The data gathered through these surveys has enabled us to
continue certifying wheat for export even after the 1996 detection. To
date through our National Survey, we have tested over 15,000 grain
samples representing all wheat-producing areas in the United States.
Based on these tests, we have not been able to confirm the presence of
Karnal Bunt in any areas of the U.S. other than those where we knew the
disease to be present.
In addition, we will co-host an international symposium in August
with Mexico and Canada through the auspices of the North American Plant
Protection Organization to gain consensus on Karnal Bunt's disease
threat status. Our goal is to provide all countries with the
opportunity to review all available data and create rational and
objective standards for the international movement of grains affected
by various smut diseases. Also, we will seek to determine if there is
international support for minimizing regulatory actions on Karnal Bunt.
Question. How does this reflect upon our ability to export our
product overseas to markets we have had long standing trade
arrangements with?
Answer. Our wheat exports have not been significantly affected
because Karnal Bunt has not reached the major wheat-producing areas of
the United States. We are still able to certify most wheat for export
by demonstrating that it is not coming from areas where Karnal Bunt is
known to be present or areas at risk because of Karnal Bunt. Also, we
can certify that over 90 percent of U.S. wheat originates in areas
where Karnal Bunt is not known to be present; we have seen a relatively
normal movement of wheat exports since the beginning of our program.
The export of speciality wheat from the regulated areas in Arizona and
California has been affected, but this is an extremely small portion of
total U.S. exports. Because virtually all trade partners will accept
wheat from areas where Karnal Bunt is not known to be present, the
presence of the disease in regulated areas of the southwest will not
materially affect wheat exports in the future.
Question. On the research end of the problem, could you provide me
with the current status of providing a certificate to Montana State
University, College of Agriculture, to allow them to hold in quarantine
a portion of wheat infected with KB to do research on, under an
agreement between Montana State university and the Agricultural
Research Service?
Answer. In April, we provided a permit to Montana State University
(MSU) to conduct specified laboratory research on Karnal Bunt under
certain safeguards. These safeguards were agreed upon by MSU
scientists, the Montana State Department of Agriculture, the Montana
State Plant Health Director, and the Agricultural Research Service. The
permit does not allow MSU to hold in quarantine any wheat infected with
Karnal Bunt since they do not have a certified quarantine facility.
Question. Along this same line of thought, Montana State has
requested on several occasions the assistance of a quarantine facility
expert to review the plans and blueprints of a research lab in Bozeman,
Montana. However, they continue to be bounced around in the process.
Many times they are told the plans look good, but no real assessment
can be made until the construction is complete. This sounds like
sending good money after bad. Could you look into this situation and
see what you can do to assist Montana State university in completion of
the plans for the development of a research lab?
Answer. On February 15, the Davidson Kuhr Architects Company
submitted drawings for a proposed quarantine facility at MSU to our
National Plant Germplasm Quarantine Center in Beltsville, Maryland. We
requested a written specification proposal from MSU to outline how
safeguards that are included in our draft guidelines would be
incorporated into their plans. MSU advised us that they would contact
the architect to provide this additional documentation. On May 14, we
contacted the architect company and confirmed that MSU had asked for a
proposal for our review and evaluation. The architect then informed us
that he will submit the proposal by early June. When we receive the
proposal, it will take approximately two weeks for review. Once the
architect corrects any deficiencies we may find, we will approve the
proposal and construction may begin. We will conduct another evaluation
once the facility has been completed and will continue providing the
architect with any assistance he may need. This facility is needed to
properly contain the Karnal Bunt organism.
______
Questions Submitted by Senator Bumpers
boll weevil
Question. Your budget for fiscal year 1998 includes a decrease in
spending for boll weevil eradication. You state fewer funds are needed
due to the fact that the weevil has been eradicated in many areas. In
those areas where the weevil has been eradicated, how do profit margins
for cotton farmers compare to farmers in states where the weevil is
still present? Rather than reducing funds, did you consider maintaining
level funding and concentrating more on the remaining areas of
infestation.
Answer. The current profit margin for cotton farmers in weevil-free
areas, such as Georgia, is roughly $200 per acre. In contrast, the
current profit margin for cotton farmers in moderately infested areas
of the mid-South, including southern Arkansas, is roughly only $100 per
acre. This disparity in profit margins is primarily due to reduced
costs of pest control and increased yields for farmers in weevil-free
areas.
In the earlier stages of the eradication program, growers assumed a
higher risk of program failure in participating. Therefore, APHIS had
to contribute significant financial resources to mitigate that risk.
But as the number of eradicated acres has increased, the growers' risk
of participating has decreased as we have effectively demonstrated the
program's benefits. We consider it reasonable, as we try to reduce
Federal expenditures to help balance the budget, to ask growers to pay
a larger share of program costs.
Question. You further state that APHIS will pursue policies in
which beneficiaries should contribute more to overall program funding
through user fees or cooperative contributions. Last year, this
subcommittee created a loan program through the Farm Service Agency to
enable cotton farmers to engage in boll weevil eradication efforts to
supplement direct funding from APHIS. In this way, farmers were putting
more of their own money up front. Still, for some reason, the budget
request for fiscal year 1998 would terminate that loan program. Don't
you think that loan program was consistent with your aim of increased
farmer contributions? Did you coordinate your boll weevil program with
FSA?
Answer. Under the grant program, producers were not responsible for
repayment. But under the loan program, producers now bear a larger
share of the responsibility and costs and are responsible for repaying
the loan. We believe that the loan program is a great benefit to the
boll weevil eradication effort. Unfortunately, the regulations to
operate the program were not in place prior to FSA's fiscal year 1998
budget request. Therefore, the request did not include any provision
for the program.
We helped them prepare the environmental documentation for the loan
program and we have acted as a liaison between FSA and cotton growers
foundations. These regulations were published in the Federal Register
on May 16, 1997
animal damage control
Question. The budget reduces the funding for ADC and goes further
to require that no more than 50 percent of federal funds be used for
ADC programs in any state. This could be problematic for states, such
as Arkansas, where ADC programs have been used to control migratory
species, such as blackbirds, rather than indigenous species, such as
beaver, coyote, or other ``localized'' problem animals. It appears that
Arkansas' ADC office will be closed under your proposal simply because
it has concentrated its resources on federal migratory pest species
instead of setting up a government subsidized pest control agency to
compete with state agencies and private sector companies. Please
explain your understanding of the separation of clear federal duties in
the area of wildlife management and those duties that are the clear
responsibility of State Wildlife Agencies and include a statement on
migratory versus non-migratory species problems. Do you consider
cooperatively financed ADC operations to be in direct competition with
the private wildlife control industry? Does APHIS have any requirement
or mechanism for Regional, Administrative, or Washington office to
obtain cooperative funding?
Answer. APHIS has a responsibility to provide leadership and
assistance to the States, local governments, and private individuals in
managing damage caused by the Nation's wildlife. The Animal Damage
Control Act, as amended, authorizes the Secretary of Agriculture to
conduct activities and to enter into agreements with States, local
jurisdictions, individuals, and public and private agencies,
organizations, and institutions in the control of nuisance mammals and
birds and those mammal and bird species that are reservoirs for
zoonotic disease. The U. S. Fish and Wildlife Service is the regulatory
Federal Agency primarily responsible for the conservation of migratory
birds, threatened and endangered species, certain marine mammals, and
sport fishes. Specific responsibilities of State wildlife agencies
vary, but generally include regulatory authority to conserve and
protect migratory and non-migratory wildlife, and species of special
concern.
APHIS is specifically authorized to provide wildlife damage
management assistance to these and other governmental agencies as well
as private organizations and individuals. Such wildlife damage
assistance is planned and implemented in coordination with the FWS and
State wildlife management agencies to ensure regulatory compliance and
environmental soundness. APHIS also coordinates wildlife damage
management program efforts and negotiates related cooperative
agreements in multiple states to enable more effective, cooperative,
and cohesive programs.
The ADC program works closely with the pest control industry to
ensure that competition with private enterprise does not occur. Where
private resources exist, ADC personnel routinely refer people seeking
assistance to local pest control or nuisance wildlife operators. APHIS
personnel provide technical assistance, training, and instructional
sessions in the use of various methods, both lethal and nonlethal to
members of the pest control industry. APHIS works closely with industry
in maintaining pesticide registrations, data gathering, addressing
research needs, and also in providing assistance to industry members in
obtaining the required migratory bird depredation permits.
Additionally, APHIS has developed a training and certification program
allowing pest control operators and others access to the avicide
Compound DRC-1339 and the tranquilizer Alpha-Chloralose. Formerly,
these chemicals were authorized for APHIS use only, but now may be used
by the pest control operators when under the supervision of APHIS
personnel.
APHIS has mechanisms in place to establish cooperatively funded
agreements at the regional, administrative, or Washington office levels
for ADC. Cooperative relationships have been established with various
organizations and governmental agencies at regional and national
levels, to identify and attain additional funding resources. This
includes the aviation industry, the Federal Aviation Administration and
the Department of Defense. Nevertheless, most ADC cooperative funding
agreements are negotiated at the State level to provide effective and
responsive service to cooperators. In regard to requirements for
cooperative funding, ADC has maintained a policy for the past several
years in which all new cooperative agreements must meet a minimum 50/50
percent cost ratio.
imported fire ant
The University of Arkansas at Monticello, through APHIS, has been
working with land owners in Arkansas and scientists at the University
of Florida on methods to control the fire ant. They have been able to
document real costs of the fire ant in terms of economic losses and I
understand the techniques they have developed are of keen interest to
local land owners and that their efforts in conjunction with the
University of Florida may hold real promise through possible
introductions of natural predator species they found in Argentina.
Question. Could you comment on your perception of the problems
posed by the fire ant and the work conducted at and through the
University of Arkansas at Monticello?
Answer. The imported fire ant (IFA) has spread through the most of
its range in the Southeast and Central United States. It is currently
established in the following regulated States: Alabama, Arkansas,
Florida, Georgia, Louisiana, Mississippi, North Carolina, Oklahoma,
Puerto Rico, South Carolina, Tennessee, and Texas. The threat posed by
the IFA is especially significant since this pest lacks natural enemies
and there are no effective, efficient, and environmentally acceptable
control agents available for large scale application on agricultural
land. Until the Environmental Protection Agency registers an acceptable
control product, we cannot conduct any area-wide control activities.
For APHIS to cooperate in control treatments, we would need to conduct
a new environmental impact statement, which would require $1 to $1.5
million and 1.5 to 2 years to complete. We have completed a preliminary
environmental assessment, which demonstrated a strong case for no
action with current technology. Still, we are continuing to assist the
States in preventing the spread of IFA to the Western United States. We
will also help States maintain domestic markets for nursery products.
In addition, we will continue to evaluate the efficacy of regulatory
treatments for preventing further artificial spread of the IFA.
For the last several years, we have contributed $200,000 per year
to the University of Arkansas at Monticello through a cooperative
agreement to conduct research on IFA's. The three areas funded by this
agreement are a self-supporting community abatement program, an
economic impact assessment, and an ARS biological control project. Of
the $200,000 provided to the University, $76,000 is devoted to the
abatement program, $100,000 is devoted to the economic impact
assessment; and $24,000 is devoted to the biological control project.
For the abatement program, the University conducted several
demonstrations of control programs in public areas to help area
residents better manage fire ants using existing control methods. This
project has developed plans that other communities can use to initiate
their own abatement programs. Also, the project produced and
distributed several videos and manuscripts. These public information
tools are designed to describe the theory and practice of using
community-wide programs to minimize control expenses and reinfestation
rates and to inform individual landowners about temporary IFA control
methods.
The economic assessment analyzed the effect of fire ants on
agriculture and the general public. It concluded that IFA's cause $1.1
billion annually in agricultural damage, harm to public health and
welfare, and equipment problems. It also indicated that economic
impacts are especially severe where human activity is frequent. In
addition, it showed that pesticides alone will not provide a long-term
solution to the problem because of IFA's rapid recolonization and
colony growth rates. Therefore, the focus for IFA control is turning to
non-pesticide strategies, such as biological controls.
Currently, the University is contributing to an ARS biological
control project to find effective control agents for IFA in South
America. When imported into the United States, these enemies could
reduce populations to manageable levels similar to those found in most
of South America. So far, this project has identified three different
organisms for potential impact on IFA in the United States, including a
parasitic fly that attacks only IFA, a protozoa disease that weakens
the ants and eventually kills the colonies, and another parasitic ant
that attaches itself to the IFA queen and causes a debilitating drain
on the colony. When sufficient testing is completed, APHIS' role would
be to mass produce and distribute the biological control agents. None
of the identified organisms by themselves will be enough to eradicate
IFA from the United States because the pest is so widespread, but we
hope that the use of one or a combination of these methods will enable
native ants to compete effectively with the IFA and manage its
population, as well as reduce its economic and public health impact on
the U.S. public.
______
Questions Submitted by Senator Kohl
animal damage control
Question. I understand that USDA is seeking a 50/50 cost-share
funding arrangement for the Animal Damage Control cooperative programs
for fiscal year 1998. Do you have any accounting to show how much of
the field operations cooperators have funded in the past few years, by
state and region?
Answer. The following table contains the amount of federal
appropriated funds and cooperator contributed funds allocated by State
for fiscal year 1994, fiscal year 1995 and fiscal year 1996. These
funds are used for efforts such as resolution of wildlife conflicts at
airports, the rabies control project in Texas and other human health
and safety issues, as well as for the protection of endangered species
and public and private property.
[The information follows:]
----------------------------------------------------------------------------------------------------------------
Fiscal year 1996 Fiscal year 1995 Fiscal year 1994
State -----------------------------------------------------------------------------------
Approp. Coop. Approp. Coop. Approp. Coop.
----------------------------------------------------------------------------------------------------------------
AL.......................... $159,900 $31,963 $163,000 $57,465 $108,000 $82,454
AK.......................... 45,000 680,459 50,000 217,986 42,257 312,996
AZ.......................... 448,799 265,791 434,384 267,774 437,239 262,517
AR.......................... 258,890 ............ 259,690 ............ 249,690 ............
CA.......................... 1,414,915 2,264,991 1,526,097 2,290,753 1,517,736 2,047,100
CO.......................... 790,480 240,854 765,524 167,633 770,090 256,545
CT.......................... 9,370 ............ 14,992 ............ 14,720 ............
DE.......................... 10,580 ............ 10,580 ............ 10,000 ............
DC.......................... 4,761 ............ 10,580 ............ 10,000 ............
FL.......................... 151,950 78,743 155,200 44,150 93,500 32,877
GA.......................... 103,800 109,477 103,800 103,398 96,000 109,665
HI.......................... 100,000 670,262 95,000 600,732 84,050 655,712
ID.......................... 936,144 411,400 905,819 406,106 906,380 359,101
IL.......................... 117,050 326,137 117,050 320,447 117,050 103,687
IN.......................... 96,700 21,513 104,387 10,363 91,000 11,205
IA.......................... 68,960 4,361 54,235 2,197 51,884 543
KS.......................... 75,000 33,804 75,000 1,126 71,327 ............
KY.......................... 81,600 126,212 118,663 199,752 80,000 82,155
LA.......................... 361,600 221,520 362,400 137,820 352,400 99,758
ME.......................... 135,700 45,320 135,700 96,980 133,500 90,238
MD.......................... 90,459 71,885 84,640 40,446 80,000 41,370
MA.......................... 75,897 36,450 73,086 16,000 71,760 29,558
MI.......................... 97,800 28,855 105,487 8,876 96,000 8,424
MN.......................... 242,500 96 246,500 30 242,500 2,579
MS.......................... 567,700 849,499 527,800 654,052 472,800 364,651
MO.......................... 103,440 54,063 133,539 41,103 133,416 19,783
MT.......................... 973,500 547,194 987,759 538,474 993,981 538,512
NE.......................... 393,874 332,556 372,174 245,502 372,351 223,300
NV.......................... 814,872 619,852 791,172 586,071 796,987 633,775
NH.......................... 175,306 68,549 186,900 62,135 172,050 57,257
NJ.......................... 109,340 208,182 105,784 428,990 98,600 240,904
NM.......................... 1,242,585 1,098,776 1,175,550 1,218,389 1,184,525 919,100
NY.......................... 119,634 115,898 119,634 28,823 131,000 31,621
NC.......................... 185,850 575,420 135,850 305,579 126,500 209,437
ND.......................... 772,052 331,948 748,721 387,746 752,031 311,606
OH.......................... 148,900 70,000 148,900 47,037 146,000 44,859
OK.......................... 789,852 927,322 766,152 800,186 751,355 716,042
OR.......................... 974,440 724,621 943,788 737,608 951,323 713,003
PA.......................... 79,178 ............ 83,116 ............ 71,400 ............
RI.......................... 8,433 ............ 5,622 ............ 5,520 ............
SC.......................... 163,611 269,778 113,611 245,648 104,000 210,000
SD.......................... 300,000 786,136 300,000 830,839 300,000 827,248
TN.......................... 244,800 280,701 223,111 336,162 240,000 378,232
TX.......................... 2,290,752 5,564,171 2,287,820 5,205,424 2,312,245 5,210,498
UT.......................... 996,992 840,175 962,067 764,823 979,841 707,445
VT.......................... 61,594 39,710 50,000 30,566 60,450 40,718
VA.......................... 168,400 179,034 222,210 124,386 161,500 97,245
WA/Guam..................... 588,637 2,230,392 566,183 2,064,108 520,233 1,321,090
WV.......................... 89,700 120,582 97,387 93,156 88,000 90,928
WI.......................... 525,500 951,596 525,500 904,144 518,000 855,865
WY.......................... 1,006,781 471,136 971,317 427,924 978,576 584,461
-----------------------------------------------------------------------------------
Total................. 19,773,578 23,927,384 19,523,481 22,098,909 19,149,767 19,936,064
----------------------------------------------------------------------------------------------------------------
Question. It is my understanding that in some states, such as
Wisconsin, the cooperators have actually funded more than 50 percent of
the ADC field operation costs. Does your budget request for ADC reflect
the increased federal funding that will be needed in states like
Wisconsin, if USDA-ADC were to commit to funding a full 50 percent of
the ADC field operation costs?
Answer. The fiscal year 1998 budget request proposes that APHIS
provide no more than 50 percent of the total cooperative animal damage
control operations costs in each State. As Wisconsin is one of the
States in which cooperative funding exceeds federal contributions,
APHIS would make no adjustment to the amount of federal contributions
in this State.
______
Questions Submitted by Senator Leahy
vermont inspection stations
In 1996 APHIS indicated its intention to close the Animal
Inspection Station in Derby Line, one of two animal inspection stations
in Vermont. This closure would have disrupted established routes of
livestock trade with Canada for a minimal savings to the agency since
the Derby Line office does not have its own full time staff. To
compound the problem, the other inspection station in Highgate, where
APHIS planned to consolidate its operation, is in the midst of a major
upgrade resulting in significant construction activity at the site. The
fiscal year 1997 Agriculture Appropriations bill included language
requiring APHIS to continue operation of the Derby Line inspection
station.
Question. What is the current operating status of the Derby Line
animal inspection facility? What are the Department's most recent plans
for the future of the Derby Line and Highgate stations? (Please include
budget and time-line information.)
Answer. At this time, APHIS continues to operate the Derby Line
animal inspection facility for livestock inspection services. The
Committee directed that the Derby June Facility remain open until work
at the Highgate is complete. We intend to comply with the report
language.
We plan to close the Derby Line livestock inspection facility on
September 1, 1997. The new livestock inspection facility, currently
under construction at Highgate should be completed by July 1997. On
September 1, 1997, complete and full time livestock inspection services
will be offered at Highgate. Operating one full-time livestock
inspection facility at Highgate will provide users with dependable
access to livestock inspection services during normal business hours.
The Department will save about $35,000 annually through decreased
rental and operating costs.
asian long-horned beetle
The recently discovered Asian long-horned beetle infestations in
Brooklyn and Amityville, New York have created a great deal of concern
in Vermont and other Northeastern states. Some reports indicate that
other areas may have been exposed to the beetle through shipment of
logs to other parts of New York and Montreal. Given that the beetle has
no natural enemies and attacks mostly Norway and sugar maples, I am
greatly concerned that the spread of this insect into forested areas of
New York, Vermont and Massachusetts could threaten the important maple
sugar and fall foliage industries of the Northeast. The sugar maple is
one of the most valuable trees in New England. The sap produces maple
syrup; the wood is highly prized for furniture, paneling and wood
flooring; and the leaves provide an important attraction for tourists
in the autumn. It is my understanding that the Animal and Plant Health
Inspection Service (APHIS) has been working with the New York
Department of Agriculture and Markets to develop and implement an
eradication plan.
Question. What activities has APHIS undertaken to eliminate the
beetle and what activities are planned under the fiscal year 1998
budget?
Answer. In October 1996, we released $694,000 from our contingency
fund to conduct an Asian long-horned beetle (ALB) eradication program.
We are working with the USDA Forest Service and officials of State,
county, and city agencies in New York State (NYS). The program consists
primarily of tree removal, but it also includes detection and
delimiting surveys and intensified extension/education efforts in NYS.
Tree removal is nearing completion and the program will have removed
all known infected trees by April 1, 1997. This will eliminate the next
generation of ALB. Our role in tree removal involves oversight to
assure that the trees are properly handled, processed, and disposed. If
we discover additional infestations, eradication activities will
continue beyond April 1. Surveys will be conducted annually for two
years beginning in May 1997 in Long Island and Manhattan. Also, we will
conduct intensive surveys annually for five years within the regulated
areas (the Greenpoint area in Brooklyn and Amityville, Long Island). No
ALB activities are included in our fiscal year 1998 budget since this
problem surfaced after we submitted our budget. However, we must
consider using miscellaneous plant pest funds or using contingency
funds to continue the program in fiscal year 1998.
Question. What changes may be necessary in inspection practices to
insure that another Asian long-horned beetle infestation does not
occur?
Answer. To identify risks and prevent future introductions of ALB,
we have published and distributed Pest Alerts and other bulletins to
our inspectors. For example, on October 11, 1996 and again on March 14,
1997, we distributed a pest alert on ALB and its establishment in New
York. This alert informed our inspectors about actions we can take and
are taking at ports-of-entry to prevent additional introductions of the
ALB and related pests. In addition, we recently distributed a Port
Alert to our inspectors to inform them of potential pathways for the
ALB and its relatives to help prevent further introductions like that
on Long Island, New York. Until recently, our inspectors did not
identify longhorned beetle larvae from Asia to genus Anoplophora. They
now are able to recognize these larvae as being ALB larvae and can more
accurately track cargo pathways that may introduce ALB. Also through
these alerts, we continually advise our inspectors of policy changes
regarding criteria for inspections and interceptions and provide
information on the APHIS World Wide Web home page that would help them
prevent future introductions. The log and lumber regulations that took
effect in August 1995 and post-date the introduction of the Asian long-
horned beetle (ALB) prohibit the importation of untreated fresh (green)
lumber pallets. Untreated lumber is more likely to harbor the ALB that
treated lumber or older, used lumber. In the meantime, we have
intensified our efforts to monitor cargo from the Far East, the ALB's
region of origin. The combination of these mitigation measures should
provide adequate assurance that another ALB infestation does not occur.
Question. What steps has APHIS taken to identify potential exposure
risks from other non-native pests that could be transported into
eastern ports, and what steps is the agency taking to prevent that from
happening?
Answer. Besides the ALB Pest Alerts and our enforcement of the log
and lumber regulations, we began redefining several aspects of our
entire plant pest and disease exclusion program in fiscal year 1996.
This new focus has enabled us to concentrate on risk evaluation, new
monitoring techniques, and continuous reviews of our practices. For
example, we greatly expanded our commodity smuggling interdiction
program in fiscal year 1996. This program, which is designed to prevent
the smuggling of prohibited Oriental agricultural products, is now
being conducted nationwide. Through our AQI results monitoring program,
which we have initiated at almost all ports of entry nationwide, we
evaluate the effectiveness of our inspections regarding plant pest and
disease interceptions. Our statistical sampling and analysis enables us
to predict how effective we are at preventing the introduction of
harmful agricultural plant pests and diseases. In addition, we are
continuing to enhance technology through the development of enhanced x-
ray systems, photographic imaging, and the dissemination of actionable
interceptions and improved automation capability. Also, we have
instituted uniform staffing guidelines at all ports-of-entry nationwide
and have evaluated assigned shift coverages to ensure that our
inspectors are always available during peak activity, when there is the
greatest risk of an introduction.
animal damage control
The President's fiscal year 1998 budget request for the Animal
Damage Control program represents a $3.2 million decrease in funding.
The Department proposes to provide no more than 50 percent of the total
program support for each State. In Vermont, the Rabies Hotline program
has consistently provided an important service to Vermont farmers at
relatively small cost.
Question. How will this program be affected by this funding
decrease to the Animal Damage Control program? What other programs in
Vermont may be affected by this new policy?
Answer. As Vermont currently is one of the States in which Federal
contributions exceed those of cooperators Federal funding for animal
damage control efforts in Vermont could be reduced as a result of the
budget request. However, the 50 percent requirement applies to total
State funds, not to individual projects, which allows states some
flexibility. The Vermont office would be maintained to provide
continued advice on task forces for rabies management efforts, but the
toll-free rabies hotline would be discontinued unless cooperator
funding were increased to support it.
______
Question Submitted by Senator Boxer
hass avocados
Question. In your announcement regarding the publication of the
final rule allowing the importation of fresh Hass avocados into the
Northeastern United States, you stressed that it is important to
understand that the rule provides only an opportunity for Michoacan
producers to qualify to export their product.
It is my understanding that no imports will be authorized until
APHIS-supervised surveys prove that each orchard meets the pest status
requirements specified in the rule before being certified for export.
In order to address my long standing concerns about the
phytosanitary risks of importing Mexican avocados, I make the following
requests: (1) Before Mexican orchards are certified for export, you
provide representatives of the California Avocado Commission full
access to all pest survey data; (2) You provide California avocado
growers with an opportunity to review and comment on the protocol that
is being prepared by APHIS to implement the rule; (3) APHIS provide the
Committee with a monthly status report on the implementation of the
rule, including an assessment of the pest survey findings, and the
orchard certification process.
Answer. The pest survey data that ensures freedom of pests of
certified orchards and municipalities can be made available to anyone,
including the California Avocado Commission, prior to the shipping
season. The work plan is the protocol that will be used to implement
the rule. The work plan includes each party's responsibilities.
Interested parties will be provided an opportunity to comment on the
proposed protocol that is being prepared to implement the rule through
meetings being planned for early spring with the United States North
American Plant Protection Organization Industry Advisory Group. We will
be glad to work with your office to establish a reasonable way of
providing information on survey findings.
______
Grain Inspection, Packers and Stockyards Administration
Questions Submitted by Senator Cochran
market competition/concentration
Question. What activities are being funded with the $400,000
provided for fiscal year 1997 to carry out the recommendations of the
Agricultural Concentration Committee?
Answer. Two specific projects were added to our fiscal year 1997
operating plans as a result of the additional $400,000 received to
carry out recommendations of the Agricultural Concentration Committee:
--An investigation of the lamb slaughter industry, which will include
an extensive examination of slaughter lamb procurement
practices, with an emphasis on evaluating competition and
contracting arrangements.
--Followup analysis on the effects of captive supplies. Specifically,
additional economic and statistical analyses will be conducted
on the effects of forward contracting, packer feeding, and
marketing agreement/formula pricing arrangements using data
from the Kansas 1995 and the current Texas Feeder Cattle
Procurement investigations.
Question. Out of the additional $10 million released by the
Secretary from the Fund for Rural America for research, extension, and
education to counter concentration, food safety, nutrition, and
gleaning, what amount will be allocated to counter concentration and
what specific activities will be funded?
Answer. Grain Inspection, Packers and Stockyards Administration
(GIPSA) has submitted three research projects for consideration,
dealing with certain areas such as: Economic Analysis of Poultry
Integration; Vertical Coordination in Hog Production and Marketing; and
Line-of-Business Reporting.
Question. Increased funding is requested for fiscal year 1998 to
carry out the recommendations of the Advisory Committee on
Concentration--$500,000 for the Agricultural Marketing Service (AMS) to
expand its reporting of livestock and poultry markets; and $2.3 million
for the Grain Inspection, Packers and Stockyards Administration (GIPSA)
to address packer competition and industry structure and poultry
compliance. Please summarize the need for these additional funds and
what activities will be carried out.
Answer. The additional funds requested for fiscal year 1998 are
needed for GIPSA to more aggressively pursue anticompetitive practices
related to industry concentration. We have increased the frequency of
anticompetitive investigations during the past two years. But this has
come at the direct expense of programs designed to protect individual
producers from unfair practices and provide financial protection. The
additional funds will be used to recruit and integrate more economic,
statistical, and legal expertise into investigative units that will
conduct investigations involving anticompetitive practices, but not at
the expense of our other vital enforcement responsibilities. In fiscal
year 1998 we will conduct major anticompetitive practice investigations
and detailed analyses in the slaughter steer and heifer, slaughter hog
and slaughter cow industries and develop detailed evidence where
incidences of anticompetitive practices are disclosed. Additional
personnel with economic, statistical, and legal expertise will be
critical to completing this work.
The additional funds requested for poultry compliance are necessary
if the Agency is to initiate and perform more in-depth compliance
investigations, rather than respond to complaints as they are received,
as is the case today. These additional funds would allow the Agency to
increase the number and expand the scope of compliance investigations,
while at the same time continue investigating the increasing number of
complaints being received from poultry growers.
Note: The Agricultural Marketing Service (AMS) response is shown
under AMS.
Question. Please provide for the record, by fiscal year, the funds
provided for fiscal year 1997 and proposed for fiscal year 1998 to
carry out each of the recommendations of the Committee on Concentration
and/or to address agricultural market concentration or livestock
pricing. What additional funding will be required in future fiscal
years to carry out the Committee's recommendations?
Answer. The Committee on Concentration proposed 55 recommendations.
GIPSA's additional funding request focuses on four specific
recommendations as follows:
------------------------------------------------------------------------
Fiscal year--
---------------------------
1997 1998
------------------------------------------------------------------------
1. Antitrust enforcement of current
regulations under the Packers and
Stockyards (P&S) Act should be stepped up.. $100,000 $1,000,000
2. Section 202 of the P&S Act, which deals
with unfair trade practices, should be
enforced to the letter of the law.......... ............ 1,000,000
3. Congress should appropriate sufficient
resources to allow aggressive pursuit of
violations of the P&S Act and address
problems in their incipi- ency............ ............ 300,000
4. GIPSA should investigate lamb supply
contracts for their impact on markets and
market access for participants without a
supply contract............................ 300,000 ............
---------------------------
Total................................. 400,000 2,300,000
------------------------------------------------------------------------
dealer trust
Question. The Administration again proposes legislation to amend
the Packers and Stockyards Act to provide for a statutory ``dealer
trust.'' The explanatory notes indicate that this legislative proposal,
if adopted, would provide one-time start-up costs of $3 million to
convert to license fee status. Would this be a mandatory direct funding
requirement or an increased appropriations requirement, and how does
the Administration propose to offset this additional one-time cost?
Answer. If the Packers and Stockyards Act is amended to provide for
a statutory ``dealer trust'' no start-up funding is requested by the
Agency, since such a ``trust'' would only be triggered when a dealer
failed to pay for livestock purchases.
The explanatory notes referring to the $3 million one-time start-up
cost refer to the proposed license fee legislation rather than the
dealer trust. There will be start-up costs associated with implementing
the proposed license fees. The principal costs will be the funds needed
to maintain ongoing operations during a transition period that will be
required to promulgate the necessary implementing regulations and begin
collecting the license fees. It would also fund the leave liability
accumulated under the appropriated program. Without appropriated
funding, these costs would become an immediate liability to the users.
This would be a one-time increase in appropriations.
______
Questions Submitted by Senator Burns
livestock marketing
Question. Jim, I would like to thank you for taking time out of
your busy schedule several times during the past year to come out to
Montana and discuss what it is your agency is doing to protect the
individual livestock producer in today's market. I know you have made
an impact and have developed some good friendships that will go a long
way in developing confidence in GIPSA and the work you are doing.
Mr. Baker, talking real numbers and real dollars could you please
explain what it is that you need to do to make sure that there is
confidence by the producers in the next round of marketing in the
livestock market?
Answer. GIPSA has requested an increase of $1,595,000 for packer
competition and industry structure issues for fiscal year 1998. The
additional funds are needed for GIPSA to more aggressively pursue
anticompetitive practices related to industry concentration. We have
increased the frequency of anticompetitive investigations during the
past two years. But this has come at the direct expense of programs
designed to protect individual producers from unfair practices and
provide financial protection. The additional funds will be used to
recruit and integrate more economic, statistical, and legal expertise
into investigative units that will conduct investigations involving
anticompetitive practices. In fiscal year 1998 we will conduct major
investigations of anticompetitive practices and detailed analyses in
the slaughter steer and heifer, slaughter hog and slaughter cow
industries and develop detailed evidence where incidences of
anticompetitive practices are disclosed. Additional personnel with
economic, statistical, and legal expertise will be critical to
completing this work.
Question. Could you provide the committee with a brief overview of
the actions that have been completed in the past year to make sure that
the packers are not taking advantage of the marketplace on livestock?
What is it that this committee and Congress can do to assist you in the
completion of this task?
Answer. During fiscal year 1996, GIPSA concentrated resources on
providing financial protection and promoting fair business practices
and a competitive marketing environment for livestock, meat, and
poultry. The Agency conducted over 2,000 investigations, disclosing
over 800 violations of the P&S Act. Formal actions were requested in 84
cases and 62 administrative or justice complaints were issued in order
to bring firms into compliance with the P&S Act. Administrative
decisions and orders were issued in 49 cases during fiscal year 1996;
however, most violations were corrected on a voluntary basis with
several resulting in livestock and poultry producers receiving
additional funds for the sale of their product. In addition, four major
investigations are currently underway dealing with cattle procurement
in the Texas Panhandle; slaughter hog procurement in the central United
States; poultry settlements in several states; and lamb procurement.
Providing the additional funds that we need is the best action that the
committee and Congress can do to assist us.
The Packers and Stockyards Programs budget for fiscal year 1998
proposes $14.8 million, which includes increases of $225,000 to allow
GIPSA to establish electronic filing procedures for reports; $1,595,000
for activities in the packer competition and industry structure areas;
and $750,000 for poultry compliance activities. These funds are
essential for the Agency to meet its responsibility of fostering fair
and open competition, and guard against deceptive and fraudulent
practices that affect the livestock, meat, and poultry industries.
canadian grain
Question. Mr. Baker, we are beginning to hear rumblings in northern
Montana border towns about the amount of feed grain that is being
imported into Montana grain bins that are not of a quality that is
equal to that which is being marketed by Montana producers. This same
wheat then is being mixed and sold as Montana quality grain, and yet
carries a large amount of substandard Canadian grain in that same load.
Would you like to comment on this and if you are not prepared would you
please take some time to look into this and find out what the situation
is and report back to me and the committee?
Answer. Under the current NAFTA agreement and the U.S. Grain
Standards Act, grain is allowed to move freely between Canada and the
U.S. with official inspection occurring only at the buyer/seller's
request. Canadian grain entering a U.S. grain elevator is not required
to be identified or binned separately from U.S. grain. Further, the
U.S. Grain Standards Act prohibits the blending of dockage and foreign
material to grain but does not prohibit the blending of different
qualities of grain. Consequently, any grain shipped from Montana
elevators is graded based on its kind, class, quality, and condition as
it relates to the official grain standards. The origin of the grain is
not relevant to the inspection process when assessing quality.
Subcommittee Recess
Senator Cochran. This concludes today's hearing. Our next
hearing will be on Tuesday, March 11, in this room, 124, of the
Dirksen Senate Office Building at 10 a.m. We will hear at that
time from Department witnesses on the requests for food and
nutrition programs. Until then, the committee stands in recess.
[Whereupon, at 11:52 a.m., Tuesday, March 4, the
subcommittee was recessed, to reconvene at 10:05 a.m., Tuesday,
March 11.]
AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR
FISCAL YEAR 1998
----------
TUESDAY, MARCH 11, 1997
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:05 a.m., in room SD-124, Dirksen
Senate Office Building, Hon. Thad Cochran (chairman) presiding.
Present: Senators Cochran, Bumpers, and Leahy
DEPARTMENT OF AGRICULTURE
STATEMENT OF MARY ANN KEEFFE, ACTING UNDER SECRETARY,
FOOD, NUTRITION, AND CONSUMER SERVICES
ACCOMPANIED BY:
DENNIS KAPLAN, DEPUTY DIRECTOR, OFFICE OF BUDGET AND PROGRAM
ANALYSIS, DEPARTMENT OF AGRICULTURE
YVETTE JACKSON, DEPUTY ADMINISTRATOR, FOOD STAMP PROGRAM
Food and Consumer Service
STATEMENT OF WILLIAM E. LUDWIG, ADMINISTRATOR
ACCOMPANIED BY GEORGE A. BRALEY, ASSOCIATE ADMINISTRATOR
Center for Nutrition Policy and Promotion
STATEMENT OF EILEEN KENNEDY, EXECUTIVE DIRECTOR
Opening Remarks
Senator Cochran. The meeting of the Agriculture
Appropriations Subcommittee will please come to order.
Today we are continuing our review of the President's
budget request for Agriculture, Rural Development, and Related
Agencies. This morning we will specifically review the request
for programs and activities of the Department of Agriculture's
Food and Consumer Service.
Our witnesses this morning include Mary Ann Keeffe, who is
Acting Under Secretary for Food, Nutrition, and Consumer
Services.
We also have with us the Administrator of the Food and
Consumer Service, William Ludwig; George Braley, Associate
Administrator, Food and Consumer Service; and Dennis Kaplan,
Budget Officer with the Department of Agriculture's Office of
Budget and Program Analysis.
We welcome you, Ms. Keeffe, and invite you to proceed to
make whatever comments or remarks you choose regarding this
budget request. You may proceed.
Statement of Mary Ann Keeffe
Ms. Keeffe. Thank you very much, Mr. Chairman. It is my
pleasure to be here this morning before the committee. As you
know, in my role as the Acting Under Secretary for Food,
Nutrition, and Consumer Services, I have responsibility for the
Nation's food assistance programs.
In addition to those that you mentioned, Mr. Chairman, also
accompanying me today is Ms. Yvette S. Jackson, the Deputy
Administrator for the Food Stamp Program.
Senator Cochran. Ms. Jackson, we welcome you, and thank you
for your being here.
Ms. Keeffe. Mr. Chairman, I am speaking to you at a time of
historic change in the manner in which Government operates.
This administration came into office 4 years ago with a number
of goals for our nutrition programs.
Children's Nutrition
These goals included improving the nutrition and health of
children by updating the nutrition standards of the School
Lunch and Breakfast Programs, making benefits available for all
who qualify and wish to participate in the Special Supplemental
Nutrition Program for Women, Infants, and Children, reinventing
Government by working in partnership with the States to
increase program efficiency and reduce abuse, implementing
antifraud legislation to increase Food Stamp Program integrity,
and ending welfare as we know it by replacing it with a system
that offers hope, demands responsibility, and rewards work. We
have been quite successful in meeting these goals.
Our 16 nutrition assistance programs, which include the
Food Stamp Program, Child Nutrition, WIC, Commodity Programs,
Nutrition Education and Training, and our Center for Nutrition
Policy and Promotion, work individually and in concert with one
another to alleviate food insecurity, promote healthier diets
for children and low-income adults, and improve nutritional
knowledge among all Americans.
Taken together, these programs provide a vitally important
nutrition safety net for Americans.
Mr. Chairman, in recognition of your committee's level of
interest in our budget request for this year, I would like to
explain briefly the request in a couple of areas.
For the Special Supplemental Nutrition Program for Women,
Infants, and Children, the President's budget includes both a
supplemental request in fiscal year 1997 to maintain
participation at current levels and for fiscal year 1998,
adequate funds to meet the goal of fully funding the WIC
Program.
WIC Supplemental
The fiscal year 1997 $100 million supplemental request is
needed to avoid a dramatic reduction in participation this
year. We estimate that the current fiscal year 1997
appropriation will support average monthly participation of 7.2
million persons.
Participation was well over 7.4 million at the end of last
year and has remained at approximately that level through the
first quarter of fiscal year 1997. This implies that, in the
absence of additional funds, participation will have to fall to
about 7 million by September of this year, which would mean a
reduction of over 400,000 mothers and children.
Our budget request assumes that unspent funds of
approximately $100 million will be carried over from fiscal
year 1997 to fiscal year 1998.
WIC Carryover
We believe that a structural carryover of this level, which
is about 2.5 percent, does not suggest poor program management,
but is inherent to the prudent management of the WIC Program.
The fiscal year 1998 request of $4.1 billion would allow us
to achieve our longstanding bipartisan goal of fully funding
the WIC Program at 7.5 million participants. This represents a
modest expansion from the current participation level of 7.4 to
7.5 million by the yearend fiscal 1998. While the economy has
improved in the years since this goal was first established,
this funding target is still well below the current estimated
WIC-eligible population of 9.2 million persons.
The WIC Program has sought and achieved high participation
rates; and we believe it is critical to preserve these
achievements. The fiscal year 1998 request is $378 million
above the current fiscal 1997 level. However, only a small
fraction of those funds, about $30 million, are for increased
participation.
The majority of the increase reflects the inflation-
adjusted level needed to support the current 7.4 million
participants. And the request also includes a $100 million
contingency fund, which would be used only if food costs are
significantly higher than expected.
I would also like to mention that both the fiscal year 1998
request and the supplemental include appropriations language
that would provide USDA greater discretion in distributing
funds among States. This discretion is needed to minimize
participation disruptions this year and to ensure that States
are funded at levels consistent with their needs as the program
enters a period of greater funding stability.
Mr. Chairman, I thank you and the members of this
subcommittee for your continued support of these important
programs. With your support, we have had remarkable success in
alleviating hunger and promoting healthier diets. We have made
dramatic changes.
Mr. Chairman, I, along with the Administrator, Mr. Ludwig,
and the Director of the Center for Nutrition Policy and
Promotion, have submitted detailed testimony for the record.
My colleagues and I will be happy to answer any questions.
Prepared Statements
Senator Cochran. Thank you very much, Ms. Keeffe. Your
statements will be included in the record in full. And we thank
you for your cooperation and assistance to our committee.
[The statements follow:]
Prepared Statement of Mary Ann Keeffe
Mr. Chairman, Members of the Subcommittee, it is my pleasure to
appear before you to discuss the President's fiscal year 1998 Budget
Request for USDA's Food and Nutrition Programs. As you know, I am the
acting Under Secretary for Food, Nutrition, and Consumer Services
(FNCS), responsible for the Nation's domestic food assistance programs
which provide access to a more nutritious diet for persons with low
incomes and which encourage better eating choices among the Nation's
children and their families. These programs include the anchor programs
of Food Stamps, Child Nutrition and the Supplemental Nutrition Program
for Women, Infants and Children (WIC). I am accompanied by William
Ludwig, the Administrator of the Food and Consumer Service, George
Braley, the Associate Administrator of the Food and Consumer Service,
and Dennis Kaplan from the Department's Office of Budget and Program
Analysis.
I am speaking to you at a time of historic change in the manner in
which government operates. This Administration came into office four
years ago with a number of goals for our nutrition programs. Those
goals included improving the nutrition and health of children by
reforming the 50 year old School Lunch and School Breakfast Programs
and making benefits from the Special Supplemental Nutrition Program for
Women, Infants, and Children (WIC) available for all who qualify and
wish to participate. We also set about reinventing government by
working in partnership with the States to increase program efficiency
and reduce abuse. We implemented anti-fraud legislation to increase
Food Stamp Program integrity. We ended welfare as we know it by
replacing it with a system that offers hope, demands responsibility and
rewards work. We have been quite successful in meeting these goals and
in fulfilling our dual missions of supporting the agriculture economy
and providing the nutrition safety net for low income Americans.
The mission of these programs is to improve the nutritional well-
being of children and low-income families by helping them to make
healthful food choices and provide access to nutritious foods for the
people who need it. Our Nutrition Assistance Programs work both
individually and in concert with one another to alleviate food
insecurity and promote healthier diets for children and low-income
adults and improve nutritional knowledge among all Americans. Taken
together, these programs provide a nutrition safety net for low-income
Americans. During the last four years FCS, together with this
subcommittee, has made dramatic changes to these programs and achieved
great results. Let me take a few moments to share some of our many
accomplishments.
food stamp program
The Food Stamp Program, the cornerstone of our Nutrition Assistance
Programs expands and contracts with human need. In March 1994, the
program served a historic number of low-income persons, 28 million in
fact. Since then primarily due to economic improvements, it has
contracted and is reaching over 10 million families--24 million people.
However, when the President signed into law the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996, he
stated that some provisions must be readdressed in the future because
they led to unwarranted harm to some families.
Our food stamp legislative proposals included in the President's
fiscal year 1998 Budget address those concerns within the fiscal
constraints of balancing the budget by fiscal year 2002. The proposals
will increase the vehicle fair market value exclusion for fiscal year
1998 and begin indexing in fiscal year 1999. The proposals will impose
a new tough but fair work requirement and disqualification penalty on
those unemployed adults with no children who can work but refuse work;
eliminate ineligibility of unemployed adults with no children who are
willing to work but cannot find work and are not offered work
opportunities by the private sector or the States because of high
unemployment or lack of jobs in the area; provide additional funding to
States to increase the availability of employment and training
opportunities for unemployed adults with no children; and expand the
State option for using food stamp benefits as a wage supplement to
include participation by unemployed adults with no children.
Additionally, we propose some changes limited to fiscal year 1997 for
implementing the ban on food stamp receipt by current legal immigrant
participants. Such changes will provide an extended opportunity for
legal immigrants who are current food stamp participants to pursue and
attain citizenship. By fiscal year 2002, our proposals will eliminate
the cap on the excess shelter expense deduction to help families with
children and high shelter expenses, and index the standard deduction.
Early in the Clinton Administration, we established six key
principles for reforming the program: ensure economic responsiveness,
provide for nutrition security, improve program integrity, modernize
benefit delivery, expand State flexibility, and promote personal
responsibility. These six principles formed the framework of not only
administrative actions we have taken but also the major legislation
proposed by the Administration in 1995 and 1996 that ultimately led to
reform. They continue to guide our actions today.
Ensuring economic responsiveness and providing for nutrition
security, our first two principles, are the aspects of the Food Stamp
Program that distinguishes it from other Federal assistance programs.
Welfare Reform assured the continued ability of the program to expand
automatically to meet increased need when the economy is in recession
and contract when the economy is growing. Food stamp benefits will
continue to flow to eligible families in communities that face rising
unemployment and poverty, cushioning the harsher effects of economic
recession and stimulating weakening economies. Caseload reduction over
the past 2\1/2\ years demonstrates this important aspect of the Food
Stamp Program. For 30 years, the Food Stamp Program has been our pledge
to ``safeguard the health and well-being of the Nation's population by
raising levels of nutrition among low-income households.'' Fulfilling
this pledge means more than providing food. It means providing
nutrition information and education, which is critical to improving the
quality of diets, improving health, and reducing health care costs.
In our continuing effort to improve the health of all Americans
through better knowledge of good nutrition, we have encouraged States
to develop nutrition education and promotion programs, matching the
money spent as part of the administrative cost of operating the
program. In fiscal year 1996, 38 States had approved Food Stamp
Nutrition Education Plans; up from just a handful of States 3 years
ago. The Federal share of funding for these plans was $20 million.
Program Integrity
Improving program integrity is our third principle. Two years ago,
we proposed a comprehensive 13-point, anti-fraud legislative program
for food stamps that attacked retailer trafficking, strengthened
reauthorization controls, and allowed for stiffer penalties. Congress
adopted, in some form, all of the Administration's proposals. Welfare
reform legislation also included several provisions directed toward
recipients who violate program regulations. These provisions include
doubled penalties, expanded claims collections procedures, and
prohibitions against households receiving increased food stamp benefits
in response to lower income because they are being penalized for
failure to comply with the rules of welfare programs.
At the same time, we have reduced food stamp error rates. We have
worked hard with the States and for the last two years error rates have
fallen. The reduced error rates have prevented the loss of nearly $350
million in erroneous payments in just two years, and we will continue
with this work.
We are aggressively and unceasingly fighting food stamp fraud.
Fraud in the Food Stamp Program or any program cannot and will not be
tolerated. We have a responsibility to ensure that food stamp benefits
are issued properly and accurately and are used for purchasing food.
Preventing fraud is critical to ensure program integrity and to ensure
that the program gets food to people who need it.
We are increasing our ability to visit food stores in person, by
using the fiscal year 1997 appropriation of $4.2 million to contract
with vendors to procure documented observations of new applicant stores
as well as those requesting to continue to participate in the program.
This information is being used by our field offices to confirm
applicant-supplied information, particularly that the store is in the
business of selling an ample variety of staple food for home
preparation and consumption.
We have coupled these achievements with our ongoing food stamp
investigative efforts to ensure recipient access to food stores while
limiting the program's vulnerability to fraud, especially trafficking.
The use of intensive ``sweeps'' of many vendors has helped us
identify the problem stores; and, just as important, it gets the
message out to the public and to retailers that those who commit fraud
will be caught. In the past calendar year we have conducted two such
operations, ``Trident'' and ``Five Points''. With FCS investigative
resources alone, 734 stores were caught violating, 201 of which were
caught trafficking. These operations took a combined total of 6 weeks.
The media coverage will help provide a deterrent to other retailers
from violating program rules. Also, the dollar amount of violation
activity addressed through these operations was significant. The
violating stores redeemed $50 million in food stamp benefits the
previous year.
We have continued to expand the Federal Tax Refund Offset Program
(FTROP) to a total of 43 States and have added a Federal salary offset
component. FTROP began as a pilot in 1992. Since that time, we have
collected more than $110 million which is returned to the Treasury. We
expect this program to continue to grow until all States are
participating.
We are modernizing benefit delivery, our fourth principle. Today,
every State is planning for Electronic Benefit Transfer (EBT)
implementation. We have progressed from just six operational sites in
1993 to eighteen today. By the end of this month, eight States will
have Statewide systems. Approximately, 16 percent of all food stamp
issuance now occurs through EBT. By the end of fiscal year 1998 we
anticipate that about 40 States, representing 55 percent of all food
stamp assistance, will have EBT in operation.
Expanding State flexibility, our fifth principle, is important
because being responsive to the needs of our State partners helps
assure their continued effective administration of the Food Stamp
Program. The Administration's proposed food stamp reform legislation
included provisions striking non-essential proscriptive, statutory
requirements governing States' administrative practices. The proposed
legislation also included authority for States to operate Simplified
Food Stamp Programs for their welfare caseload. These legislative
proposals, which were included in welfare reform legislation, were the
second half of an earlier and on-going effort to review regulatory
requirements and wipe unnecessary ones from the books.
Our sixth principle is promoting personal responsibility. The
Administration proposed strong penalties for noncompliance with the
program's work requirements and State options to require individuals to
cooperate with the Child Support Enforcement program and to meet their
obligations to support their children. These improvements were included
in welfare reform.
As you can see Mr. Chairman, we have worked hard to reform the Food
Stamp Program by retaining the National nutritional safety net, by
establishing strong working partnerships with States, by improving
program integrity, by expanding EBT, and by promoting personal
responsibility.
child nutrition programs
The Administration has identified the Child Nutrition Programs as
critical to fulfilling our national health responsibility. Through the
National School Lunch Program, the School Breakfast Program, the Summer
Food Service Program, the Child and Adult Care Food Program, and the
Special Milk Program, FCS assists State and local governments in
providing meals to children in a wide range of settings, including
public and private schools, child care centers and homes, and summer
recreation programs.
The Administration's fiscal year 1998 budget request seeks reduced
funding for the Child and Adult Care Food Program (CACFP) when compared
to prior year requests. The primary reason for this change is the
method of making reimbursement payments to family day care homes
contained in Public Law 104-193, the welfare reform legislation enacted
on August 22, 1996. Public Law 104-193 replaced the former single
payment rate method with a two-tiered reimbursement structure for
family day care home reimbursement payments. As provided for in the
statute, this new payment structure will be implemented effective July
1, 1997. The budget has been restructured accordingly.
As you know, we have taken a major step toward meeting our health
responsibility through implementing the first full-scale reform of the
National School Lunch Program in fifty years. USDA research showed that
school meals--and children's diets overall--are too high in fat,
saturated fat and sodium. This finding is extremely significant in
light of scientific research that establishes the link between these
dietary excesses and chronic diseases. We know that obesity, high
cholesterol and high blood pressure are diet-related conditions that
often begin in childhood. When we began the School Meals Initiative for
Healthy Children, studies told us that 9 out of 10 children ate too
much fat, too much saturated fat and 30 percent of children ate less
than one serving of fruit a day. The effects on their future and on
society would be devastating if we did not take action. Diet is
associated with 5 out of the 10 leading causes of death in this
country, including heart disease, and some cancers. Nutrition-related
diseases cost society an estimated $250 billion a year in medical care
and lost productivity.
The School Meals Initiative for Healthy Children updates the
nutrition standards for school meals to be consistent with the Dietary
Guidelines for Americans. This historic accomplishment means less fat,
less sodium--and more balance--in children's diets. It means a
potential improvement in children's health which will potentially have
a substantial impact on health care costs and years of life. Estimates
of value from similar dietary improvements for adults range from $4
billion to over $26 billion over 20 years due to improved life
expectancy and reduction in early deaths.
Let me emphasize, however, that we did not simply mandate change on
the school lunch plate and then walk away. We took several important
steps to support schools, families, and communities in achieving the
goal of healthier diets for our Nation's children. The Department
dramatically improved the quality and availability of USDA commodities
provided to local school districts. For example, reduced-fat peanut
butter and cheese were made available to schools, enabling children to
still enjoy food they like but in healthier forms.
Team Nutrition, launched in 1995, is a network of public/
partnerships designed to promote making food choices for a healthy
diet. It is based on the active involvement of over 200 National
nutrition, education, health, agriculture and industry supporters and
partners. Team Nutrition brings together stakeholders and builds
community coalitions to bring healthier school meals and state-of-the-
art training and technical assistance nutrition information to children
and their families. We already have 17,000 schools serving over 9.8
million children actively participating in Team Nutrition.
Team Nutrition has two major components--technical assistance and
training to support school food service personnel in providing
healthful meals, and nutrition education to enable children to make
food choices for a healthy diet. The technical assistance and training
component provides state-of-the art tools and techniques to improve
meals. The nutrition education component is a multi-faceted education
program. Team Nutrition uses research and science-based nutrition
messages that reach children in a language they understand, building
skills and motivating children to make food choices for a healthy diet.
These messages have been integrated into the classroom curricula for
elementary schools, materials for use wherever children live, learn,
and play, including the cafeteria, and at home, as well as into
nutrition education messages broadcast on National network media. For
example, we have distributed a Tool Kit for Healthy School Meals,
including a comprehensive set of new recipes, a training manual and a
marketing guide to every school participating in the National School
Lunch Program. All States and local school food service agencies have
received ``Serving it Safe,'' a training tool for food safety and
sanitation. A complete operational kit for Assisted NuMenus has been
provided for local schools; and food purchasing at schools has been
enhanced with a food specification reference guide called ``Choice
Plus''. We have provided National Healthy School Meals Training
Workshops to ``train the trainers'' in meal preparation, and we have
established on-line computer resources and information to support
schools in meeting nutrition standards. Through Team Nutrition, have
also provided over $6 million in Team Nutrition Grants to States to
assist in implementation of the School Meals Initiative and will award
another $4 million in grants in 1997. Grant projects have included
developing training programs for school food service personnel and a
cafeteria classroom link to support nutrition education and healthy
food choices. The National Food Service Management Institute is being
provided $800,000 for cooperative agreement work that includes an 800-
phone-number help desk and a ``Service on Site'' project. Both of these
efforts bring the services and expertise of the Institute to local food
service operations. This training has been very well received by the
school food service professionals.
With your support, Team Nutrition has accomplished much toward
helping schools to provide healthier meals and to become the focal
points for nutrition learning in their communities.
supplemental nutrition program for women, infants, and children (wic)
This Administration is committed to making WIC available to
eligible women, infants, and children who wish to participate in the
program. Mr. Chairman, I would like to express my sincere appreciation
for the support this subcommittee has provided the WIC Program.
The strong bipartisan support reflects a recognition of a program
that works and works well and is cost effective. WIC makes a positive
difference in the health status of low income women, infants and
children through the provision of supplemental food packages rich in
needed nutrients, nutrition education and counseling, and referrals to
local sources of health care. WIC also promotes breastfeeding as the
feeding method of choice, furnishes drug, tobacco, and alcohol abuse
information, and promotes immunization. Studies have documented that
participation in the WIC Program results in real improvement in the
health of participants, including fewer premature births, a lower
incidence of low birthweight, fewer infant deaths, increased likelihood
of receiving prenatal care, and improved children's diets.
In recent years, thanks to strong bipartisan support, WIC funding
has increased substantially from year to year. In addition, food
package cost containment efforts have succeeded in allowing
participation to increase substantially. Since the beginning of this
Administration, we have added over 1.7 million participants to the
program. Our current budget request would allow us to meet the long-
standing goal of providing funds to serve 7.5 million persons by the
end of fiscal year 1998.
The successful expansion of the WIC Program presents significant
management challenges. We fully recognize the need to manage the
transition from this period of rapid growth to one of more stable
funding and participation. Our budget request is an integral component
of our strategy for managing this transition without disruptive swings
in participation this year and the next. The supplemental we have
requested for fiscal year 1997 would allow for an orderly transition
from fiscal year 1997 to fiscal year 1998 by maintaining participation
at approximately current levels. Without the supplemental, we believe
States will have to reduce participation by several hundred thousand.
We are working with State agencies on better management reporting
which will lead to more timely and accurate data and improved systems
to forecast demand, needs and costs. FCS has requested that States
submit more comprehensive and timely spending and caseload management
plans for use in better forecasting of participation trends and in
making needed adjustments in caseload to manage within grant levels. We
are also working on integrity rules for vendors and studying the funds
allocation process to see if it can be made more responsive to need.
FCS will encourage cost control strategies for State use in
managing expenditures. Rebate strategies for foods other than just
infant formula, selection of food vendors with lower costs and history
of good program management, and the use of the most economically
allowable WIC foods will continue to be emphasized as major cost
containment techniques.
In times when resources cannot meet demand, benefits must be
targeted to those most in need. FCS plans to review policy and
regulatory requirements to insure more consistent eligibility
assessments and to refine States' techniques for effectively targeting
benefits.
We will continue to develop new and better strategies and tools to
ensure the continued success and effectiveness of the WIC Program, and
to guarantee that WIC continues to contribute actively and positively
to the preservation of the good health and well being of the Nation's
low income, at risk population of pregnant, breastfeeding and
postpartum women, infants and children.
commodity assistance programs
In fiscal year 1996, the Commodity Assistance Programs were
reconfigured to combine the Commodity Supplemental Food Program, The
Emergency Food Assistance Program and the Soup Kitchens and Food Banks
Program. FCS is committed to supporting the agricultural economy while
at the same time, providing a nutrition safety net for those most in
need. Our fiscal year 1998 request reflects continued support for our
commodity programs, including the use of funds made available through
the Food Stamp Program for purchasing commodities for distribution to
States under the Food Distribution Program on Indian Reservations and
the Emergency Food Assistance Program. This change further demonstrates
our commitment to streamlining the commodity programs and providing
States more flexibility. It also demonstrates our on-going efforts to
respond to and better serve the needs of our clients.
In addition, we provide commodities to those in need of as a result
of disaster situations. FCS is one of the first Federal agencies on the
scene to provide disaster relief.
The Administration also supports food recovery. Food recovery
allows us to share food resources that would otherwise be wasted. This
activity is accomplished mainly through volunteerism. For example,
TEFAP providers generally distribute large quantities of commodities
donated by the private sector. Although our budget request does not
specifically earmark funds for food recovery, TEFAP administrative
funds may be used for this purpose.
center for nutrition policy and promotion
USDA's Center for Nutrition Policy and Promotion (the Center) was
created on December 1, 1994, as part of the USDA reorganization. The
Center is a classic example of how a small amount of resources can be
leveraged to better serve the consumer. The best example of this was
the release of the Dietary Guidelines for Americans. Our Center led the
consumer research and co-chaired the interdepartmental work group with
the Department of Health and Human Services that produced this key
statement of Federal nutrition policy. This work showed how the Center
fulfilled its mission as the focal point within USDA for linking
scientific research to the consumer.
This year the Center is fulfilling its mission by completing a set
of highly significant products. It is reporting on the nutrient content
of the U.S. food supply--a key link in monitoring nutritional status in
the United States; it is updating the Healthy Eating Index--a
measurement of how well Americans are eating; and it is adapting the
Food Guide Pyramid specifically for children. The Center is also
positioning itself to launch, in fiscal year 1999, a National nutrition
promotion campaign stressing the many consumer-oriented benefits of
healthy eating.
research and evaluation
The three FCS research accounts are used to determine if policy
objectives are met; test innovations; and describe what works, what
does not work, and why. These accounts are instrumental in enabling the
Agency to respond to the oversight responsibilities of Congress and
have a proven track record of improved government performance. For
example, FCS research made critical contributions to the emergence and
expansion of Electronic Benefit Transfer, supporting the first
demonstrations of feasibility and cost-effectiveness; helped to fight
fraud and abuse and improve program operations, generating the first,
and only, data-based estimates of the prevalence of food stamp
trafficking and WIC overcharging practices; documented the Federal cost
savings associated with participation in the WIC program; and, provided
the foundation for historic changes in the school nutrition programs by
determining the nutrients available in the school lunch and breakfast
programs.
With the funding requested for fiscal year 1998, the Agency will be
able to support efforts to help States identify effective ways to
design programs using the new flexibility provided by welfare reform
and understand the consequences of change, continue critical updates of
basic program information; address fully Congressional questions about
the impact of legislative changes on family day care homes; and collect
and analyze data to provide Congress with outcome measures of program
performance.
The relatively small expenditures made on research will help to
protect the $40 billion investment made in the Federal nutrition
programs. Without such research support, we run the risk of making
crucial policy decisions without adequate knowledge of the
consequences.
food program administration (fpa)
The FPA appropriation funds most of the salaries and expenses of
the Food and Consumer Service, and is the critical account that ensures
the effective use of other program appropriations. Efforts of Agency
staff have resulted in progress toward improving the nutrition of
program participants, strengthening program integrity, and implementing
EBT Nationwide. These results were achieved despite staff reductions
which in 1995 enabled FCS to meet its fiscal year 2000 streamlining
target in accordance with the National Performance Review and the Vice
President's goal of reducing the Federal work force. In spite of
declining staff and overall systems resources, we have made significant
improvements to our financial management operations. Our efforts have
resulted in tighter controls over our financial resources and financial
statement preparation. We are pleased with our progress to date.
However, as a result of recent FPA funding reductions, FCS is now only
able to deploy staff from crisis to crisis, which is proving
insufficient for effective program administration.
Historically, the FPA account has been funded below the President's
request. The fiscal year 1998 administrative request is a ``bare
bones'' request. The Agency simply cannot sustain additional reduction
in staff or funding without seriously impairing its ability to provide
children and low-income families access to our Food Assistance Programs
and provide basic program integrity oversight. Mr. Chairman, our
administrative budget is less than one-third of one percent of total
FCS budget authority. Providing less funding than our request may place
billions of Federal dollars at risk to increased program fraud and
abuse. In fact, our ability to prevent as well as resolve problems
identified in the past by GAO depend in part on sufficient
administrative funding. The Food and Consumer Service, funded at the
requested level, will continue serving as a model for Federal
government efficiency.
conclusion
Mr. Chairman, I would like to take this opportunity to thank you
and members of this Subcommittee for your continued support of our
Nutrition Assistance Programs. With your support, we have had
remarkable success in alleviating hunger and promoting healthier diets
for children and low income families. We have made dramatic changes--
changes that will have a lasting effect on the recipients of our
programs. Our fiscal year 1998 request reflects our continued efforts
to provide a nutritional safety net for Americans and to provide
adequate oversight of these programs. This concludes my statement. The
testimony of William Ludwig, Administrator for the Food and Consumer
Service presents more of the technical aspects of our request.
Additional information on the Center will be provided by Eileen
Kennedy. I request that both statements be submitted for the record. I
will be happy to answer any questions that you may have.
______
Prepared Statement of William E. Ludwig
Mr. Chairman, thank you for the opportunity to appear before this
subcommittee to discuss the fiscal year 1998 budget request proposed
for the U. S. Department of Agriculture's Nutrition Assistance Programs
and the Food and Consumer Service (FCS). As the Administrator of FCS
for the last three years, I want to take the opportunity to point out
the exceptional performance of the agency during a period of
extraordinary change and diminishing resources. Just in the past year,
FCS has begun implementation of the historic changes effected by
Welfare Reform, significantly improved its financial management and
continued the expansion of the School Meals Initiative for Healthy
Children. During this time, EBT has grown from a small experiment to
the method for Food Stamp Benefit issuance. All of these major efforts
have been accomplished with a declining staff, while many requirements,
such as those in financial management, have continued to increase. I
cannot say enough about the extraordinary efforts of the FCS staff
under these difficult circumstances.
budget request 1997 supplementals
I want to begin my testimony on the particulars of the President's
Budget request by discussing the need for supplemental appropriations
for fiscal year 1997 in the Women, Infants and Children (WIC) and
Nutrition Education and Training (NET) Programs.
A supplemental appropriation of $6.25 million is needed in Child
Nutrition to complete funding for NET. The cost of this supplemental is
fully offset by a one-time reduction in food stamp funding for
commodity purchases for The Emergency Food Assistance Program (TEFAP).
We have recently shifted $3.75 million from Team Nutrition to NET to
continue the program in fiscal year 1997 until you can act on our
supplemental request. The Appropriations Act for fiscal year 1997 did
not include funds for NET because the program was funded by a permanent
appropriation when the Appropriations Act was passed. The permanent
appropriation was repealed by the subsequent enactment of Welfare
Reform. We believe that it was an oversight that NET received no
funding in fiscal year 1997. We are pleased that we were able to
provide stop-gap funding to maintain the long-established network of
State NET coordinators until the Congress can act on our supplemental
request.
A supplemental appropriation of $100 million is needed for the WIC
program to assure that participation is maintained throughout fiscal
year 1997 at approximately 7.4 million, the fiscal year 1996 year-end
levels. Without the supplemental, WIC will experience a significant
reduction in participation during 1997. This, in turn, would negatively
impact our ability to meet 1998 goals for full funding in an orderly
manner. This extremely cost effective program has benefited many needy
and vulnerable people for many years. Since its modest start in 1972,
the number of women, infants and children receiving food and health
care, and achieving healthier lives has grown from a few thousand to
last year's year-end level of 7.4 million. WIC is making a real
difference in the health of pregnant women and infants, thus saving
large health care costs in future budgets. Without this supplemental,
participation could decline by several hundred thousand women, infants,
and children. We are requesting that the Secretary be provided
discretion to distribute funds among States outside the current
regulatory funding formula. We would use this discretion to avoid
disrupting service to high priority participants and ensure that States
avoid large participation drops.
1998 budget request
The Food, Nutrition, and Consumer Service requests $40.6 billion in
new budget authority in fiscal year 1998. This includes contingency
reserves of $2.5 billion for the Food Stamp Program and $100 million
for the Supplemental Nutrition Program for Women, Infants, and Children
(WIC). The request is a decrease of $258 million below the fiscal year
1997 appropriation level, based on continuing economic improvement and
welfare reform. The President's 1998 request also contains policy
proposals that will ameliorate some of the harsher aspects of welfare
reform.
food stamp account
The Food Stamp account now contains funding for the Food Stamp
Program and its alternatives, the Nutrition Assistance Program for
Puerto Rico and the Food Distribution Program on Indian Reservations.
Welfare Reform legislation also added section 27 to the Food Stamp Act
which provides Food Stamp account funding for commodity purchases for
TEFAP.
The Food Stamp Program is the primary source of nutrition
assistance for low-income Americans. The mission of this nutrition
security program is to assure low-income Americans access to a
nutritious, healthful diet through food assistance and nutrition
education, thereby improving the nutritional status of low-income
households and strengthening the agricultural economy. We are
requesting $27.6 billion for the Food Stamp Program, including a
contingency reserve of $2.5 billion that will ensure available funding
for any unforeseen circumstances, such as economic disturbances,
natural disasters and Welfare Reform changes in the cash assistance
programs that could lead to fluctuations in Food Stamp costs. Our
request also includes $1.2 billion for the Program of Nutrition
Assistance for Puerto Rico, as well as funds for nutrition assistance
for the Northern Marianas and American Samoa.
Under the current economic forecast for fiscal year 1998 we project
that: The average rate of unemployment is expected to be 5.5 percent in
1998; program participation will average 23.4 million persons monthly
in 1998; and the Thrifty Food Plan, will be $415.00 for a family of
four. These factors will result in an average monthly benefit of $77.27
per person.
The number of program participants declined throughout fiscal year
1996, an indication of a strengthening economy. Throughout most of
fiscal year 1996 and continuing into the early months of 1997, the
number of food stamp recipients remained at approximately 1 million
less each month than participation was for the same month in the
previous year. This steady decline, which started in August of 1994,
resulted in the Food Stamp Program spending $3 billion less than it
would have had participation not declined. This trend reflects the Food
Stamp Program's ability to respond to changing economic conditions,
expand in times of rising poverty and unemployment, and shrink as the
economy improves.
The requested benefit reserve takes on new importance in light of
dramatic changes effected by welfare reform. States have a great deal
of latitude in implementing these changes. Welfare Reform has given
States broad new authority under the Temporary Assistance for Needy
Families block grant. The choices States make concerning the level and
form of benefits provided can affect Food Stamp Program costs
dramatically. For example, if States decide to reduce cash assistance,
food stamp costs will increase. The benefit reserve serves as insurance
in the event of unforeseen changes in the implementation of Welfare
Reform. The benefit reserve provides the mechanism to protect the
program's ability to get food to people who need it and to ensure that
benefits will continue to be available for eligible low-income
children, elderly, families and individuals.
food stamp program proposals
The Personal Responsibility and Work Opportunity Reconciliation Act
of 1996, signed by the President on August 22, 1996, is a historic law,
for it has dramatically changed the cash welfare system. It promotes
self-sufficiency and personal responsibility, it enhances State
flexibility, it simplifies program administration, and it strengthens
program integrity.
However, the President has also said that some provisions will
cause unfair and unwarranted harm to many families. Our food stamp
legislative proposals address those concerns within the fiscal
constraints of balancing the budget by fiscal year 2002.
--They will create a real work requirement for unemployed adults by
significantly increasing work opportunities, providing funds to
create work slots so that almost all individuals subject to the
time limit who are unable to find employment would be offered a
work slot, and establishing a tough sanction so that
individuals are forced to make the choice of living up to the
responsibilities of accepting food assistance or becoming
ineligible for the program.
--They delay the implementation and deadline dates for removing legal
resident participants from the program to help ensure a more
orderly implementation and allow immigrants additional time to
seek naturalization.
--By fiscal year 2002, our proposals will eliminate the cap on the
excess shelter expense deduction to help families with children
who have high shelter expenses.
--They will resume indexing the standard deduction in fiscal year
2002 to prevent further decline in the real value of this
deduction.
--They will raise and index the vehicle fair market value exclusion,
recognizing that access to reliable transportation is critical
to finding and keeping employment.
We estimate that these proposals will increase Food Stamp Program
costs by $365 million in fiscal year 1997 and $805 million in fiscal
year 1998.
food stamp program anti-fraud activities
Combating fraud and abuse in the Food Stamp Program remains a high
priority of this Administration. Our strategy is to prevent fraud by
ensuring that only legitimate stores participate in the Food Stamp
Program and by strengthening penalties against those entities that
violate program rules. USDA has also moved forward under new and
existing statutory authority to enhance our ability to eliminate
program violators and better enforce fines and penalties.
Our request supports measures that will eliminate retailers who
misuse benefits and remove barriers to EBT expansion--both of which
will strengthen the link between the Food Stamp Program and a
healthful, nutritious diet. The Administration believes that the
actions currently underway will provide significant deterrent to food
stamp fraud.
We initiated a contract in fiscal year 1997 to use private vendors
to increase the number of pre-authorization visits to stores wanting to
participate in the program. Visits under this contract will begin this
summer. Our fiscal year 1998 budget includes funding to continue
contracting with private vendors to increase the number of on-site
retailer visits and related FCS expenses. Funds for both years will
finance contracts for pre and post authorization visits by contractors
and related expenses such as follow-up visits by FCS staff and
increased reviews of appeals from those stores denied participation in
the program. These on-site visits are an important part of our efforts
to ensue that only eligible stores are allowed to accept food stamps
and restore confidence in the Government's management of the program.
This requested funding will be used to ensure initial and continued
store eligibility. FCS will continue to aggressively fight Food Stamp
fraud and abuse. Administratively, the Agency will also continue to
work on its own as well as with OIG and State and local officials to
eliminate ineligible stores from the program. Over the past two years,
the number of stores authorized to accept food stamps has declined from
over 210,000 in September, 1994 to about 193,000 today.
food stamp payment accuracy
Payment accuracy will continue to be a major management focus. I am
pleased to report to you that the States and my Agency, working
together, have brought food stamp payment error down from 10.8 percent
in 1993 to 9.7 percent. This has averted erroneous payment of nearly
$350 million in the last couple of years. However, 9.7 percent is still
too high and we are concerned that the complexity of implementing
Welfare Reform may distract State managers from continuing our
successful campaign to reduce error rates. We will redouble our effort
so that we can come back in future years and continue to bring you good
news on error rates.
electronic benefits transfer
In fiscal year 1998, the Administration will keep expanding the
electronic delivery of Food Stamp Program benefits. Electronic Benefits
Transfer (EBT) systems modernize delivery cost-effectively while
improving recipient service, State management, benefit security,
financial tracking, and fraud detection. EBT operates like a debit card
system for recipients' food accounts.
All States have the option to use EBT and 18 States have already
implemented EBT systems, delivering 15 percent of all Food Stamp
Program benefits. Eight States--Maryland, New Mexico, South Carolina,
Texas, Kansas, North and South Dakota and Utah--have Statewide EBT
systems. Every other State is in the process of planning for or
implementing EBT. This represents enormous progress in the last three
years and demonstrates a growing consensus that EBT is effective and
efficient. We will eventually eliminate paper coupons along with the
stigma associated with using them and the inefficiencies of processing
them. EBT not only supports the nutritional purpose of our program with
a user friendly system, but is also beneficial for every stakeholder
involved. Recipients, States, stores, banks, and the taxpayers all win.
food stamp tax offset expansion
We are progressing in our efforts to expand the agency's debt
collection efforts. In fiscal year 1991, the Department initiated a
test for collecting claims that resulted from household error through
Federal income tax refund offsets. Between calendar year 1992 and 1995,
the number of participating States grew from 2 to 32 and collected a
total of $70 million. In calendar year 1996, 40 States participated and
collected $40 million in the Tax Offset Program. Collections from this
program are estimated at $35 million in fiscal year 1998. Welfare
Reform has given FCS the authority to continue expanding this
collection tool and we are encouraging all States to participate.
the food distribution program on indian reservations (fdpir)
This program, a variant on the delivery mechanism of benefits under
the authority of the Food Stamp Act, has recently begun to grow after
several years of decline. There is currently $65 million available in
fiscal year 1997 and $75 million is requested for fiscal year 1998.
With the high unemployment in many FDPIR areas, concurrent with
operation of food stamps, and the potential for Welfare Reform waivers
of food stamp work requirements, we are not sure how much more growth
to expect.
child nutrition programs
The purpose of the Child Nutrition Programs is to assist State and
local governments in providing food services that serve healthful,
nutritious meals to children in public and nonprofit private schools,
child care institutions, certain adult day care centers, and summer
recreation programs. We are requesting a total of $7.8 billion for the
Child Nutrition Programs. The request is $870 million lower than the
1997 appropriations because we anticipate funds will be available from
1997. Welfare Reform legislation changed the rates paid per meal in the
lunch and breakfast programs by rounding down the payments to the
nearest cent and made substantial changes in the eligibility criteria
for the Child and Adult Care Food Program and its payments structure.
This budget request will provide the funding necessary to support the
National School Lunch, the School Breakfast, Summer Food Service, the
Child and Adult Care Food and the Special Milk Programs. We estimate
that in fiscal year 1998 these programs will support: 4.4 billion
school lunches, 1.2 billion school breakfasts, 1.7 billion meals in
centers and family day care homes, 144 million summer food service
meals, and 154 million half-pints of milk.
This request reflects the administration's commitment to improving
the nutritional status of the Nation's children. FCS will also continue
its efforts to streamline the administration of the Child Nutrition
Programs at the State and local levels through promulgation of
regulations and policy issuances affecting each of the programs.
school meals initiative for healthy children
The USDA School Meals Initiative for Healthy Children is a
comprehensive integrated plan to ensure that children have healthy
meals at school. A major part of this plan is the historic update of
nutrition standards so that school lunches and breakfasts meet the
Dietary Guidelines for Americans. However, just enacting policies will
not make this change a reality for every child, and USDA cannot
accomplish this historic change alone. That is why USDA established
Team Nutrition, a Nationwide integrated program designed to support
implementation of the School Meals Initiative for Healthy Children.
The mission of Team Nutrition is to improve the health and
education of children by creating innovative public and private
partnerships that promote food choices for a healthful diet through the
media, schools, families, and the community. It supports implementation
of updated nutrition standards through two coordinated approaches--
Nutrition Education and Training and Technical Assistance.
Nutrition Education is provided through a comprehensive, integrated
program designed to build skills and motivate children to make food
choices for a healthy diet in accordance with the Dietary Guidelines
for Americans. This effort brings proven, focused, science-based
nutrition messages to children in a language that they understand while
strengthening social support for healthy children's diets among
parents, educators, and food service professionals.
Team Nutrition is built around a framework of in-school and public
communication efforts, with a focus on local schools and communities to
support implementation of updated nutrition standards. Innovative
educational resources are developed and distributed through supporter
networks, directly by FCS and USDA's Cooperative State Research,
Education, and Extension Service, and through other government agencies
such as the Department of Education and the Department of Health and
Human Services. Support is focused at the local level through Team
Nutrition Schools, which actively engage children and their parents,
food service staff, teachers, agricultural organizations, and other
leaders in their communities to improve school meals. There are now
over 17,000 Team Nutrition Schools across the country, and the number
continues to grow.
Training and Technical Assistance is a ``change-driven'' program
providing support to school food service personnel implementing the
Dietary Guidelines for Americans. This effort will ensure that school
nutrition and food service personnel have the education, motivation,
training, and skills necessary to provide healthy meals that appeal to
children and meet USDA's nutritional requirements. These personnel will
also have a clear vision of their role in the school community and as
integral team members of comprehensive school health programs.
In fiscal year 1998, FCS requests $10 million for this two-pronged
effort. These funds are critical to supporting schools' efforts toward
achieving full implementation of the Dietary Guidelines in school
meals. We will use the funding to support several important activities.
Team Nutrition will continue to provide technical assistance and
training for food service professionals and nutrition information that
empowers children and families to make healthy food choices. We will
accentuate the importance of public-private partnerships in order to
maximize the Federal dollars available for this endeavor. The number of
Team Nutrition schools will continue to grow, engaging additional
children and their families, teachers, food service staff, agricultural
organizations and other community leaders in improving school meals.
child nutrition integrity
In keeping with the Department's commitment to make our programs
more effective, FCS aggressively pursues suspension and debarment
actions whenever suitable cause exists. To that end, FCS formed a task
force dedicated to this effort and joined forces with the Department of
Justice and the Defense Logistics Agency to identify offenders. At the
time of our budget request, FCS had identified 221 individuals and
corporations subject to suspension and debarment determinations;
actions had been initiated against 202. Final administrative action had
been taken in 159 cases with 80 entities debarred for 3 years from
involvement on a nonprocurement basis with all Federal Programs.
Compliance agreements aimed at protecting the Federal interest had been
signed or were under discussion for 51 other corporations. FCS will
continue to pursue appropriate debarment action as necessary.
Furthermore, coordinated review efforts attempt to improve school
management of the National School Lunch Program through evaluation of
the local meal service data and provides training and technical support
to help improve local program accountability. Reviews have been
conducted at over 7,000 schools.
supplemental nutrition program for women, infants & children (wic)
The purpose of the WIC Program is to improve the health of
nutritionally at risk, low-income pregnant, breastfeeding and
postpartum women, infants and children up to their fifth birthday. The
Budget requests $4,108 million in 1998, an increase of $378 million
over the 1997 appropriated level. The size of the increase over 1997 is
somewhat misleading, however, for several reasons. One, it does not
reflect the proposed 1997 supplemental request of $100 million. Two, it
includes a contingency fund of $100 million to guard against
unanticipated food price costs. The contingency fund is assumed to have
no outlays. Three, reductions in carryover funds from $145 to $100
million in 1997 provide $45 million in additional program resources in
1997. Since carryover is assumed to remain constant at $100 million in
1998, an additional $45 million in Budget Authority is needed to
maintain the same program level in 1998. When these three factors are
accounted for, the Budget Authority request increases by only $133
million between 1997 and 1998. Over $100 million of the increase is
needed to cover inflationary increases in program costs. Only about $30
million is used to expand participation in 1998.
During fiscal year 1996, the program continued to provide service
to low-income women, infants and children at nutritional risk. Average
participation in WIC for fiscal year 1996 was 7.2 million persons per
month. For fiscal years 1997 and 1998, average participation is
estimated at 7.40 and 7.45 million persons per month, respectively.
A major reason for WIC's success has been access to health care as
well as an emphasis on nutrition education and provision of
supplemental foods. Emphasis is placed on the benefits of
breastfeeding, as well as the dangers of substance abuse including
smoking during pregnancy. WIC also serves as a gateway to other related
health and social services, such as prenatal care, well-child care,
Medicaid, and immunization programs. Studies published by USDA and
other groups have found that participation in WIC is highly cost
effective and results in improved birth outcomes and reduced health
care costs. During the past seven years, participation in this program
has increased by over 70 percent, with the largest increases being in
children's participation.
wic cost containment initiatives
All WIC State agencies and most Indian Tribal agencies have
implemented some measure of cost containment activities in order to use
their food grants more effectively. The use of infant formula rebates
continues to be the most successful cost containment method. This
subcommittee's support for WIC appropriations is evident from the
program's growth. However, we cannot ignore contributions from
successful cost containment efforts. This activity will help USDA to
reduce formula cost by over $1.2 billion in fiscal year 1997 which in
turn allows the program to reach 1.7 million more participants each
month.
wic funding allocation formula
The Department is requesting authority to waive selected aspects of
the grant allocation formula while awaiting regulatory revision. The
current formula worked well when the program was growing rapidly. It is
less well suited to allocating funds among States as the program moves
closer to the goal of full funding. The rule making will update the
formula to better serve the needs of a more stable full-funded program.
commodity assistance programs
The Commodity Assistance Programs combines funding for the
Commodity Supplemental Food Program (CSFP), administrative funding for
The Emergency Food Assistance Program (TEFAP), The Nutrition Program
for the Elderly (NPE) and Pacific Island Assistance. The budget
requests:
--$86 million in support of 123,900 women, infants, and children and
187,600 elderly in CSFP. In contrast to fiscal year 1997, when
$16 million of fiscal year 1996 funding was available to
support this program, no funds from fiscal year 1997 are
available for program operations in fiscal year 1998. This
budget request will therefore necessitate a reduction in
elderly participation.
--$45 million for TEFAP administrative expenses plus the $100 million
available in the Food Stamp Account, allowing for a total
program cost of $145 million.
--$140 million for NPE, which will fund an estimated 248 million
meals at a payment rate of 56.4 cents per meal.
--$1.2 million for Pacific Island Assistance, which will fund the
nuclear affected islands, disaster relief for non-
Presidentially declared disasters and the Freely-Associated
States. This reduced funding is consistent with the phase-out
of the Freely Associated States.
research and evaluation
The fiscal year 1997 appropriation severely restricted the funds
available for research and evaluation on the grounds that the number of
studies underway at FCS appeared high. The President's budget request
includes $17 million to partially restore these accounts to their
historic levels.
There is a critical need for research and evaluation. FCS research
is used to determine if policy objectives are met and to describe what
works, what doesn't, and why. Research activities are instrumental in
enabling FCS to respond to the oversight responsibilities of Congress;
provide assistance to States to identify and share best practices;
measure the effectiveness of program operations and alternatives; and
provide objective, reliable outcome measures of program performance.
The Agency's research has a proven track record of improved
government performance. For example, FCS research has:
--Made critical contributions to the emergence and expansion of EBT,
supporting the first demonstrations of feasibility and cost-
effectiveness;
--Helped fight fraud and abuse by generating the first, and only,
data-based estimates of the prevalence of food stamp
trafficking;
--Determined the nutrients provided to school children in school
lunches and breakfasts, leading to the first update of
nutrition standards in school nutrition programs in 50 years;
and
--Documented every dollar invested in prenatal WIC participation
saves an average of $3 in Medicaid costs during the first 60
days after an infant's birth.
The number of studies may appear large because we deal with
multiple programs that are highly complex with many stakeholders and
policy audiences, and we face a broad array of research issues related
to food security, work, health, family, economic well-being, program
management and program integrity. Our studies collect impartial and
relevant data, use techniques that meet the highest standards of
accepted scientific practice, and provide objective analyses. The
investment in FCS research has proved beneficial over the years. We
serve the needs of many audiences, and the technical credibility of our
products is well established.
With the funding requested in the President's budget, the Agency
will be able to:
--Expand efforts to assess the consequences of Welfare Reform on Food
Stamp and Child Nutrition Program clients;
--Continue critical updates of basic program information, including
the characteristics of food stamp participants and changes in
nutrients available in school nutrition programs following the
School Meals Initiative meal pattern improvements;
--Focus WIC research on improving program management and efficiency
and improve WIC eligibility determination tools as recommended
by the Institute of Medicine; and
--Expand development of cost-effective ways to improve program
integrity and reduce administrative costs, focusing on
operational improvements to reduce error and fight trafficking.
Additional funds would enable extensions of ongoing work on
recipient and retailer trafficking to better target
investigations.
Restoring the investment in FCS research is critical in light of
Welfare Reform, the most sweeping set of changes in social policy in
the last 60 years. Congress needs to make an investment in policy-
relevant research.
Our research request of $17 million represents less than one half
of one tenth of one percent of our investment in our programs. This is
a tiny investment to provide vital information about how effectively we
are spending $40 billion annually.
government performance and results act
We have developed a five-year Strategic Plan in response to the
requirements under the Government Performance and Results Act (GPRA) of
1993. This Strategic Plan defines the Agency's goals and objectives for
all its nutrition assistance programs as well as administration and
financial management. Each goal and objective is accompanied by one or
more performance measures. In addition, we are developing the Annual
Performance Plans required by GPRA. These plans are derived from the
Strategic Plan and their activity outcomes are designed to contribute
directly to meeting the Agency's strategic goals and objectives. We are
also coordinating strategic planning with other agencies within the
Department as a part of a USDA-wide effort to improve nutrition
assistance and education.
food program administration
Funding for the Food Program Administration is requested in the
amount of $105.5 million. The FPA appropriation funds the majority of
the salaries and administrative expenses of FCS, although a small
portion of these expenses are funded from program appropriations. The
efforts of agency staff during fiscal year 1996 resulted in progress
toward improving the nutrition of program recipients, strengthening
program integrity, and implementing EBT Nationwide. However, due to
restrictive staff year ceilings in the Food Stamp and Child Nutrition
accounts, and continuing yearly reductions of 60 to 80 staff years in
the FPA appropriation, we have only been able to deploy staff from
crisis to crisis, which is making continuous, effective program
administration nearly impossible.
The administrative resources required to keep pace with changing
program needs and to implement new financial management initiatives
such as: Federal Financial Management Improvement Act, Government
Performance and Results Act, Government Management and Results Act,
Debt Collection Improvement Act, Cash Management Improvement Act, and
the Chief Financial Officers Act have further strained available staff
years. Outside authorities, including GAO and OIG, have consistently
called for additional staff to improve program oversight. Clearly,
ensuring proper fiscal and program management for an agency managing
over $40 billion in program funds must be a top priority.
While the agency has struggled to maintain adequate program
oversight by prioritizing its work and implementing numerous
efficiencies, the dramatic loss in staff has stretched available FPA
resources to the breaking point. It is imperative that FCS maintain a
steady work force to meet the challenges of nutrition program delivery
and keep up with new legislation such as Welfare Reform. Further
resource reductions will most certainly result in increased risk to
program integrity and possibly require significant organizational
changes, including closure of Regional offices and reduction of program
oversight functions.
Without the necessary staff to properly implement, control, and
maintain accountability over FCS program funds, Federal oversight,
financial reporting, and fiscal management to protect Government
interests will suffer. FCS long ago met its fiscal year 1999
streamlining target in accordance with the National Performance Review
and the Vice President' goals of reducing the Federal work force. The
FCS administrative budget is a ``bare bones'' request. For the past
several years, we have requested increases, which were not approved by
the appropriations committees. This year's request is nothing more than
last year's funding level plus half the inflation needed to offset
mandated salary increases. No funding is requested for updating the
agency's automated infrastructure, which demands attention. The agency
simply can not sustain additional reductions in staff or funding
without seriously impairing its ability to provide children and needy
families with access to a more healthful diet through its Food
Assistance Programs, nor can we maintain adequate vigilance over the
resources entrusted to us by the Congress on behalf of the American
taxpayer.
conclusion
Since its inception in 1969, the goal of FCS has been to provide
food and nutrition assistance for the Nation's children and low-income
families. We are committed to achieving this goal as efficiently and
effectively as possible. We believe that our request of $40.6 billion
and each proposal contained therein is crucial to continued efficient
program operations.
Mr. Chairman, this summarizes the fiscal year 1998 FCS budget
request. I will be happy to answer any questions that you may have.
______
Prepared Statement of Eileen Kennedy
Good morning Mr. Chairman and Members of the Committee. I am Dr.
Eileen Kennedy, Executive Director, of the Center for Nutrition Policy
and Promotion (the Center) within the Food, Nutrition, and Consumer
Service mission area of the U.S. Department of Agriculture. I am
delighted to tell you about the exciting and innovative work our Center
is doing and planning for the Department and for all Americans.
As the lead Federal Agency in human nutrition, the Department is
charged with developing nutrition policy and conducting science-based
nutrition education programs for all Americans, including those
involved in Food Assistance Programs. Our Center, established in 1994,
is the Department's focal point for linking scientific research to the
consumer. It accomplishes this mission by developing and analyzing
National survey data on food consumption, nutrient content of the U.S.
food supply, food groups and recipes; by analyzing trends and
determinants of dietary behavior, including responsiveness to consumer-
oriented nutrition promotions; and assessing impacts of alternative
approaches to improving the nutritional quality of American diets. To
continue this work in fiscal year 1998, we are requesting $2.499
million for the Center.
The Center is an exciting model of how the Federal government can
be reinvented to leverage a relatively small investment into impressive
achievements. Capitalizing on its multi-disciplinary, highly motivated
and diverse staff, in fiscal year 1996, the Center produced (1) the
``Nutrition Action Themes for the United States'' that supported the
U.S. delegation at the World Food Summit in Rome, Italy; (2) the
report, ``Expenditures on Children by Families'' used by 50 percent of
States in setting foster care payments; (3) food plans, including the
Thrifty Food Plan, that constitute the basis for the Food Stamp Program
benefits and military food cost allowances; and (4) ``The State of
Nutrition Education: A Report to the Secretary'' that provided the
first self-assessment of the Department's nutrition education programs
and helped formulate a nutrition education policy for the 21st Century
that meets the requirements of the Government Performance and Results
Act.
As a result of the Center's activities, Americans have a better
understanding of good nutrition and a good diet. For example, recent
survey data indicate that 60 percent of Americans recognizes the Center
produced Food Guide Pyramid. In addition, because the Center's
activities and long rich history of nutrition education within USDA,
significant, positive changes in the American diet are occurring. The
percent of calories from fat has dropped from 40 percent to 33 percent.
However, the challenge of improving the American diet continues. A
government review in the summer of 1994, indicates that at the current
rate of change, we will not meet the Year 2000 goals for reductions in
fat and saturated fat. Continued efforts in nutrition promotion are
critical. Within USDA, the Center will have a key role in nutrition
promotion for all Americans.
The Center achieves its accomplishments using a few key strategies.
First, a dynamic core of analysts from the disciplines of nutrition,
food science, agricultural and consumer economics, social marketing,
and computer and telecommunication specialties permits the Center to
conduct significant in-house analysis and produce appropriate products
for a variety of key customers. Second, the Center leverages its
relatively small resources by entering into partnerships and alliances.
For example, the Center spearheaded the ``Community Nutrition Action
Kit'' by working with the Cooperative State Research, Education, and
Extension Service to bring state-of-the-art nutrition education into
every county in the Nation. This cost-effective project produced 35
fund and interactive activities for children, their families and their
communities to promote food choices for a healthy diet. For another
example, the Center represented the Department in the Dietary
Guidelines Alliance--a new alliance of food industry, health
organizations, and government to help consumers implement ``The Dietary
Guidelines for Americans.'' The Alliance's consumer-tested messages
will be highlighted in March 1997 during National Nutrition Month.
In fiscal year 1997, the Center embarks on an enhanced mission to
provide a vision for the 21st Century of how the Department of
Agriculture can effectively apply science-based research from
nutrition, economics, consumer marketing research, and other relevant
disciplines to the challenge of recreating U.S. nutrition policy for a
new Century. The Center is executing a strategy for identifying the
needs of its most important customers--including decision makers and
news makers who help disseminate messages--to provide them with
targeted information in the form they can use best. Working with many
close partners, the Center is completing a set of highly significant
products--Thrifty Food Plan, Nutrient Content of the U.S. Food Supply,
the new Healthy Eating Index, a new monthly series of briefs. At the
same time the Center is updating the research base supporting the Food
Guide Pyramid, planning for the next edition of the Dietary Guidelines,
and positioning itself to launch a National nutrition promotion
campaign stressing the many consumer-oriented benefits of healthy
eating to coincide with the release of the next Dietary Guidelines in
the Year 2000.
The Nation is now aware that nutrition is the link between diet and
health. Four of the leading causes of death in the United States are
linked to diet. Heart disease, cancer, stroke, and diabetes account for
more than 1.4 million deaths annually, nearly two-thirds of the U.S.
total. Diet also plays a role in other health conditions such as
overweight, hypertension, and osteoporosis, which can reduce the
quality of life and productivity and contribute to premature death.
Taken together, these seven diet-related health conditions cost society
an estimated $250 billion each year in medical costs and lost
productivity.
Improving the diets of all Americans can reduce early deaths,
improve the quality of life and increase market opportunities for new
food products and technologies. For example, Americans are currently
eating too much saturated fat. Reducing the percentage of calories
consumed from saturated fat by 3 percentage points could prevent about
100,000 new cases of coronary heart disease by the year 2005 and save
nearly $13 billion in medical costs and lost earnings.
By providing timely and insightful analysis to decision makers, by
forecasting dietary trends, by promoting consumer-oriented nutrition
messages, and by working collaboratively with key stakeholders in the
food, agriculture and health fields, the Center can continue to
leverage its modest resources and help Americans enjoy healthier diets
and lives.
Mr. Chairman, this concludes my testimony. I will be happy to
answer any questions that you may have.
WIC Farmers Market Nutrition Program
Senator Cochran. I know that Senator Leahy is a member of
the Judiciary Committee, which is meeting as we speak on other
issues, and may have to leave early. I am going to call on him
at this point, if our distinguished ranking member has no
objection, for any opening statements or questions that he may
have.
Senator Leahy.
Senator Leahy. Well, Mr. Chairman, I appreciate that
courtesy. I know how much I enjoyed and have enjoyed working
with you on the authorizing committee, both in years when
either you have been chairman of various subcommittees and I
have been ranking member or I have been chairman and you have
been ranking member. We have worked closely together.
I am going to ask a question regarding my strong support of
the WIC Farmers Nutrition Program. What this does, for those
not aware, is to set up farmers markets that allow WIC families
to buy from these farmers markets.
In my own State, that means a lot of them get the most
nutritious and fresh food, but it also has the added advantage
that if we are spending those WIC dollars, it is going right to
people in the area. It has kind of a plus-plus situation with
it.
Farmers Market Nutrition Program--Expansion
The President requested a funding increase, which I
support, but I want to make sure that if we add increases,
Vermont is going to be in good shape on this. But I want some
money to go to States not yet in this program, if they want to.
Will you be able to take steps, if we do get more money, to
be sure that this program reaches more States? My wife and I go
to a couple farmers markets near where our home is in Vermont.
The chairman has visited that area with me a couple
different times. And I just see the tremendous benefit. Every
farmer there tells me how helpful it has been.
Will we be able to expand this?
Ms. Keeffe. Senator, we are very hopeful that we will. In
terms of the request that we have made for the Farmers Market
Program this year, we foresee that we would be able to expand.
We would have a little over $2 million of that money earmarked
for that purpose.
The priorities in the Farmers Market Program are, first,
that we are able to meet the current levels of funding in
current States that are already in the program.
The second priority is granting expansion requests within
those States, and the third level is bringing new States into
the program. We feel that with the increase that we have
requested, we will be able to meet all of these priorities and
will be able to expand.
We have had requests from a half dozen States that are
interested in coming into the program. We are very excited by
that.
WIC Supplemental Funding
Senator Leahy. Well, I would encourage any States that have
the opportunity to do so. I really think it is a win-win
situation. The WIC participants are getting used to buying
locally produced products, usually fresher, but it is also
helping the local economy.
I testified that 400,000 participants may have to be taken
off WIC unless the supplemental is approved. What States would
be hurt the worst? Which States would be hurt the worst? Do we
have that kind of a breakdown? And if not, could it be supplied
for the record?
Mr. Braley. Senator Leahy, we have done our own analysis
and we have also asked the States for their plans of how they
would likely react to the current level of funding in the WIC
Program.
A significant number of States have reported that they will
have to reduce their participation below current levels. I
believe the number is about nine geographic States.
We have Indian State agencies as well that are reporting
the need to reduce their participation by more than 5 percent,
some of them well above even a 5-percent reduction.
Those are fairly optimistic scenarios that the States have
provided us. We think that because States will not be able to
spend every dollar they have this year, that actual
participation reductions would be even more severe than
reported by the States.
We expect quite a few States would have to make major
reductions in participation between now and the end of the
year.
Senator Leahy. Thank you.
Electronic Benefits Transfer [EBT]
And how are we doing on EBT?
Ms. Keeffe. We are very proud of our progress in EBT,
Senator. Currently, we have 18 States that have EBT operations.
There are eight States where EBT is operating on a statewide
basis. Currently, about 15 percent of all total benefits are
provided via EBT.
By the end of fiscal 1997, we estimate that 25 States will
be operational, and we will be delivering 30 percent of
benefits via EBT. It is moving quite rapidly. We expect to
attain the goal of being completely EBT operational by the year
2002.
Senator Leahy. Good. Thank you.
I will put the rest in the record, Mr. Chairman.
Senator Cochran. Thank you very much, Senator, for your
participation and your leadership in a lot of these nutrition
areas. We know of your strong support for many of these
programs and assistance and leadership in drafting a lot of the
legislation that is funded in this bill.
Senator Bumpers.
Senator Bumpers. Mr. Chairman, I only have a couple
questions, and I will submit the rest of mine for the record.
Federal Tax Refund Offset Program [FTROP]
But I guess, Mr. Ludwig, I probably should direct this
question to you. You have indicated that the Food Stamp Offset
Program has helped recapture, I think you said, $70 million. Is
that correct?
Mr. Ludwig. It is approximately $100 million, I believe,
sir.
Senator Bumpers. $100 million?
Mr. Ludwig. Yes, sir.
Senator Bumpers. And 32 States are participating?
Mr. Ludwig. Let me give you the updated numbers. As of
1996, a total of 40 States participated in the FTROP Program.
We have collected in excess of $100 million to date.
Senator Bumpers. Why do we not just mandate all the States
to do that? It seems to be a very effective collection program.
Mr. Ludwig. Yes, sir; we have seen great progress among our
States over the last few years. We have the highest
expectations that the remaining 10 will be coming on board and
implementing FTROP over the next few years. We have not had the
authority to mandate it on States, but they are proceeding
forward.
Senator Bumpers. Do we pay the States their administrative
expense to operate this program?
Mr. Ludwig. Yes, sir; we pay it on a 50-percent match.
Senator Bumpers. Fifty percent of what they collect?
Mr. Ludwig. No, sir.
Senator Bumpers. Fifty percent match of the administrative
expense.
Mr. Ludwig. Yes, sir; 50 percent match of their
administrative costs.
WIC Funding
Senator Bumpers. On the WIC Program your budget request for
1998 is based on a caseload of 7.4 million, is that correct,
Madam Secretary?
Ms. Keeffe. In 1998 it is based on 7.5 million.
Senator Bumpers. 7.5 million. What is the present caseload?
Ms. Keeffe. Well, we are seeing numbers in excess of 7.4
million late last year, October and November figures from last
year, which is why we are in the position of requesting the
supplemental, because these numbers are higher than what we had
estimated fiscal 1997 participation at.
Senator Bumpers. Now, you are anticipating 7.5 million. We
have a $100 million supplemental coming up. You had $100
million carryover. Is that not correct?
Ms. Keeffe. Yes.
Senator Bumpers. And you could use that without any further
legislative authority, can you not, or do you have to have some
authority to spend that carryover?
Ms. Keeffe. No; we can spend it.
Senator Bumpers. All right. I am just trying to put the
numbers together.
Ms. Keeffe. Sure.
WIC Funding Increases
Senator Bumpers. You have a $100 million carryover, $100
million supplemental, and you are getting a $300-plus million
increase for 1998. So that totals $500-plus million more that
you will have. No; wait a minute. The supplemental is going to
be for 1997, is it not?
Ms. Keeffe. That is right. The supplemental is 1997.
Senator Bumpers. And the carryover, too.
Ms. Keeffe. And the carryover will be--we will not have it
until we are into 1998, when, you know, all the finances come
through and all the accounting. And the $300-plus million in
1998 is not all total increase; $100 million of that is a
contingency fund that would only be used if food cost increases
of an amount where we need to reach into that pot of money.
So that is just aside. If that, you know, were to happen,
then that money can be used for food money for inflation.
And, really, we are only talking about $30 million of that
money that is new, increased money for increased participation,
if you will. The rest will take care of inflation.
Senator Bumpers. Do you feel comfortable with your request
for 1998, that that will be adequate?
Ms. Keeffe. Yes; we do.
Senator Bumpers. For 7.5 million?
Ms. Keeffe. For 7.5 million. But we need the supplemental
for where we are in fiscal 1997 to keep that growth in place.
Otherwise we are going to drop behind.
WIC Eligibles
Senator Bumpers. What percentage of the total people who
would be eligible for WIC if they applied, what percentage of
7.5 million of that--let me restate it.
If everybody in the country applied for WIC that would be
eligible for it, how many would that be? What do you think the
total pool is?
Ms. Keeffe. Well, the eligible, the income eligible,
population, we estimate at 11.4 million. And then the fully
eligible, which means income eligible and nutritionally at
risk, is 9.2 million.
Senator Bumpers. Do you have any outreach programs to reach
those people that are not on the program that would be
eligible?
Ms. Keeffe. Oh, yes; there has been a lot of outreach
taking place which is why the program has successfully grown
over the years. We estimate that 80-percent of those fully
eligible would naturally participate. The 7.5 million figure is
82 percent of those fully eligible.
WIC Immunization
Senator Bumpers. Madame Secretary, I recently spoke to all
the WIC directors who were in town. And following their
convention, they met with CDC in a 1- or 2-day meeting. And I
had tried to facilitate that meeting for some time to see if we
could not get the immunization levels up through the WIC
Program.
And I did not get any feedback for how well that meeting
went. That has been a couple months ago, I guess. But the WIC
directors that I have talked to are always anxious to
participate and help out with the immunization program.
Did you happen to attend that meeting?
Ms. Keeffe. I did, Senator. I had the pleasure of being
there for the opening. It was really wonderful, because not
only were there representatives of the WIC directors and CDC,
but also the Association of State and Territorial Health
Officials.
It was a wonderful opportunity to share experiences and
success stories of what some States had been doing that were
best practices and to be able to share those practices with
others.
The support we have had from CDC in recent years to make
money available to build data system infrastructure to track
infant immunization in the WIC Program has been very helpful.
WIC stands in the forefront of aggressively being part of child
immunization, especially the very early years. This is
something that, since I have come to the Food and Consumer
Service I have been personally very involved with. I have also
had the pleasure of working with Mrs. Bumpers and Mrs. Carter
to see other areas in our programs where we could be helpful in
promoting immunization, which, of course, is vitally important
to young children.
Prepared Statement
Senator Bumpers. Thank you very much, Ms Keeffe.
Ms. Keeffe. Thank you.
Senator Bumpers. Thank you, Mr. Chairman.
[The statement follows:]
Prepared Statement of Senator Bumpers
I want to join my colleague, Senator Cochran, in welcoming before
this subcommittee representatives of the United States Department of
Agriculture. The subject today is a review of the budget request for
USDA's Food and Consumer Service. The Food and Consumer Service has the
responsibility of not only ensuring adequate diets for the most
vulnerable of our people, but also increasing the public awareness and
encouragement to improve the diets and nutrition-related health of our
entire society.
Not only are these programs of special importance to the American
people, they also represent a substantial portion of funding under the
jurisdiction of this subcommittee. Of the total in new budget authority
for all USDA programs funded by this subcommittee, those of the Food
and Consumer Service represent $39.8 billion, or 78.3. If you include
additional amounts included in the legislative proposals to come before
Congress, the Food and Consumer Service request increases to $40.6
billion, or 79.3 percent of the USDA request before us.
In spite of the high proportion of subcommittee funding for
nutrition programs, the amount requested is below what it might have
been but for a couple of reasons. One is that fewer Americans are
relying on Food Stamps and similar programs due to a continuingly
improved economy. In March 1994 program participation levels reached an
historic level of 28 million persons. Today, that figure has improved
to a level of 24 million persons.
Another factor relating to the lower budget request is the passage
last year of The Personal Responsibility and Work Opportunity
Reconciliation Act of 1996, commonly referred to as Welfare Reform. I
look forward to the testimony of today's witnesses on the effect
Welfare Reform is having on their programs and their thoughts on
legislative proposals to modify certain parts of that law.
In addition to the budget requests for fiscal year 1998, this
subcommittee also is faced with a request for fiscal year 1997
supplemental funding for programs of the Food and Consumer Service. One
supplemental item is funding for the Nutrition Education and Training
Program. This program was previously included as mandatory spending in
the Child Nutrition account, but Welfare Reform converted this program
to discretionary spending. Since Welfare Reform passed subsequent to
the fiscal year 1997 Appropriations Act, the sequence of events
resulted in a shortfall for this program. I understand this request is
fully offset by mandatory spending in The Emergency Food Assistance
Program.
One other supplemental item is a request of $100 million for the
WIC program. Because of the importance of this program and the
complexity of its allocation system, I would like to provide for the
record an overview of why the supplemental request is before us.
WIC is, and has been, one of the most successful and popular
programs within the federal government. While there has been differing
opinions on funding levels for various USDA programs, support for the
WIC program has always been unanimous. Not only does the program serve
a most important constituency, women, infants, and children, it is also
proven to be cost-effective. USDA documentation has established that
for every $1 spent on the WIC program, $3 in Medicaid spending is saved
during the first 60 days after an infant's birth.
For many years now, the bipartisan goal for the WIC program has
been to achieve full funding in order that all eligible participants
who wish to apply, may receive assistance. USDA has projected full
funding will occur when participation levels can reach 7.5 million. I
am pleased to say we are clearly in sight of that goal and the budget
request before us will get us there.
Due in part to the rapid growth of the WIC program, in the range of
500,000 new participants a year, and the complexity of program
delivery, there has been an historic amount of funding remaining
unspent in one fiscal year yet available in the following year. This is
the so-called WIC carryover.
For reasons not entirely clear, the growth that was expected for
fiscal year 1995 did not fully occur. That year, caseload was expected
to reach 7.3 million participants but, in fact, it only reached 7.0
million. The result was a large increase in the carryover and a
question about the accuracy of future caseload projections. In turn,
USDA and OMB deemed it prudent to provide more conservative estimates
for program growth and therefore projected growth in fiscal year 1996
would reach a year-end figure of 7.3 million, the same level they had
predicted for the previous year.
Going into fiscal year 1997, USDA and OMB concluded that the
funding level provided by this subcommittee would not allow for program
growth, but it would be adequate to meet level participation needs.
However, that projection has proved incorrect for a number of reasons.
First of all, the rate of program growth resumed its pre-fiscal
year 1995 levels. Rather than a year-end level of 7.3 million, caseload
in fiscal year 1996 reached 7.4 million. In addition, WIC-related food
prices increased 1.1 percent above the budget forecast. As a result of
these two factors, the carryover available for obligation in fiscal
year 1997 is substantially below earlier assumptions.
By including the carryover from fiscal year 1996 with the amount
this subcommittee provided in fiscal year 1997, it is now estimated
that there is funding to support average participation this year of
slightly more than 7.2 million, 200,000 participants below the level
achieved by the end of fiscal year 1996. Since fiscal year 1997 started
out at a level of 7.4 million participants, USDA has concluded that
without supplemental funding, they will have to reduce caseload to 7.0
million in order to maintain an average of 7.2 million. As a
consequence, some states are now preceding with plans to reduce current
caseload, an effort directly counter to the long-held, bipartisan goal
of achieving full participation.
In spite of the reduction in carryover in WIC funds described
above, there is still a substantial sum of fiscal year 1996 dollars
that were unspent at the beginning of this fiscal year. Because of the
obvious irony of asking for a supplemental at a time when carryovers
occur, I believe it is important to enter into the record an overview
of how and why these carryovers occur.
Funds appropriated for the WIC program are available for
expenditures for two fiscal years. Due to a number of factors, USDA and
State WIC agencies do not know at the exact end of any given fiscal
year exactly how many dollars were spent. In fact, State WIC agencies
will not know these total amounts until a few months after the end of
the fiscal year.
One of the reasons for this delay is that many of the WIC vouchers
issued late in the year by state agencies are not redeemed and
reflected back through the accounting system until the fiscal year is
over.
It is further possible that all WIC recipients will not use all WIC
vouchers issued. It is not until after October 1 that all vouchers
issued in August and September are fully accounted for.
Another variable is the exact cost of the vouchers. The cost of a
particular voucher equals the price of the food item purchased by a WIC
participant on the day of the purchase. State agencies have no way of
knowing what that purchase price will be until after the vouchers are
redeemed and returned.
Another major item that controls WIC expenditures is the cost
containment aspect of the program as required by law. Cost containment
has been a very successful tool at reducing program costs and are
estimated to save approximately $1.1 billion annually. The cost
containment contracts also add, however, to the difficulty of expending
all available funds. A State generally cannot bill a manufacturer for
rebates for infant formula sold in September until after September is
over and the fiscal year has ended. A State may receive a check from an
infant formula company early in a fiscal year that represents rebates
for formula sold to WIC participants in the latter months of the
previous fiscal year. Such checks are considered funding for the prior
fiscal year. To the extent that such checks are not freely used to
defray WIC expense incurred in the previous fiscal year, the remainder
of the checks constitutes money classified as carryover money from the
previous fiscal year.
We must also remember that because State WIC directors do not know
exactly how much will be spent in any given year, they exercise prudent
caution in order not to overspend their state's allocation. It is not
uncommon for a state to withhold some of its allocation at the end of
the year to avoid the possibility of overspending. This should not be
viewed as an overly conservative practice, but rather a tool of sound
program management.
If all states average expenditures of only 97 percent of their
annual allocations, the total of carryover would equal $120 million. As
a guiding principle, USDA, State WIC directors, and the Congress should
recognize approximately $100 million as a reasonable and expected
carryover amount. This amount is often referred to as ``structural
carryover''. While it might be confusing to some who question a
supplemental request when there exists any carryover at all, it should
be noted that a ``structural carryover'' is a recognized an inherent
feature of program operations.
However, with or without the ``structural'' portion of the
carryover, we now find ourselves in the position that the carryover
currently available for obligation this fiscal year is below earlier
projections. When you factor in increased food costs, which are
provided in the Department's Explanatory Notes, along with the reduced
carryover from fiscal year 1996 we are, for the first time in about 15
years, faced with allocations to the states at a level insufficient to
meet previous year participation for many states.
I would also like to mention this supplemental request in the
context of the request for WIC funding in fiscal year 1998. In order to
attain the goal of full funding for WIC, a participation level of 7.5
million women, infants, and children, the budget asks for an increase
of $378 million. $100 million of that amount is reflected in the $100
million supplemental request. In other words, the fiscal year 1998
increase totals $378 million from the fiscal year 1997 level without a
supplemental.
Also, the $378 million increase includes another $100 million to be
held in reserve in the event of future unforeseen program expenses and
to avoid the need for additional supplementals. In addition, the
increase also includes amounts necessary to respond to food cost
inflation and to recapture the fiscal year 1996 carryover reductions
explained above. This leaves only a $25 to $30 million increase for
actual program expansion. This is the amount necessary to bring the
program participation from 7.4 million up to 7.5 million, which is full
participation.
I hope that this explanation helps answer questions some may have
about why the supplemental is needed, why there is a carryover, and how
the supplemental request ties in with the request for fiscal year 1998.
I offer it in full recognition of the budget constraints before this
subcommittee. I honestly believe that every member of this subcommittee
is fully committed to the goal of full funding for WIC, but I am a
realist and I know finding offsets will be difficult if the budget
process does not allow us to use the offsets identified in the
President's budget request.
In closing, I want to commend our guests for their fine and noble
work. I often hear from farmers who complain that our appropriations
bill has too little to do with real farming. When you look at the
amount of spending in our bill for food assistance programs, you know
what those farmers are talking about but you have to ask why they are
saying it. Domestic feeding programs mean that more of the farmers
products are getting to people who need them. Improved nutrition
information means consumers can make better choices and farmers can
better plan for improved markets. As long as there is hunger in
America, no one can dispute the purpose of your mission.
I know there are many other important programs within the Food and
Consumer Service that I will not take time here to touch on. I do note,
however, the funding request for the Food Program Administration. I
agree that your responsibility for $40 billion in program activity is
evidence enough for your need to retain adequate staff levels. Recent
action to crack down on fraud and trafficking are probably signals that
there is much more to be done. For these reasons, and others, we need
to fully consider your requests for staff needs as well as your ability
to conduct research on the changing nature of nutrition programs. In
this way, we may better understand the changes effected by Welfare
Reform and the economy generally and the implication of those changes
on your programs. I hope this subcommittee can be helpful in giving you
the tools necessary to do all these things.
WIC Participation and Supplemental Funding
Senator Cochran. Thank you, Senator Bumpers, for your
contribution to this hearing.
I am also interested in this supplemental request. I think
we need to go ahead and try to get as much information as we
can, so we can make a decision about the supplemental.
While there are excess funds in some of the accounts
because of changes in welfare reform, this is an account which
you indicate we are going to have a shortfall. And, I am still
a bit confused about the supplemental.
Are we trying to maintain the current level of
participation, or is this designed to increase the level of
participation to keep expanding the program?
Ms. Keeffe. The supplemental, Mr. Chairman, is to maintain
participation at the current level. Without those funds, we
feel that States will have to reduce caseload by approximately
400,000 persons by fiscal year end in order to get to that 7.2
number.
Senator Cochran. Senator Leahy asked you about the State-
by-State analysis, if you had information about where the
dropoffs from the program would occur. Is there a way to
determine how many participants you would lose in each State?
Ms. Keeffe. Let me just give a short answer, and I will
have Mr. Braley elaborate. I do not think we know precisely.
States are very well intentioned and feel that they are going
to be able to spend all the money that they have in their
accounts.
WIC State Plans
But we certainly have to look at what the record and
history teach us in the program, and how this program operates.
We feel by necessity they end up with a carryover at the end of
each fiscal year. I think this is very understandable.
But for them to take a position that, well, this year we
are not going to have that carryover, we are going to be able
to spend down every cent, I do not think is very realistic.
Mr. Braley. Mr. Chairman, to elaborate a little bit on the
Under Secretary's point, historically States have carried over
in the last 3 years between 3.5 and 4 percent of the funds that
have been appropriated to them.
The submitted plans indicate that they would reduce
carryover to less than 1 percent, about seven-tenths of 1
percent. That is unprecedented even in years when dollars have
been tight, as they are this year. We believe that about as low
as they could get would be about 2.5 percent of the total
grant.
The reason is that there are a lot of uncertainties. As for
example, States issue vouchers in the WIC Program toward the
end of the fiscal year, it is not until the next year that
those vouchers are redeemed and they actually know what their
obligations are.
Similarly, States have rebate contracts with infant formula
companies, and they do not receive the proceeds from those
contracts until the next year.
The consequences of overspending are severe for a State, so
they tend to underspend slightly, even though in their planning
at this time of year they typically say, well, sure, I can
spend everything that is available.
We have taken the carryover amounts that we expect to carry
from last year into this year, which were about $145 million,
and, recognizing that funding is tight this year, reduced that
to about $100 million, about a 30-percent reduction.
WIC Participation
Even with that drawdown, we believe States can serve only
an average of 7.2 million participants this year. Therefore, by
the end of the year, because States started way above that
figure, they are going to have to come down to about 7 million
participants, unless the supplemental funding is provided.
The reason for the supplemental is to maintain
participation levels that were achieved at the end of fiscal
year 1996 and the beginning of fiscal year 1997.
In the reports we have just received, nine States reported
a participation reduction in excess of 5 percent, even if they
anticipated spending the full amount of the resources
available. I can either read those now or provide them for the
record.
Senator Cochran. I think providing them for the record will
be helpful to us, and will give us a chance to review them and
try to make a determination about the response the subcommittee
ought to make.
[The information follows:]
WIC: States with estimated participation decreases greater
than 5 percent: Minnesota, New Mexico, Arkansas, Massachusetts,
Nebraska, Louisiana, West Virginia, Alabama, and Hawaii.
Funding sources
Senator Cochran. Is there a suggestion as to where the
additional funds should come from. In this budget process here,
when we add funds over and above what we are allowed, we have
to take it from some other accounts. What is the recommendation
of the administration as to where we take this money from?
Mr. Braley. My understanding is--and maybe Mr. Kaplan can
correct me, if I am wrong on this--one-half of the offset was
from Public Law 480 programs within the Department of
Agriculture, and the other one-half was elsewhere in
Government, but not specified. There was an offset for all of
the supplementals that were planned Governmentwide. So one-half
of it is within the Department, and the other one-half is in a
more general category.
Senator Cochran. Mr. Kaplan, is that the way you did it?
Mr. Kaplan. Yes, sir.
Senator Cochran. Well, I am curious about that. Because,
for example, I notice in the food stamp budget proposal here
there are proposed changes in the law that would result in more
appropriated dollars for the Food Stamp Program than if we do
not change the law as recommended. That is, if the authorizing
committee does not change the law--that is not the
responsibility of the Appropriations Committee.
But, if the authorizing committee does change the law to
add benefits under the Food Stamp Program, as I understand the
budget process, it will have to make other changes in the law
in some other area to offset the additional cost of those
benefits.
Is there in the budget submission any suggestion as to what
changes in the law ought to be made by the Agriculture
Committee to reduce the cost of the programs under its
jurisdiction at the same time you are asking it to change the
law to increase the cost of the Food Stamp Program.
Mr. Kaplan. No, sir; just the increases that are in the
President's budget.
Senator Cochran. OK. Well, it is an interesting exercise,
is it not, that you can submit a budget, if you are the
administration, and presume these changes to increase spending
and make people happier. To tell people that they are going to
get more money from the Federal Government, but not tell them
the other side of the coin, which is that if these changes
really are made under existing law, there are going to have to
be changes in other programs to pay for them.
But you do not want to tell the beneficiaries of those
other programs that they are going to get less, because you are
going to take those funds and give them to food stamp
beneficiaries who will be given new benefits.
Ms. Keeffe. Mr. Chairman, I think it is fair to say in this
discussion that the President is committed to a balanced
budget. The changes that he has recommended in the Food Stamp
Program are part of his balanced budget submission.
Senator Cochran. I understand that he has talked about the
fact that the budget is a balanced budget, but no one agrees
with him who is keeping the score, at least no one who
understands the trigger that calls for all the big cuts to come
in the last couple of years of the budget cycle and the tax
increases that would be required to be imposed to balance the
budget.
If you just look at the changes in programs, the changes in
obligations of the Federal Government, it does not come out
that way. Only the automatic, so-called trigger, makes it a
balanced budget. I think that is an appropriate summary
description of the budget that has been submitted by the
President.
I am trying not to get into the macroanalysis of the
budget, as they are doing on the Budget Committee. I would
rather let Pete Domenici discuss that with Mr. Raines or
others.
What we are interested in is what we have to do on this
subcommittee and what the Agriculture Committee has to do with
respect to proposed changes in the law. It just seems that the
requests that we have gotten are to increase spending for
programs that are very popular with the beneficiaries, but we
never tell anybody that if you do that, you must cut spending
somewhere else.
Changes in the Food Stamp Program
I was just curious if you had any suggestions specifically
about what programs to cut. The changes that you are
contemplating in the food stamp area I understand relate to
work requirements and to those who might be terminated who now
are getting benefits because of immigrant status.
Are those the main changes that are requested in the Food
Stamp Program?
Ms. Keeffe. Well, there are several areas, Mr. Chairman. I
am going to ask Ms. Jackson to go into greater detail.
Ms. Jackson. Mr. Chairman, you are correct that one of the
major changes is a change to basically change the work
requirement for able-bodied adults between the ages of 18 to
50, to try and create what the administration feels is a real
work requirement by increasing work opportunities through
increased employment and training funding for States; by
changing the time limit from 3 and 36 months that a person
could receive benefits without working to 6 and 12 months; also
by strengthening the penalties against individuals who refuse
to work; and by also giving States more flexibility to use the
food stamp benefit as a wage subsidy to encourage more private
employment.
In addition to that proposal, there are also proposals to
eliminate the excess shelter deduction cap by the year 2002, to
help families with children who have heavy housing and heating
expenses. There is also a proposal to resume indexing the
standard deduction by the year 2002 to prevent further decline
of the actual value of this deduction.
There is also a proposal to raise and index the vehicle
fair market value exclusion, recognizing that in order for
people to work, they have to have reliable transportation.
So all of these are included in the proposal.
The one area relating to legal immigrants is a proposal for
the 1997 budget. We propose to postpone the implementation of
the restrictions for legal immigrants from the August 22
deadline, which is currently set in law, to September 30.
The idea there is to give individuals who are already
applying for citizenship more time to become naturalized. But
there is no proposal for legal immigrants and food stamps
beyond 1997.
Food Stamp Error Rates and Payment Accuracy
Senator Cochran. There is a statement in your submission
about the error rates and the fact that you have made some
progress in working with States to improve payment accuracy.
Could you tell us how you are working to deal with this
problem, and what are the reasons for this success in bringing
the error rate down?
Ms. Jackson. Well, we were very concerned, Mr. Chairman,
that during fiscal years 1992 and 1993 the national error rate
increased in the Food Stamp Program. We instituted some
partnership programs with States and, through our regional
offices, targeted States with very high error rates.
We also sponsored a national payment accuracy conference to
try to raise the consciousness level, particularly of top
management in States, about the need to focus on payment
accuracy.
We were given additional funding to provide State Exchange
money to States. This funds transportation for them to travel
to other States that had been very successful in reducing their
error rates, to see firsthand what types of initiatives and
programs they established.
All of these various activities have been very successful
in allowing us to reduce the payment error rate. The high rate
that we had in the program was in fiscal year 1993, where the
error rate went all the way up to 10.81 percent. That is both
underpayments as well as overpayments.
We were able to reduce that error rate down to 10.32
percent in fiscal year 1994 and then 9.72 percent in fiscal
year 1995. Those reductions over those 2 years, from 1993 to
1994 and then again from 1994 to 1995, resulted in savings to
the American taxpayer of over $350 million.
We are pleased that early results from the 1996 data show
that we are still in that downward trend.
Senator Cochran. Well, that is good news. I had heard about
that and wanted to bring it out and urge you to continue to use
your good judgment and imagination on how to deal with that.
Ms. Keeffe. Mr. Chairman, this is an area, that really
exemplifies the Federal Government and the States working
cooperatively to achieve this positive story. We were the
impetus behind this, and we did have this funding earmarked to
move aggressively in this area, but it is really the States
that have turned this around. I think it is a very positive
story.
Food Stamp Program Contingency Reserve
Senator Cochran. As a result of welfare reform, there is a
suggested new importance for the Food Stamp contingency
reserve. Your statement indicates that $2.5 billion is
requested for a contingency reserve.
Could you tell us if you have done any assessment on how
the program funding requirements might fluctuate, given the
choices States make concerning the level and form of benefits
provided and waivers requested under welfare reform?
Ms. Keeffe. Well, I think that one of the rationales for
requesting the contingency is welfare reform and its
uncertainties. The amount we requested really is not too large.
It translates into 6 weeks' worth of Food Stamp benefits.
Another reason for the contingency fund is the situation we
are in right now. It does not have anything to do with welfare
reform, but disaster flooding and emergency food stamp
issuance. This is an area where the contingency is also very
helpful. We have been faced with a number of serious disasters
in recent years, and it is helpful to have contingency funding.
The combination of potential disasters, coupled with the
uncertainties of welfare reform, made us think that this was
not an outlandish amount to request.
Senator Cochran. Well, in 1997 we had a $100 million
contingency reserve. Will that $100 million be needed?
Mr. Braley. Mr. Chairman, we do not anticipate needing it.
I know you have been with this committee for a number of years,
and it was not too many years ago that we consistently needed
food stamp supplementals.
We started requesting the contingency reserve because it is
difficult to predict exactly how much the Food Stamp Program is
going to cost.
Especially with welfare reform this year, we thought it was
particularly critical to have a significant contingency reserve
in case some of the estimates are wrong or in case some things
happen in the economy that would cause that to happen.
It is a year of a lot of change and uncertainty. The
reserve is even more important than it has been in the last
several years, from our perspective.
Disaster Assistance in the Food Stamp Program
Senator Cochran. What is the outlook, if you know, about
the natural disaster impact on food stamp dollars in fiscal
year 1997?
Mr. Braley. Mr. Chairman, we are just really getting
disaster efforts underway in States, so it is a little early to
tell. Mr. Ludwig may want to comment further on that.
Mr. Ludwig. Mr. Chairman, we are early in the year, but I
will speak about what we have going right now. Then I will talk
briefly about what we have had in previous years.
As of this morning, I have authorized emergency food stamps
for 12 counties in the State of Arkansas.
Now, those are not entire counties, but are segments of the
counties that actually had destruction. We approved four
counties in Arkansas Saturday morning, and the additional eight
last night. So we do have 12 counties there.
I am expecting to receive requests from both Ohio and
Indiana. We do not know, since we have not received the
request, exactly how many counties are going to be affected.
One of the problems with a flood, as it all moves south and
downstream, is that there is more flooding.
Until an area is actually cleared of the water, it is hard
to determine what portions of counties were affected. We are
expecting the aforementioned two States to come forward.
On more of a global basis, and speaking from last year's
history, we have not moved yet into hurricane season. Last year
we had an unprecedented number of hurricanes on the east coast.
We are also looking at additional flooding due to the vast
amounts of snow that fell throughout the Midwest.
So in the long-term projections, between the snow and the
hurricanes, we believe we will have quite a year for disasters.
The last 2 years we have had a significant number.
Natural Disaster Spending in the Food Stamp Program
Senator Cochran. Do you know how much funding in each of
the last 2 years has been required in the Food Stamp Program as
a result of natural disasters?
Mr. Ludwig. I can get that number for you. We have it.
[The information follows:]
In fiscal year 1995, the Food Stamp Program spent zero
money on disaster response. In fiscal year 1996, the Food Stamp
Program issued $64,888,920 worth of benefits responding to
three disasters: Hurricane Marilyn in the Virgin Islands, the
floods in the Pacific Northwest, and Hurricane Fran in North
Carolina.
Senator Cochran. Yes; that would be good to just have in
the record what we spent in 1996 and in 1995. I know in 1997,
we have had these tornadoes and floods already. We have read
about and seen broadcast reports of the damages and the
terrible problems that victims have had in coping with those
disasters.
I know in my State I think nine counties have now been
designated eligible for some form of Federal disaster
assistance. I do not know whether the food stamp benefits are
included in that or not.
But if they are, we certainly do not want to turn around
and find out we do not have the money to make those available
and we have to rush through a supplemental, and maybe the
Congress will be out on a recess or whatever.
I do not want to run into a situation where we do not have
the funds to respond quickly to these emergency situations.
That is why I am asking these questions about the contingency
reserve.
You know, one thing I do remember, Mr. Braley, and I know
you do as well, the tendency of some who are in leadership
positions on Appropriations to intentionally underestimate in
the annual appropriations bill funds that would be needed for
mandatory programs to build in the necessity for a
supplemental. It was just part of the process in years past.
That is probably not a good budget practice and we would be
criticized today if it were done. But who knows what these
costs are going to be. They are estimates, as we are all
acknowledging here.
We do not know what the natural disasters are going to
cause in terms of outlay responsibilities for food stamps. And
there are many other areas in this part of the appropriations
bill where we are just not able to exactly predict what the
needs are going to be.
I think the submission, insofar as you can do it, is
straightforward and we appreciate that very much. And we commit
to you that we will endeavor to work with you to help satisfy
these needs that we have under the law.
Many of these are mandatory programs. We do not have a
choice about making the payments available. If people are
entitled to benefits under the law, we must fund the benefits
that they are entitled to. So this committee is going to
cooperate with the administration in that regard.
Welfare Reform and the Contingency Reserve
Let me ask you one other question about the contingency
reserve. Does the fiscal year 1998 request rely solely on the
contingency reserve to accommodate any increased cost resulting
from the choices States might make under welfare reform?
Ms. Keeffe. That certainly was something that we were
trying to anticipate in making that request. The $2.5 billion
benefit reserve is about 10 percent of the total food stamp
money.
Our most basic assumption is a continued good economy.
There is no reason to think otherwise. We cannot assume how
States are going to react in regards to TANF and that part of
welfare reform which would then trigger changes in food stamps.
With those questions, we came up with the basis for our
request.
Electronic Benefits Transfer and Fraud Reduction
Senator Cochran. In connection with the electronic benefits
transfer, I know Senator Leahy asked you how that was going.
In your prepared statement, Mr. Ludwig, you mentioned that
eight States now have these systems in place for the delivery
of food stamp benefits. Ten others have already implemented the
system, and every other State is in the process of planning for
or implementing the system. Do you have any feedback yet on the
extent to which these systems are working to improve efficiency
and to reduce fraud?
Mr. Ludwig. Yes, sir; we do have some preliminary results
on those issues. Three years ago, internally we began a major
initiative to get States to implement EBT. As we stated
earlier, today we have 18 States in pilot status. In excess of
40 States are in some type of major development process right
now.
EBT does not eliminate fraud. But it gives us the ability
to track individuals or retailers that are committing fraud.
With the paper coupon, we do not have any processes to know
where those coupons go and how they ultimately get to the
street.
With EBT we have an electronic tracking system that shows
when benefits are redeemed, where they are redeemed, and for
what amounts they are redeemed.
We are in the process of piloting a new software program,
ALERT, that statistically gives us the results of individual
stores with probabilities of which stores are trafficking. The
system targets stores based on the store size in comparison to
other stores in similar situations and their redeeming
processes, so that we can decide from our compliance standpoint
and from the OIG standpoint, which stores we should visit.
So yes, we are getting positive feedback. Two years ago, we
had 225,000 stores redeeming food stamp benefits. Today we are
down to approximately 196,000 stores. We think there is a
combination of reasons for that, EBT being one and our stepped-
up compliance efforts another.
EBT: Savings and Costs
Senator Cochran. There is an indication in your request
that there is a reduction in the cost of printing and shipping
and processing stamps as a result of the development of the
electronic benefit alternative. What is the potential savings
in this area when all States have implemented their EBT
systems?
Ms. Jackson. Right now the total cost in printing and
distribution is $49 million. So we would be able to realize,
once all States are operational, almost that entire amount in
savings in terms of the current printing contract and all of
the related expenses in distributing the coupons.
Senator Cochran. What level of funding, if any, is included
in the request for this next year for work on the electronic
benefits transfer of Food Stamps? Are there Federal costs
associated with expanding this program and putting it on line
in every State?
Ms. Jackson. We are matching State costs at a 50-percent
match rate. So for every dollar spent by a State, we are
matching that with a dollar in Federal funds to encourage the
expansion of EBT.
Regulation E
Basically in the past, the biggest complaint that we heard
from States as to why they were moving slowly in implementing
EBT was because they were fearful of potential increased costs
of regulation E. Welfare reform legislation basically
eliminated regulation E from State EBT systems. So those
increased costs that States were concerned about no longer
exist.
So we think that States are going to continue to move very
rapidly. And as I said, we are matching their administrative
expenses at a 50-percent match rate.
Senator Cochran. What is regulation E?
Ms. Jackson. Regulation E regulates how debit and credit
cards work today. If you take, for example, an ATM card and
lose it, as long as you report the loss within 48 hours, you
are not liable for any more than the first $50 of loss. That
also applies for most consumer credit cards today.
The Federal Reserve Board once had ruled that regulation E
would also apply to EBT cards. That was a huge concern for
States because of the fear that fraud and abuse would basically
dramatically increase State costs. Those costs would be carried
by the card issuer, and, in this case it would have been State
governments.
Welfare reform legislation ruled that State EBT systems
were not subject to regulation E. Therefore, the potential
increased costs that concerned States are no longer an issue.
We feel that was one of the last remaining big barriers to EBT
implementation.
Senator Cochran. Who bears the loss, if there are losses?
Ms. Jackson. Right now, because of the legislation,
basically the cards will work the way food coupons work today.
The recipient is responsible.
However, there are more protections with EBT than with the
food coupons. Right now if a recipient loses his or her
coupons, except for extenuating circumstances, such as a
disaster, they are not replaceable. They are treated like cash.
The EBT card, however, is protected because it has to be
used in conjunction with a personal identification number. As
long as a person does not do something foolish, like write that
PIN number on the card--and they are specifically instructed
not to do that--a lost EBT card basically should be nonuseable
as long as the person has not publicized their personal
identification number.
So that is the added protection that the EBT system
provides to our customers. It is far more secure against theft
and loss than coupons.
WIC Funding Request
Senator Cochran. The WIC supplemental funding request of
$100 million we have discussed. I think we ought to fully
understand the estimated shortfall. If I understood what you
said, we would lose 400,000 program participants if we did not
approve the $100 million supplemental, is that correct?
Ms. Keeffe. Yes; that is our assumption based on the
numbers.
Senator Cochran. Because I had heard another number from
Mr. Braley on some subject, but that was not this number
dropoff.
Mr. Braley. No; the reduction that we expect to experience
would be about 400,000, from about 7.4 million down to 7
million participants.
Senator Cochran. OK. I have some other questions on the WIC
request. I understand $4.108 billion is the total request for
the full 1998 fiscal year, which represents an increase of $378
million over fiscal year 1997, and, I understand from your
testimony, that would achieve full funding of the WIC Program
by the end of the fiscal year--some 7.5 million participants.
Ms. Keeffe. That is correct.
Senator Cochran. And that includes the increased
participation, as well as a $100 million contingency fund if
food costs exceed budget estimates.
Ms. Keeffe. Yes.
Senator Cochran. As you know, WIC is a popular program. I
expect that we will do everything possible to try to ensure
that there is full funding.
WIC Effectiveness
There is no question about the efficacy in terms of health
cost savings and improved learning capacity and just general
well-being that is a cost savings in other programs, as a
result of the WIC Program.
I think our hearings have clearly established that over
time. The access to clinics and the immunizations, which many
times are administered at or near the WIC clinic sites, are
very, very important in the overall health of the population
that is served by the program.
Ms. Keeffe. Well, you have stated it very well, Mr.
Chairman. Of course, we are deeply appreciative of your support
in the past, as well as that from the entire committee. I think
everyone has recognized what we say--in short, WIC works. It is
a wonderful program.
We have research that demonstrates its success. It is also
a program that has been managed effectively over the years. It
has received high marks in that regard.
So we are very close to our goal. We really are hopeful
that we will be able to have the supplemental for 1997, as well
as the funding request for fiscal year 1998.
WIC Eligibility Standards
Senator Cochran. I know it is very subjective to make the
determinations that are necessary to establish eligibility for
participation. There is just no exact science in place to
measure against any set of standards to determine nutritional
risk, for example, which is part of the process to determine
eligibility.
Are you satisfied that the guidelines are sufficient and
the practices are to the point where you can say that there is
little or no abuse of this program in falsifying things like
nutritional risk or just making subjective judgments that are
not based on facts?
Ms. Keeffe. Well, this is an area that we are continuing to
investigate. We would like to see more intra-State uniformity
in regard to the nutrition eligibility standards. Our Office of
Analysis and Evaluation is planning a report on this.
We have also been working with the National Academy of
Sciences that also has researched this area. We are not
entirely comfortable that there is not much uniformity.
We do not know of any instances of terrible abuse; however,
we are trying rather aggressively to establish more uniformity.
WIC Cost Control
Senator Cochran. In our State of Mississippi, John Barr has
been one of the leaders in the Nation at State administrators'
organizations and in developing new ways of keeping costs down
and administrative overhead under control.
I wonder why we continue to see nationwide though,
administrative expenses that are a high percentage of the
total, or the average, cost of the WIC food package. I
understand that it is now about 26 percent. Is that high or
low? Should we be happy with this? It seems to me that that is
too high.
Mr. Braley. Well, Mr. Chairman, those costs include
traditional administrative costs comparable to those in other
programs like food stamps, and a lot of nutrition services and
referrals to other health programs, provisions of nutrition
education, and a whole host of activities under the nutrition
services and administrative grant heading. So, to call those
funds strictly administrative understates what is really
provided by those funds.
The other thing that has happened is the tremendous success
we have had in reducing food package costs through infant
formula rebates. We have realized a $1.1 billion influx or
recycling of funds in the WIC Program through these rebates.
That has had the effect of lowering the cost of food per
person, which makes the percent of dollars spent on nutrition
services and administration go up compared to funds spent on
food.
So it is certainly an area that we continue to look at and
work with States. The States would indicate that they are doing
a lot with those resources and that the program is not
overfunded.
WIC Funding Formula and Participation
Senator Cochran. There is a request in your budget that the
bill include language, our appropriations bill include
language, authorizing the Secretary to adjust allocations to
the States to reflect food funds spent forward and to make
other funding formula revisions.
I am, quite frankly, reluctant to recommend that the
committee do that without knowing what the practical results
will be. Do you have any notion now as to who the winners and
losers would be under such a formula change?
Mr. Braley. Well, Mr. Chairman, I think there are two goals
that we want to achieve. If we had a supplemental for this
year, we want to mitigate the effects in caseload in those
States which would have to make dramatic reductions so that
high-priority participants are not forced off the program.
In 1998, I think the emphasis shifts from that approach to
also recognizing that some States have had an opportunity to
grow and reach a fairly good saturation level in terms of
serving the eligibles in their State.
We would like some flexibility to try to target some of the
States that have lower than average participation rates but
still protecting existing participation levels in other States.
That is a little bit of a roundabout answer, and I cannot
give you the specific States that would be winners and losers
under that, because it would be something we would have to
judge based on what has happened up to that point in particular
States with regard to how much money they have used and how
many participants they have served.
We feel we do need some flexibility outside of the existing
funding formula to minimize the adverse effects in some States
and also make sure that other States have an opportunity to
grow and reach full potential.
WIC Participation Rates
Senator Cochran. As a matter of curiosity, do you have any
notion as to which States are those States that you describe as
having a lower rate of participation than others? Could I guess
Idaho, Utah, North and South Dakota?
Mr. Braley. We do have information in terms of the
estimates of eligibles in each State and what percentage of
those eligibles are served in the current program.
I think some of the Western States do have less
participation among eligibles than some of the Eastern States.
But there is quite a bit of variation. We could certainly
provide that information for the record on a State-by-State
basis.
Senator Cochran. That would be good to have, just as a
matter of curiosity.
Mr. Braley. Yes, sir.
[The information follows:]
Rates of Participation (by State) Among WIC Eligibles
The Food and Consumer Service (FCS) annually estimates the
number of women, infants and children who are both income-
eligible for WIC and at nutritional risk at the National level.
National participation rates are then calculated relative to
this estimate of the fully-eligible population.
FCS also develops estimates of the number of infants and
children who are income-eligible for the program by State.
These estimates, which are provided annually to the States, are
produced primarily for use in the WIC funding formula to
determine each State's share of the National estimated income-
eligible population. Estimates of income-eligible pregnant,
post partum and breastfeeding are typically not developed for
use in the funding formula. Because women are estimated as a
direct function of income-eligible infants, their inclusion
would not have a significant impact on the percentage
distribution of eligibles among States. In addition, FCS does
not attempt to make estimates of the incidence of nutritional
risk at the State level, as accurate data on State-specific
incidence of nutritional risk is not available.
In order to address your question, the Agency has
calculated the number of income-eligible women in each State
for 1994 (latest data available), assuming the same
relationship between the number of income-eligible infants and
income-eligible women as is used for developing National
estimates. These estimates were added to the estimated number
of income-eligible infants and children to create State-level
estimates of the total income-eligible population in 1994.
These estimates were then compared to average monthly
participation by State in order to estimate participation rates
among the income-eligible population in 1994.
While these data can provide some indication of the
relative coverage of the WIC program by State, they cannot be
considered true coverage rates because they do not factor in
the incidence of nutritional risk. Further, they are not
directly comparable to the National WIC coverage estimates
produced by FCS, which are based on the fully-eligible
population estimate.
[The information follows:]
RATES OF PARTICIPATION (BY STATE) AMONG WIC ELIGIBLES--FISCAL YEAR 1994
----------------------------------------------------------------------------------------------------------------
Percent of
income-
Income- Monthly eligibles
State eligibles average served
estimate \1\ participation (coverage
rate)
----------------------------------------------------------------------------------------------------------------
Alabama......................................................... 177,042 122,328 69
Alaska.......................................................... 32,432 15,882 49
Arizona......................................................... 229,461 115,676 50
Arkansas........................................................ 112,701 87,829 78
California...................................................... 1,824,764 897,706 49
Colorado........................................................ 118,844 69,556 59
Connecticut..................................................... 86,553 65,244 75
District of Columbia............................................ 36,101 17,656 49
Delaware........................................................ 23,019 15,838 69
Florida......................................................... 598,798 299,907 50
Georgia......................................................... 317,542 210,799 66
Guam............................................................ 10,909 5,572 51
Hawaii.......................................................... 50,389 24,846 49
Idaho........................................................... 49,864 31,849 64
Illinois........................................................ 458,152 232,338 51
Indiana......................................................... 215,141 134,428 62
Iowa............................................................ 85,964 60,379 70
Kansas.......................................................... 95,283 58,609 62
Kentucky........................................................ 164,481 115,677 70
Louisiana....................................................... 230,522 122,200 53
Maine........................................................... 38,239 27,281 71
Maryland........................................................ 143,210 83,678 58
Massachusetts................................................... 149,391 111,288 74
Michigan........................................................ 398,543 207,614 52
Minnesota....................................................... 130,165 93,721 72
Mississippi..................................................... 155,478 103,560 67
Missouri........................................................ 217,997 121,651 56
Montana......................................................... 32,934 19,898 60
Nebraska........................................................ 48,541 34,791 72
Nevada.......................................................... 52,287 27,527 53
New Hampshire................................................... 23,412 19,437 83
New Jersey...................................................... 193,556 139,176 72
New Mexico...................................................... 107,632 51,915 48
New York........................................................ 834,469 437,735 52
North Carolina.................................................. 296,137 177,250 60
North Dakota.................................................... 21,536 18,146 84
Ohio............................................................ 395,560 252,653 64
Oklahoma........................................................ 151,563 89,627 59
Oregon.......................................................... 110,199 76,947 70
Pennsylvania.................................................... 388,848 260,398 67
Puerto Rico..................................................... 425,143 170,391 40
Rhode Island.................................................... 33,005 20,624 62
South Carolina.................................................. 168,471 120,915 72
South Dakota.................................................... 28,738 22,910 80
Tennessee....................................................... 235,378 131,632 56
Texas........................................................... 1,055,151 614,694 58
Utah............................................................ 84,600 55,387 65
Vermont......................................................... 19,974 16,136 81
Virgin Islands.................................................. 8,781 7,552 86
Virginia........................................................ 198,132 126,798 64
Washington...................................................... 186,969 101,637 54
West Virginia................................................... 81,256 52,268 64
Wisconsin....................................................... 137,611 107,088 78
Wyoming......................................................... 17,008 12,256 72
----------------------------------------------------------------------------------------------------------------
\1\ This estimate does not include persons who become adjunctly income-eligible through State Medicaid programs
with eligibility standards over 185 percent of poverty.
WIC Funding Formula
Senator Cochran. Of course, those would be States that you
would give more money to under your new plan.
Mr. Braley. The funding formula that we developed was
developed at a time when WIC participation and funding was
growing dramatically from year to year. We have reached the
point now where funding is relatively stable.
As a result, this year, for the first time, we were not
able to meet last year's grant levels plus inflation in States
because the resources were not there. That meant everybody was
treated exactly the same as they had been historically in terms
of being able to maintain participation. If we had some
additional funding, it would have been nice to recognize the
fact that some States have not had an opportunity to reach
their potential. That is one factor which would be considered
in making allocations under the budget request.
Senator Cochran. Do you think some of these reasons are
societal or cultural and there is less willingness to admit
that you need to depend on the Government for help, or can you
look to your neighbors, or to the churches or the community to
help you meet those needs? Is that part of the reason why we
have those differences among States?
Mr. Braley. Well, that may be a part of it. But, Mr.
Chairman, what we are looking at is that some States are now
using all of the resources that they have available to them.
They are serving a smaller proportion of their State's
eligibles than their neighboring States and have indicated that
they have more people that could potentially be served if the
resources were available. We are not trying to encourage States
to take money that they cannot effectively use to serve
additional clients. Any resources we get would be targeted to
States who have a demonstrated ability to use that money to
serve eligible clients.
WIC Participation Variation Among States
Senator Cochran. Well, it would be helpful to have your
analysis and explanation in writing for the record to set out
what you have learned over time and where we are in the
recognition of differences among States and why they do or do
not participate in the program, and why some participate more
than others. That would be helpful to know.
[The information follows:]
There are numerous reasons why States would have varying
degrees of participation among their eligible populations.
Historically, States have varied in the degree to which they
have emphasized development and expansion of the WIC program
since its establishment in 1972. Those States which emphasized
WIC expansion at an earlier stage generally were funded at
relatively higher levels than other States. More recently,
States have differed in their ability to develop infrastructure
and conduct outreach in order to reach more of their eligible
population. In addition, States' per-person costs can vary
substantially. States with relatively low costs for example
due, to higher infant formula rebates, are able to serve more
persons with the funds available to them.
In 1995, the formula used by FCS to determine State's WIC
food grants was revised, in part to better target funds to
States which have been underfunded relative to the size of
their eligible population. The formula defines each State's
``fair share'' of total available funds as equal to their share
of the estimated total population of income-eligible infants
and children. After providing each State funds equal to the
prior year grant plus inflation, the formula targets all
remaining funds to States which are under their ``fair share''.
Senator Cochran. You suggest, without saying so, that you
may be submitting a new regulation in this connection. You
indicate, for example, that this legislative discretion to
revise the funding formula is needed in recognition of the time
needed for a regulatory change, et cetera.
So you are contemplating, I presume, making a change in the
regulation, is that not correct?
Mr. Braley. That is correct, Mr. Chairman. I think we need
to do that in recognition of the fact that the dynamics of the
program have changed as it is reaching full funding levels. The
last time we wrote a regulation governing the funding formula,
it was when we were foreseeing continued growth for a number of
years in the program. I think the dynamics of the situation now
warrant at least a reopening of that issue, although we could
conceivably come out somewhere near where we are now. But I
think the circumstances have evolved to a point where it is
time to reopen that question.
WIC and Native Americans
Senator Cochran. Are these program dollars available on
native American reservations and through tribal organizations?
Mr. Braley. They are, Mr. Chairman. Over 30 of the State
agencies that we speak of when we talk about 86 or 87 State
agencies in the WIC Program are organizations that serve native
Americans. They function as independent tribal organizations in
administering the WIC Program.
Senator Cochran. Do you see any differences in the
administration of the program in terms of overall costs or
participation levels among those groups as you do among the
population at large?
Mr. Braley. Mr. Chairman, I have not looked at the specific
figures. I imagine the administrative costs in some of the
smaller organizations could be slightly higher just due to
economies of scale.
I think in terms of being responsive to the needs of the
native American populations that they are serving, I think they
are quite effective.
Senator Cochran. I assume then that you are going to
proceed with a regulatory change so that even if we provide you
with some language that you would find helpful, that would be
only an interim authority. You would proceed with the
regulatory change in any event.
Ms. Keeffe. That is correct, Mr. Chairman. But as you know,
going through the regulatory process takes time. That is why we
are requesting an immediate change through the appropriations
process.
WIC Infant Formula Rebates
Senator Cochran. You may have answered this awhile ago. You
were talking about the infant formula rebates. Has the
Department taken action through the regulatory process on this?
Do you have a regulation on that now?
We included legislative authority in the appropriations
bill last year to ensure maximum cost savings from infant
formula rebates, that infant formula rebates be awarded on the
basis of lowest net wholesale cost.
In our report, we indicated that we were acting on an
interim basis and encouraged the Department to utilize the
rulemaking process to address the issue on a permanent basis.
Has that been done?
Mr. Braley. That regulation is in clearance within the
Department, and we hope to issue it in the near future.
Senator Cochran. What savings, if any, can you identify
from competitive bidding for the purchase of infant formula for
WIC participants over time, from 1995 to 1997, for example? How
many participants have been funded as a result of savings in
each of these years?
Ms. Keeffe. Currently, Mr. Chairman, we estimate $1 billion
annually is saved or comes back into the program through
rebates, and that the savings accounts for approximately 24
percent of WIC participants.
WIC and Child Immunization
Senator Cochran. Do you know what increase in child
immunizations can be attributed to the WIC Program? I mentioned
that in some of my comments about the program. Do we have any
kind of quantitative analysis of that?
Ms. Keeffe. I do not have a figure available with me, but
we certainly can look into it. It is an area where the program
has been very aggressive. We will certainly be glad to submit
it for the record, if there is a figure or at least an estimate
in that regard.
[The information follows:]
While the Centers for Disease Control and Prevention (CDC) data
suggest that immunization coverage rates are at an all time high, the
data is not sufficiently detailed to be able to specifically attribute
the increase to a particular initiative or program such as WIC.
Nevertheless, given the many activities and cooperative efforts
underway in the WIC program, and CDC's special emphasis on using WIC as
a major conduit to a large segment of the target population, it would
be reasonable to assume that WIC is instrumental in facilitating major
positive impacts on coverage rates. CDC has made the assertion that WIC
is one of its most important allies in raising and maintaining
immunization coverage rates. In fact, CDC has suggested that WIC may
have been instrumental in the control of the 1989-91 measles epidemic.
WIC program administrators at all levels agree that one of the
major public health challenges of this decade is a need to improve our
Nation's capacity to deliver age-appropriate immunizations to infants
and young children in need. As an adjunct to critically needed health
care, the WIC Program plays a large role in the public health
community's response to immunization promotion. While applicants may be
prompted to come to the WIC clinic just for food help, they are also
provided WIC nutrition education and enter a gateway to health care
services through WIC referrals. Among these services are immunization
screening and referrals. As the largest single point of access to
preschool children nationally--reaching about 45 percent of all
infants--WIC can make and is making a positive difference in the health
and well being of low income children.
The FCS and CDC have developed and maintained a strong partnership
with State cooperators in WIC and immunization to improve the quality
of services and the health status of children under 2 years of age who
are in need of nutrition assistance and immunizations.
To help raise and sustain high immunization coverage rates,
numerous special WIC immunization promotion activities are taking place
at the National, State and local levels. All WIC State agencies
(including territories and Indian Tribal Organizations) are actively
involved with immunization promotion activities. These activities range
from comprehensive immunization screening and referral procedures and
media campaigns to providing incentives and sending immunization
reminders to clients. Some WIC agencies have expanded clinic hours to
include immunization screening and others have formed immunization
promotion task forces and committees. Many offer on-site immunizations
for the convenience of families.
As a result of these initiatives, the WIC Program has been and will
continue to be a major contributor to the current high levels of
immunization coverage among low income children in the United States.
Just over the past year activities have included:
--The National Association of WIC Directors (NAWD), the Association
of State and Territorial Health Officials (ASTHO), CDC, and FCS
co-hosted a WIC immunization promotion conference, entitled
``Working Together for Healthier Children,'' February 12 and
13, 1997. The conference fostered positive communication at the
State level between Immunization Programs and the WIC Program
by: increasing understanding of each programs' goals and
objectives; and highlighting win-win situations in State and
local WIC and immunization partnerships. The conference also
focused on State WIC Directors' and Immunization Program
Managers' concerns.
--FCS, CDC, NAWD, and ASTHO have formed the WIC/Immunization Research
and Evaluation Subcommittee. The purpose of this group is to
coordinate research and evaluation activities directly related
to immunization promotion efforts in WIC. The Subcommittee
facilitates and reports on cost-effective strategies that
improve vaccination coverage rates among WIC participants.
--FCS has been active and supportive of strengthening State
Immunization Information Systems as a major initiative to
improve immunization status assessment and referrals among WIC
children. To further promote this linkage, in fiscal year 1996,
FCS awarded a total of $946,793 for State WIC/Immunization
System Linkage Grants to nine WIC State agencies to design,
develop, and implement information system linkages between
State Immunization Information Systems and WIC data systems at
the State and local levels. Made possible through funding from
the Centers for Disease Control and Prevention's National
Immunization Program, the purpose of this partnership is to
enhance automation capabilities in WIC clinics to facilitate
accurate and efficient assessment of the immunization needs of
WIC infants and children. Grants were awarded to the following
States: Alabama, Chickasaw Indian Nation, Florida, Iowa,
Massachusetts, Nevada, Rhode Island, Texas, and Virginia.
--During the 1997 31st National Immunization Conference to be held in
Detroit, Michigan, the WIC Program will be a prominent point of
discussion. Representatives from FCS and State and local WIC
staff will be present at approximately 25 workshops and many
poster sessions. The conference provides WIC with an
opportunity to show the more than 2,000 attendees from both
private and public sectors WIC's commitment to improving the
quality of services, preventing the occurrence of health
problems, and improving the health status of WIC participants
under 2 years of age.
Immunization promotion activities in WIC are comprehensive and
numerous. FCS would be pleased to provide a briefing in greater depth
regarding WIC's role in increasing and maintaining immunization
coverage rates.
Senator Cochran. You might check in our State of
Mississippi. I think we have the best participation rate and
immunization rate of any State in the Union for childhood
immunizations.
It is not just because of the WIC Program, but it is
because of strong leadership in the public health community and
in State government agencies. So the Federal Government cannot
claim any credit for it.
But I point it out to say that the Federal Government might
be able to learn from the successful experience in the State of
Mississippi and use that in your communications and training
programs that you have with administrators from other States,
if they would like to find out how that was achieved. It might
be helpful.
We are talking about overall health of our population of
children around the country, and that is one of the main goals
of the WIC Program. This is something that ought to be
emulated.
Ms. Keeffe. Right. Thank you.
Senator Cochran. That is a matter of record in hearings
that the Appropriations Committee had a couple of years ago. So
it is not new information. But we continue to achieve great
results in our State in that area.
WIC Farmers Market Nutrition Program
Senator Leahy mentioned the Farmers Market Nutrition
Program. I did not think any State but Vermont was eligible for
that program. [Laughter.]
Was I wrong about that? I notice you asked for some money
here, to increase the funding from $6.75 to $12 million. Will
that extend the program to Mississippi, or will it still be in
Vermont only?
Ms. Keeffe. Well, Mississippi is one of those States that I
referred to, Mr. Chairman, that has expressed interest in
becoming part of the program. We are hopeful that with that
additional funding this year, that they will join.
Senator Cochran. Well, that is good to hear. And I am
hopeful that we can look at other options for making sure that
we have food, nutrition, education, and health care available
to those who need that kind of assistance from the Federal
Government. So when we can expand Federal programs like WIC,
particularly those that are cost effective, we want to
encourage it.
Ms. Keeffe. Of course, I think the Farmers Market Program
is one of those little jewels that really accomplishes so much
with a relatively little amount of money.
In terms of being part of the Department of Agriculture,
that connection is made with agriculture and small local
resource farmers. It introduces people to the whole concept of
purchasing nutritious foods from their local farmers, and the
benefits of fresh foods. We think this is wonderful, especially
for people who otherwise really do not know that this exists.
Nutrition Education and Training Program
Senator Cochran. I know when we visited the other day in
anticipation of this hearing, we talked about the Nutrition
Education Training Program, the NET Program, and the
supplemental funding request. There has been $10 million in
annual direct funding for NET in previous years.
The administration's fiscal year 1997 supplementals and
rescissions package includes proposed legislative language to
shift to the NET Program $6.25 million in food stamp funding
for commodity purchases of The Emergency Food Assistance
Program.
Given the fact that grants to States are available through
the school meals initiative, and you have reprogrammed funds to
make available almost $4 million in fiscal 1997 funding for the
NET Program, why is it a priority to provide additional
supplemental funding for this program?
Ms. Keeffe. Well, Mr. Chairman, the NET Program has existed
for almost 20 years and has a well-established record of
success in providing nutrition education for the child
nutrition programs.
As you mentioned, the money was lost last year through
legislation that moved simultaneously on two different tracks.
Our appropriations legislation was completed before welfare
reform was. In welfare reform, the NET money was dropped from
the mandatory account and we had no means to fund it on the
appropriations side.
Beginning in 1996, the school meals initiative for healthy
children standards were taking effect in schools where we were
upgrading nutrition standards. The nutrition education
component of that is very important. And the NET network, if
you will, which always provided that education, no longer had a
means to function. We were able to take $3.75 million from Team
Nutrition education funds to temporarily fund it.
However, that was all the money that was available for us
to move at that time. The other money in the Team Nutrition
account was earmarked for training and technical assistance,
most of it in the form of grants to States for training and
really was not appropriate for NET funding.
Therefore, we have asked for the additional $6.25 million
as a supplemental for fiscal 1997, and requested that the $10
million, the amount NET has been funded at in recent years, be
a part of fiscal 1998.
NET provides the infrastructure for nutrition education and
the Team Nutrition funding provides the materials for that
education. The two really work in conjunction with each other,
in partnership, to provide that very important nutrition
education message to children.
NET; Impacts of Welfare Reform
Senator Cochran. What is confusing to me is that the
welfare reform bill eliminated the funding for NET, as
requested by the administration. That is my information. Did
the administration not request that permanent funding be
eliminated in the welfare reform process?
Ms. Keeffe. I do not believe so, Mr. Chairman. It had moved
over into the mandatory account last year.
Mr. Braley. Mr. Chairman----
Ms. Keeffe. We are going to clarify.
NET Funding
Mr. Braley. Yes; we can provide that information for the
record in terms of the sequence of events. I believe there was
a request to shift the funding from one area to another, and it
did not get funded last year, I think that was inadvertent.
That is the reason we are in this position.
Senator Cochran. We have so many accounting games that we
play with each other, it is hard to figure out what is on the
level anymore. I think we are turning ourselves into not only
just counting beans, but it is difficult to communicate with
all these rules and nuances that I do not fully understand I
have to admit.
Well, I would appreciate an explanation of that for the
record. It seems that we have on the one hand the
administration requesting elimination of the direct funding of
a program, and then coming in and asking for a supplemental to
restore part of the funding and then shifting money,
reprogramming from another account to have it funded.
We all know there is a constituency out there that loves
the program. I learned that really early on when I said, Why
did we fund this? And the answer was, Because everybody likes
it.
We have a lot of folks out there who would be upset if you
terminated this program or made any cuts in it. We have had a
$10 million program for a good while.
[The information follows:]
Nutrition Education and Training (NET) Funding for Fiscal Year 1997
Neither the budget request nor the Appropriations Act for
fiscal year 1997 contained funds for NET because funds were
available under permanent appropriations authorized under Child
Nutrition legislation prior to welfare reform.
NET was specifically identified as a program not funded in
the 1997 Appropriations Act. As part of Welfare Reform, the
permanent funding for NET was deleted.
The Agriculture Appropriations Act for Fiscal Year 1997
passed, followed quickly by the passage of Welfare Reform. Due
to the timing of the two pieces of legislation, there was no
opportunity to add funding to the Appropriations Act. Welfare
reform also changed the funding authorization from mandatory to
discretionary.
Subsequent to the passage of the Appropriations Act for
fiscal year 1997, $3.75 million was reprogrammed within the
Child Nutrition account to make the funds available for NET.
Funds were issued to States in December, 1997.
Ms. Keeffe. Well, I think it is also an important time in
terms of the work of that program, too. We certainly heard very
clearly, when we were upgrading the nutrition standards in
school meals, how important it is to reach children with
nutrition education, as well reach the school food service
providers with the training and technical assistance that was
important to them.
The work NET does and the fact that it is well established
and well received in the school community is crucial at this
time, considering that we are making vast changes in the meals.
It is important that we continue to reach the children in any
way necessary.
Impacts on NET Program Activities
Senator Cochran. I have a question here that my staff has
prepared, and I am going to ask it, because I am curious to
know what the answer is. You may have already answered it,
though.
What activities are not being funded by States with
available NET Program funding of $3.75 million?
Mr. Braley. Mr. Chairman, as I understand it, the States
are barely able to keep a program operating at this point at
that funding level.
A lot of States have curtailed significantly their
programmatic activities, work with actual school districts, and
their customary nutrition education to teachers and food
service workers.
Early on, before the shift in funding was done to provide
even the $3.7 million, a number of NET coordinators were laid
off. Consequently, there has been a severe impact on the
ability of that program to perform its function.
I think it is safe to say that folks who are still working
in that area are doing the best they can with very limited
resources, but it is not funded at a level that will sustain
the kind of quality program we have had historically.
Senator Cochran. I think you and I both misunderstood the
question. And that is why I asked it, to see if I could figure
it out while you were answering it.
Team Nutrition Funding
I think what the question means is, since the $3.75 million
was reprogrammed by the administration from the school meals
initiative line item, what programs that had been paid for with
that money suffered the loss of $3.75 million and what was the
impact of that on the States?
Ms. Keeffe. Well, that money would have gone for
educational materials related to the Team Nutrition effort. A
lot of that money is in the form of 2-year money. We had money
in the pipeline that was able to carry forward a lot of the
materials that were already in progress.
Certainly one notable area where I have had personal
experience when visiting a lot of schools is getting our
materials translated into Spanish. We have a tremendous need
for this throughout the country, but we have recognized we are
not going to be able to fund it this fiscal year. We have had
to make it clear to States that they will have to wait until
next year.
So it basically is materials in support of our Team
Nutrition schools, which now we have 20,000 schools across
America that have signed on to be Team Nutrition schools. The
nutrition education materials that we have as part of that
effort to get into schools, to help with nutrition education
for the children, is definitely on a slower track as a result
of the loss of those funds for that part of the program.
Commodity Assistance Programs
Senator Cochran. I am going to submit questions regarding
the Commodity Assistance Program and some of the other
programs. I visited one of our warehouses in Jackson, MS, where
a lot of these commodities are accumulated and distributed to
soup kitchens and others providing meals to folks in that
fashion. It seemed to me to be an important program to support,
and I hope that we can find a way to continue to support that.
Do you provide enough flexibility, do you think, in these
programs to suit the administrators in the States? I know you
are adding programs to the Commodity Assistance Program, the
Nutrition Program for the Elderly, and Pacific Island
Assistance. Is this to give people more flexibility or less?
Ms. Keeffe. In the commodity assistance programs, Mr.
Chairman, we are providing more flexibility than we have in the
past through legislation which has combined the old TEFAP
Program, along with soup kitchens and food banks.
It is really the States who are able to determine best how
to serve the needs of their communities, whether through
congregate feeding in soup kitchens, through pantry food banks,
or mass distribution of commodities, which used to be the old
TEFAP Program.
States make the determinations. The administrative funding
applies across the board to help run those programs in the best
way.
In addition to that, of course, the funding also comes into
play with the gleaning and food rescue initiatives that the
Department has been undertaking, which of course are voluntary
efforts on the part of people to secure more foods for soup
kitchens in food banks. Those administrative funds for the
commodity assistance programs have been very beneficial in
helping to handle those extra foods that they get through those
processes as well.
Food Recovery and Gleaning
Senator Cochran. I am also interested in the National Food
Service Management Institute funding, and I will submit
questions on that and Team nutrition as well and on
administrative costs, research and evaluation, and other
subjects.
You mentioned the food recovery and gleaning initiative. I
think Bill Emerson led an effort to put that into law, the Good
Samaritan Act, I think it is now called.
The Secretary indicated that at the Department there is an
initiative under way to carry out the spirit of that law and
try to reclaim foods and distribute them to places where the
need exists.
Is there any effort by the Food and Consumer Service to
implement that program? What progress, if any, are you making
in that regard?
Ms. Keeffe. Mr. Chairman, we have worked very closely with
the goals of that program--I hesitate to call it a program
because that has other implications--but with that effort of
the Secretary. I know the Secretary takes every available
occasion to encourage groups to help out with this effort.
It has many facets, from gleaning in the fields, to food
rescue from supermarkets, terminal docks, or leftover foods
from restaurants, and matching this excess food, which is of
course in tremendous quantities in this country, to people in
need.
Certainly through our commodity assistance programs, soup
kitchens, and food banks, there is a natural connection. So we
have been working with the Secretary's efforts through our Food
Distribution Division, which works with those programs.
As I said, the important administrative funding for these
commodity programs helps them to deal with the foods that
originate from this voluntary effort. It has been very
exciting. I think it has been very well received. The
Department, of course, for many years has been providing food
to D.C. Central Kitchen from our own cafeterias every week. The
Secretary has been encouraging other Federal Departments to do
the same.
Senator Cochran. In a visit I had to the Mississippi gulf
coast, we were conducting hearings on the subject of the
growing aquaculture industry there, shellfish particularly, and
research using fish instead of other animals for research
laboratories.
Anyway, part of our tour included a stop at a place where
they were developing machinery to reclaim what would be wasted
fish that would have been thrown away. And it was just amazing.
They were making products like--what is it? It is something
that you can use just a regular fish and make it taste like
crabmeat or lobster or shrimp, some of these other varieties of
shellfish particularly.
It was quite amazing to see the efficiencies and the
technologies that can be harnessed in reclaiming food waste
like that. I hope we do learn to waste less and be more
efficient in the use of our food supply.
It is almost shameful how much food we throw away every day
in America. I have the notion that we could feed entire
countries from just the scraps from the tables of American
families.
Agency Administration
There are a couple of questions that I had in my notebook,
which I was going to submit, about program administration
requirements. You mentioned that there were problems regarding
appropriations for staff-years.
And you have not had, because of restricted staff-year
ceilings in these accounts, any option except just to deploy
staff from crisis to crisis, which makes effective program
administration nearly impossible.
You do have a lot of responsibilities, nearly $40 billion
in program funds to administer. That is quite a huge amount. I
think that has gotten up to over 70 percent of the Department's
total budget.
Ms. Keeffe. Yes; that is correct. Moreover, we have less
than 2 percent of the personnel.
Senator Cochran. How many staff have you lost? Do you have
numbers to indicate lost staff-years from your agency?
Ms. Keeffe. I do. Actually, one of the ways I look at it is
to go back to 1980, because the growth of our programs from
that time has been dramatic. And yet our staff and
administration levels have been dropping significantly.
Streamlining Goals
We dropped from 2,800 employees to 1,750 today, which is
about a 40-percent decrease. During that same time, our
programs have doubled in size. It really is a critical
situation.
And, as you know, we have a major integrity role in these
programs. There has been a lot of recent emphasis on this. It
is something that we take very seriously but we really have
reached the point at which we are truly at a barebones level of
operation.
Just in the few years that I have been associated with the
programs, we have lost 60 personnel one year, and 80 in
another. Now those do not sound large when you are talking
about numbers of Government employees, but out of a total base
of less than 2,000 people, those are substantial numbers in a
given year.
I really think that we are to a point which we cannot go
below. What we have requested is holding the line where we are.
We have met all of our streamlining requirements, and are ahead
on those numbers. So we really need to stay the course in terms
of where we are right now.
Mr. Ludwig. Mr. Chairman, Mary Ann is exactly right. We
have reached all our streamlining objectives. But what she did
not mention is that we met our streamlining objectives 3 years
ahead of schedule. In the past 4 years, FCS has reduced our
supervisory ratio by 40 percent to a 1-to-7 ratio and we
reduced headquarters staff over 12 percent. This also was 3
years ahead of our schedule. Additionally, we reduced the
number of senior staff level positions, that is GS-14's, 15's,
and SES'ers, by over 18 percent over the last 4 years.
Basically, Mr. Chairman, we do not have the bodies to do
the everyday preventive maintenance of our programs. On any
given day, we will have between 12 and 18 audits, either
through the Inspector General's Office or the GAO office,
evaluating our agency.
Based on those numbers and the reduced numbers of staff-
years, we go, as you said, from crisis to crisis instead of
being able to be proactive in our programs and heading off
crises.
Senator Cochran. What is the answer to it?
Mr. Ludwig. We have reduced staff as Mary Ann has said,
anywhere from 60 to 100 positions every year. Over the last 17
years, we have lost in excess of 1,000 employees. We are down
to less than 1,800, about 1,750. If I could just hold what I
have, I would be happy.
Senator Cochran. Well, you have asked for an increase of
$1.6 million above last year's level for program
administration.
Mr. Ludwig. Those numbers basically cover inflation.
Senator Cochran. Does it take into account cost-of-living
adjustments or pay increases and the like----
Mr. Ludwig. Yes, sir; it includes one-half of the mandatory
pay increases.
Senator Cochran. For all the employees?
Mr. Ludwig. Yes, sir.
Closing Remarks
Senator Cochran. Well, we appreciate very much your
explanation of the Department's request for these programs that
are under this subcommittee's jurisdiction. They are all very
important and serve very important needs in our Nation.
This committee wants to work with you in a cooperative way
to be sure that the programs receive the funds that are
necessary for their appropriate administration, and we will
work to achieve that goal with you.
Submitted Questions
For the questions that are submitted, we hope that you will
be able to respond to them in a timely fashion so we can have
the benefit of your input into the process as we decide on the
levels of funding for this next fiscal year.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]
Questions Submitted by Senator Cochran
wic fiscal year 1997 supplemental funding request
Question. The Administration is seeking $100 million in fiscal year
1997 supplemental funding for the Supplemental Nutrition Program for
Women, Infants, and Children (WIC).
What has been the increase in the cost of a food package above the
original fiscal year 1997 budget estimate level?
Answer. In the original 1997 budget, the Agency estimated that the
average cost of a WIC food package for all of fiscal year 1997 would be
$31.91--about 3.3 percent above what was estimated at that time would
be the final for 1996. However, the actual average cost of a food
package in the first quarter of 1997 is $31.85--about 4.2 percent above
first quarter 1996, which was $30.53.
Question. What has been the increase in the average monthly
caseload above the fiscal year 1996 level?
Answer. Average monthly WIC caseload in fiscal year 1996 was 7.193
million. At the end of fiscal year 1996 the caseload was 7.428 million.
During the first quarter of fiscal year 1997, caseload averaged 7.386
million--that is, in October of fiscal year 1997 caseload was 7.474
million, in November it was 7.400 million and in December it was 7.283
million. The WIC program has a normal seasonal pattern in which
participation falls in December and rises again in January.
Question. What did the Department do at the outset of the fiscal
year to manage the WIC Program within available funding to avoid
disruptive participation cuts and to first serve ``high priority''
women, infants and children?
Answer. Total fiscal year 1997 projected grant and participation
levels, including reallocation estimates, were provided to States in
September. States were advised that the total funds available for
fiscal year 1997 would not be sufficient to meet last year's grant
levels, adjusted based on inflation. These September estimates
indicated that many States would need to manage caseload levels
carefully to ensure expenditures would not exceed available fiscal year
1997 funding.
In January, when it was clear that many WIC State agencies might be
in danger of overspending their WIC grants, FCS transmitted alerts to
all WIC State agencies of the seriousness of the situation and
requested State spending and participation plans for fiscal year 1997.
States were again provided estimated grant levels reflecting all
anticipated available funding, to include both appropriated funds and
reallocation of prior year unspent funds. The agency will continue to
work with States that will need to reduce caseload levels and /or
tailor food packages more based on recipient need and/or increase food
package management efforts as the year progresses so they will not
overspend their grant.
When funds are not available to serve all eligible persons seeking
WIC services, State agencies are required by WIC Program regulations to
establish waiting lists which use a participant priority ranking
system. Participants are assigned a priority level at certification
which is based on their degree of nutritional and medical risk. This
priority system ensures that the highest priority persons are served
when caseload slots become available.
Question. You indicate that without this supplemental funding,
states will have to reduce participation by 400,000. Would you please
justify this estimate and give us reductions which would occur by
state.
Answer. At the end of fiscal year 1996, WIC participation was 7.4
million persons and has remained at approximately this level through
the first quarter of fiscal year 1997. FCS estimates that the current
appropriation will serve an average of 7.2 million persons per month in
fiscal year 1997. In order to achieve an average of 7.2 million for
fiscal year 1997, WIC participation must fall to 7.0 million by year
end--a reduction of approximately 400,000 women, infants and children
who would otherwise receive WIC benefits. The Agency does not have
adequate information at this time to produce State-by-State estimates
associated with this 400,000 reduction in participation.
States have submitted detailed expenditure and participation plans
to FCS, that were provided to the subcommittee on March 13, 1997.
However, based on historical evidence, our analysis indicates that the
expenditure assumptions upon which many State plans are based are not
supportable, because they indicate that States will spend all or
nearly-all the resources available in 1997. Without a supplemental in
fiscal year 1997, the Agency estimates that participation may decline
by 400,000 by the end of the year and that there will be a significant
drawdown of carryover funds.
Question. Will 400,000 current WIC participants be dropped from the
program without the supplemental funding requested? Please explain.
Answer. At the end of fiscal year 1996, WIC participation was 7.4
million and has remained at approximately this level through the first
quarter of fiscal year 1997. FCS estimates that the current
appropriation will serve an average of 7.2 million persons per month in
fiscal year 1997. This assumes that funds States carryover from 1996 to
1997 is reduced by $45 million and these funds are used to support
participation in 1997. In order to achieve an average of 7.2 million
for fiscal year 1997, WIC participation must fall to 7.0 million by
year end--a reduction of approximately 400,000 women, infants and
children who would otherwise receive WIC benefits.
When participation demand exceeds available funding, WIC State
agencies establish participant waiting lists based on a priority system
established by nutritional risk criteria and/or tailor the food
packages more carefully to address specific recipient nutritional
needs. It is anticipated that WIC State agencies will employ a variety
of measures to reduce caseload, as necessary. Some participants may no
longer be at nutritional risk at the end of their certification period
and would therefore not be recertified. Also, States may choose, in
accordance with Program regulations, not to recertify lower priority
participants at the completion of the current certification period,
providing benefits to only those determined to be in the highest
priority categories. Many States may need to establish waiting lists
for all or most new applicants, again in accordance with the priority
system established by the WIC State agency. As a last resort, State
agencies do have the authority to discontinue Program benefits to
certified participants. Such action may be taken only after the State
agency has explored alternative actions. If taken, the action should
affect the least possible number of participants and those participants
whose nutritional and health status would be least affected by the
withdrawal of Program benefits.
The expectation is that States will continue to do their best to
carefully manage their caseloads and closely scrutinize and monitor
their expenditures, making adjustments to caseload as necessary, by not
certifying new applicants, by not recertifying some recipients or, as a
last resort, by discontinuing benefits mid-certification.
wic farmers' market nutrition program
Question. The fiscal year 1997 appropriations act makes ``up to''
$6.75 million of the funding provided for WIC available to carry out
the WIC Farmers' Market Nutrition Program. If the Administration
thought there might be a shortfall in funding for WIC, why did it make
funding available to the WIC Farmers' Market Nutrition Program?
Answer. In September 1996, FCS allocated the farmers' market funds
based on the best available information that was available at that
time. That information reflected that approximately $145 million in
recoverable fiscal year 1996 WIC funds would be available in addition
to the fiscal year 1997 appropriated funds. It was thought that the sum
of these funds would be sufficient to support the expected WIC
September 1996, participation level of 7.3 million.
Subsequently, data became available reflecting a higher
participation rate than anticipated. Thus, it became apparent that WIC
caseloads could not be fully maintained with currently available
funding for fiscal year 1997. In response to this unanticipated need,
the Agency has requested supplemental funding, so that both the FMNP
and, the WIC Program may continue without disruption.
Question. The Administration's requested supplemental language also
proposes to allow the Secretary of Agriculture to distribute the
supplemental funds among States using criteria other than the current
regulatory funding formula. How would the Secretary's distribution of
these funds differ from the current regulatory funding formula? Please
provide a comparison by state.
Answer. Current WIC program funding regulations require that the
first priority for allocating funds is to provide all State agencies
with stability funding, which is each State agency's prior year food
grant plus inflation. Funds remaining after stability food grants are
met are allocated through the fair share component. A State's fair
share of funds is defined as equal to its share of the National
estimated WIC-eligible population. The fair share component provides
funds to States with stability grants below their fair share level.
The Department is requesting flexibility in allocating the
supplemental funding in order to ensure that the Secretary allocates
funds with the goal of minimizing fluctuations in program
participation. FCS anticipates that the allocation process of the
supplemental funds would be as follows: (1) allocate funds to under
fair share State agencies requiring additional funds to maintain
current participation; and to the extent that additional funds are
available, (2) allocate funds to over fair share State agencies
requiring additional funds to maintain current participation up to the
level of their defined stability grants.
The Agency is currently unable to provide an allocation comparison
by State. One element in determining eligibility for supplemental
funding is not known at this time--the magnitude of declines in
participation resulting from financial shortfalls. However, information
reflecting each State's percent of fair share as of March 1997, is
provided for the record.
[The information follows.]
WIC PROGRAM FISCAL YEAR 1997 FOOD GRANT AS PERCENT OF FAIR SHARE
[As of January reallocation]
----------------------------------------------------------------------------------------------------------------
Fiscal year 1997--
-------------------------------- (C) Food grant
State agency (A) Fairshare (B) Food grant as percent of
(w/January (w/January fairshare
reallocation) reallocation)
----------------------------------------------------------------------------------------------------------------
NERO:
Connecticut................................................. $21,250,368 $27,253,449 128.25
Maine....................................................... 9,449,961 9,853,574 104.27
Massachusetts............................................... 36,670,089 39,675,626 108.20
New Hampshire............................................... 5,492,504 6,058,806 110.31
New York.................................................... 198,815,414 190,924,889 96.03
Rhode Island................................................ 8,130,507 8,394,806 103.25
Vermont..................................................... 4,927,626 6,428,953 130.47
Indian Townshp.............................................. 20,334 51,633 253.92
Pleasant Point.............................................. 20,334 51,277 252.17
Seneca Nation............................................... 284,165 196,710 69.22
-----------------------------------------------
Subtotal.................................................. 285,061,303 288,889,723 101.34
===============================================
MARO:
Delaware.................................................... 5,637,336 5,881,309 104.33
Dist Columbia............................................... 8,227,163 6,907,483 83.96
Maryland.................................................... 35,128,720 35,707,939 101.65
New Jersey.................................................. 47,435,289 53,338,129 112.44
Pennsylvania................................................ 95,551,983 99,467,345 104.10
Puerto Rico................................................. 99,914,129 110,483,381 110.58
Virginia.................................................... 48,321,749 51,863,779 107.33
Virgin Islands.............................................. 2,739,319 4,449,299 162.42
West Virginia............................................... 19,920,678 20,636,087 103.59
-----------------------------------------------
Subtotal.................................................. 362,876,365 388,734,751 107.13
===============================================
SERO:
Alabama..................................................... 43,192,080 44,041,321 101.97
Florida..................................................... 146,596,396 130,226,516 88.3
Georgia..................................................... 77,469,568 80,480,204 103.89
Kentucky.................................................... 40,045,506 44,707,356 111.64
Mississippi................................................. 37,661,546 38,986,361 103.52
N Carolina.................................................. 72,296,903 64,366,359 89.03
S Carolina.................................................. 41,378,508 42,517,123 102.75
Tennessee................................................... 56,464,000 57,123,217 101.17
Seminoles................................................... 83,358 130,607 156.68
Choctaw, MS................................................. 213,876 191,103 89.35
E. Cherokee................................................. 211,917 338,855 159.90
-----------------------------------------------
Subtotal.................................................. 515,613,658 503,109,022 97.57
===============================================
MWRO:
Illinois.................................................... 109,335,184 109,181,078 99.86
Indiana..................................................... 52,559,537 47,897,520 91.13
Michigan.................................................... 92,700,795 82,863,707 89.39
Minnesota................................................... 31,323,020 32,682,605 104.34
Ohio........................................................ 96,977,427 86,602,032 89.30
Wisconsin................................................... 33,822,214 40,766,412 120.53
-----------------------------------------------
Subtotal.................................................. 416,718,178 399,993,354 95.99
===============================================
SWRO:
Arkansas.................................................... 27,575,435 30,593,402 110.94
Louisiana................................................... 53,078,346 57,569,814 108.46
New Mexico.................................................. 21,324,664 19,249,196 90.27
Oklahoma.................................................... 31,718,305 30,697,307 96.78
Texas....................................................... 256,565,664 202,319,522 78.86
Acl, NM..................................................... 183,811 302,196 164.41
8N Pueblo................................................... 236,950 195,901 82.68
Isleta...................................................... 376,797 289,314 76.78
Santo Domingo............................................... 127,537 161,635 126.74
5 Sandoval.................................................. 171,517 206,581 120.44
San Felipe.................................................. 140,731 161,705 114.90
Wcd. Ent.................................................... 728,060 1,031,163 141.63
Choctaw, OK................................................. 656,059 1,055,737 160.92
Cherokee.................................................... 1,645,945 2,548,663 154.85
Chickasaw................................................... 466,193 991,406 212 66
Otoe-Missouria.............................................. 204,314 293,654 143.73
Potawatomi.................................................. 742,612 962,336 129.59
Zuni........................................................ 753,814 455,032 60.36
ITC......................................................... 94,428 166,947 176.80
Muscogee Creek.............................................. 717,958 392,947 54.73
Sac and Fox................................................. 81,534 123,310 151.24
Osage Nation................................................ 140,716 378,575 269.03
-----------------------------------------------
Subtotal.................................................. 397,731,389 350,146,343 88.04
===============================================
MPRO:
Colorado.................................................... 26,367,512 26,985269 102.34
Iowa........................................................ 20,919,451 23,889,029 114.20
Kansas...................................................... 23,069,359 20,866,397 90.45
Missouri.................................................... 53,516,758 50,349,227 94.08
Montana..................................................... 8,126,292 8,379,425 103.11
Nebraska.................................................... 11,370,227 13,324,203 117.19
North Dakota................................................ 5,049,945 6,376,135 126.26
South Dakota................................................ 6,433,360 7,081,118 110.07
Utah........................................................ 20,547,294 20,915,615 101.79
Wyoming..................................................... 3,971,763 3,939,705 99.19
Shosh/Ara................................................... 209,417 371,012 177.16
Ute Mtn..................................................... 110,576 68,783 62.20
NIITDC...................................................... 123,352 329,258 266.93
Cheyenne River.............................................. 145,784 394,345 270.50
Rosebud..................................................... 294,625 692,908 235.18
Standing Rock............................................... 251,124 564,415 224.76
Three Affiliated............................................ 98,465 278,595 282.94
-----------------------------------------------
Subtotal.................................................. 180,605,305 184,805,439 102.33
===============================================
WRO:
Alaska...................................................... 10,178,281 11,051,964 108.58
Arizona..................................................... 46,124,452 43,909,583 95.20
California.................................................. 442,438,400 469,535,464 106.12
Guam........................................................ 3,890,167 3,713,183 95.45
Hawaii...................................................... 20,276,861 16,826,150 82.98
Idaho....................................................... 12,212,021 12,050,207 98.67
Nevada...................................................... 12,413,245 12,213,962 98.39
Oregon...................................................... 26,884,995 31,160,478 115.90
Washington.................................................. 45,888,198 58,231,142 126.90
ITCN........................................................ 325,976 418,150 128.28
Navajo Nation............................................... 5,278,374 10,638,316 201.55
ITCA........................................................ 4,372,907 3,605,828 82.46
American Samoa.............................................. 3,482,896 3,339,913 95.89
-----------------------------------------------
Subtotal.................................................. 633,766,774 676,694,340 106.77
===============================================
National.................................................. 2,792,372,972 2,792,372,972 100.00
----------------------------------------------------------------------------------------------------------------
Question. I understand that States are submitting to the Department
detailed expenditure and participation plans based on current funding
levels which reflect food cost data, cost containment initiatives,
anticipated fiscal year 1996 and 1997 spend forward amounts and
anticipated surpluses and shortfalls in funding levels. Please make
this information available for the record.
Answer. WIC State agency fiscal year 1997 spending plans were
received by the FCS from all WIC State agencies in February. An
analysis of the spending plans, as well as the actual plans provided by
each State agency, were provided to the Senate Appropriations Committee
on March 18, 1997.
fiscal year 1998 wic request
Question. A WIC contingency fund of $100 million is requested for
fiscal year 1998 to avoid participation reductions from unexpected food
price increases. The Secretary would be authorized to release amounts
from the contingency reserve ``should food costs exceed budget
estimates.'' What is the budget estimate which would be used as the
``trigger'' for the proposed reserve?
Answer. The contingency fund is intended to serve as a buffer
against unforeseen conditions which could threaten the goal of
supporting participation at a stable, full funding level. It is for use
only if needed to avoid participation reductions from the full-funding
level caused by higher-than-expected food costs. FCS believes it is
important to provide this buffer as the program enters a period of
greater funding stability. In the past, when WIC participation was
increasing steadily each year, higher-than-expected food costs would
have resulted in slower program growth. However, in the coming year,
when participation is expected to be much more stable and many States
will only have funds to support current participation, unanticipated
inflation would mean actual reductions in service, rather than simply a
reduction in the growth rate.
The Administration has not established a fixed technical approach
for determining the circumstances under which contingency funds would
be spent.
Question. Why does the budget propose that the requested
contingency reserve funds remain available until expended?
Answer. The contingency reserve is intended to serve as a buffer
against unforeseen conditions which could threaten the goal of
supporting participation at a stable, full funding level, and would be
used only if needed to avoid participation reductions from the full-
funding level caused by higher-than-expected food costs. FCS believes
that the need for such a buffer will remain beyond fiscal year 1998 as
the program operates at a stable level. Furthermore, it is the Agency's
best estimate that these funds will not be used in fiscal year 1998. It
is requested that the budget authority for this fund remain available
until expended, rather than periodically re-establishing the budget
authority for such a fund, as would be required if the budget authority
is granted for a fixed period.
Question. The ``full funding'' level is assumed to be approximately
7.5 million persons. Please provide the Committee with a detailed
explanation of how this full participation estimate was produced.
Answer. The ``Eligibility And Coverage Estimates 1995 Update--U.S.
and Outlying Areas'' is provided for the record.
[The information follows:]
Special Supplemental Nutrition Program for Women, Infants, and Children
(WIC)
eligibility and coverage estimates 1995 update--u.s. and outlying areas
Overview
The Special Supplemental Nutrition Program for Women, Infants, and
Children (WIC) is a Federal-State nutrition and health assistance
program for low-income childbearing women, infants and young children.
To be eligible, an applicant must meet three basic criteria:
(1) Categorical--Participants must be pregnant women, breastfeeding
women up to 1 year after delivery, non-breastfeeding postpartum women
up to 6 months after delivery, infants up to 12 months of age, or
children up to their fifth birthday.
(2) Income--The maximum income limit is 185 percent of the U.S.
Poverty Guidelines (e.g., $28,860 for a family of four as of July 1,
1996). In addition, individuals are automatically considered income-
eligible if they receive benefits under the Federal Medicaid, Aid to
Families with Dependent Children (AFDC), or Food Stamps Program (FSP).
Income limits for the AFDC and FSP are below the WIC income cutoff;
however, in some cases, Medicaid serves persons over 185 percent of
poverty.
(3) Nutritional Risk--Participants must be certified to be at
nutritional risk. Three major types of risk are recognized: medically
based risk, such as anemia, underweight, maternal age, history of
pregnancy complications or poor outcomes, etc., diet-based risk--
inadequate dietary patterns, as determined by 24-hour food recall or
food-frequency analysis, and predisposing risk conditions, such as
homelessness and migrancy.
1995 ESTIMATE OF WIC ELIGIBLE
[Numbers in thousands]
----------------------------------------------------------------------------------------------------------------
Postpartum
Pregnant and
women breastfeeding Infants Children Total
women
----------------------------------------------------------------------------------------------------------------
1994:
Income eligible.......................... 1,266 906 1,703 7,709 11,584
Fully eligible........................... 1,156 832 1,618 5,797 9,403
Participation (CY)....................... 682 842 1,796 3,298 6,618
Coverage (FY) (percent).................. 59 101 111 57 70
1995:
Income eligible.......................... 1,300 931 1,748 7,313 11,292
Fully eligible........................... 1,187 855 1,661 5,499 9,202
Participation (CY)....................... 689 900 1,817 3,541 6,947
Coverage (CY) (percent).................. 58 105 109 64 75
----------------------------------------------------------------------------------------------------------------
The Personal Responsibility and Work Opportunity Reconciliation Act of 1946 (Public Law 104-193) replaced AFDC
with the Temporary Assistance for Needy Families (TANF) program. TANF recipients will continue to be
considered automatically income eligible for WIC as long as the income standards established by States for
TANF are not less restrictive than those for AFDC
Estimates of persons eligible for the WIC program are used for
several purposes. They provide an indication of the number of persons
who would participate in WIC if funds were available. As such, the
eligibles estimates are an important component in developing program
budget estimates used in the President's budget request and the
Congressional budget process. Finally, the eligibles estimates provide
a basis for estimating program coverage--that is, for determining what
share of the eligible population the program is currently reaching.
Based on the March 1996 Current Population Survey (CPS). FCS estimates
that 9.2 million women, infants and children were fully eligible for
the WIC Program in 1995, a 2.1 percent decrease from the number
estimated eligible in 1994. A total of 11.3 million women, infants and
children fell below the WIC income eligibility limit in 1995, vs. an
estimated 11.6 million in 1994.
Program Coverage
The decrease in the estimated number of WIC income-eligibles,
combined with an increase in average monthly participation of over
300,000 for the calendar year, allowed overall program coverage to
increase by five percentage points, from 70 percent in 1994 to 75
percent in 1995. This coverage estimate does not factor in increases in
participation that have occurred since 1995.
Estimated coverage of pregnant women is approximately 58 percent
for 1995. This represents the proportion of women at all stages of
pregnancy who are participating in WIC. Because women are very unlikely
to participate in WIC for a full 40 weeks of pregnancy, this rate
should be expected to be significantly below 100 percent. For example,
if all eligible pregnant women were to participate for six months of
their pregnancy, the calculated participation rate would equal 65
percent.
Estimated coverage rates for infants and breastfeeding/postpartum
women were over 100 percent in 1995. These extremely high coverage
rates are likely attributable to some disparities between the
methodology used to estimate income-eligibles and the certification
practices in the WIC program, as well as the imprecision inherent in
any survey-based estimate. However, these data do strongly suggest that
the program has likely achieved virtually full coverage of persons in
this category at the national level. Estimated coverage of children
also rose substantially from 1994 to 1995, from 57 percent to 64
percent.
The estimate of 9.2 million WIC eligible persons in 1995 assumes
that about 4 out of 5 income eligible persons are also at nutritional
risk and thus fully eligible for the WIC Program. The estimates of
pregnant, postpartum and breastfeeding women are based on the count of
infants from the CPS and relationships found in the 1990 Decennial
Census.
WIC Full Participation
The President's Budget proposes to fully fund the WIC Program and
serve 7.5 million women, infants, and children by the end of fiscal
year 1998. The full funding participation level, providing adequate
funding to serve all eligible persons who would chose to participate in
WIC, has been assumed to be approximately 7.5 million persons for
budget purposes for the past several years. This target was originally
based on a budget estimate prepared in 1993 by the Congressional Budget
Office. It is also consistent with FCS' full participation estimate
produced in 1996 using 1994 WIC eligibles data.
Using the same methodology as was used for last year's full
participation estimates, the 1995 eligibles data would imply that 7.3
million persons would participate in the program if adequate funds were
available. This methodology assumes that, on average, approximately 80
percent of all persons fully-eligible for the program would
participate.\1\
---------------------------------------------------------------------------
\1\ This estimate also assumes that a portion of the WIC-eligible
population (approximately 65,000 persons) would continue to be served
by the Commodity Supplemental Food Program.
---------------------------------------------------------------------------
This key assumption regarding the overall maximum participation
rate is not exact and now appears somewhat low. First, year-end fiscal
year 1996 participation was approximately 100,000 greater than the 7.3
million level calculated by the model. This alone indicates that the 80
percent participation rate assumption understates the actual
participation rate. Indeed, the program has a goal of increasing
participation rates and has been successful in achieving high
participation rates for infants and women. The key variable in
determining overall program participation rates is the participation
rate among children. The strong and steady participation growth that
occurred among children in WIC throughout fiscal year 1996 suggests
that a 80 percent maximum participation rate for the program is likely
too low. The conclusion that the 80 percent participation assumption is
too low is further supported by the experience of the Food Stamp
Program, where participation rates for families with children under 5
are over 90 percent.
The 7.5 million full funding participation target is slightly above
the full participation level estimated based on 1995 CPS data using
previous methods. Given that the estimated number of fully-eligible
persons exceeds this level and the actual participation experience of
WIC and other low-income assistance programs serving children, a full
funding participation target for fiscal year 1998 of 7.5 million is
reasonable and prudent.
Question. Based on your estimates, administrative expenses
represent approximately 26 percent of the average cost of a WIC food
package. Of this amount, what portion is for administrative program
costs and what portion is for nutrition services?
Answer. The latest nutrition services and administration (NSA)
expenditure data available is for fiscal year 1995. This data shows
that 74 percent of total expenditures were for supplemental foods and
26 percent of total expenditures were for NSA. NSA refers not only to
program management costs, but to all costs other than the cost of the
supplemental foods. Only 9 percent of total expenditures were for
program management. This amount includes the cost to authorize and
monitor vendors to accept WIC food instruments; printing, reconciling
and payment of food instruments; development and management of ADP
systems; accounting, reporting, and auditing; and outreach. Nutrition
education and breastfeeding promotion and support were 6 percent of
total expenditures. These services include the preparation and
provision of education sessions (group or individual) on nutrition and
breastfeeding promotion and support; peer counseling support for
breastfeeding mothers; breastfeeding aids such as breast pumps;
equipment and materials for nutrition education; and interpreter or
translator services to facilitate nutrition education. The remaining 11
percent of total expenditures were for other client services. These
services include diet and health assessments for certification;
issuance and explanation of food instruments; referrals to other health
and social services; voter registration activities; other coordination
efforts, such as immunization promotion and drug, alcohol and tobacco
education; and coordination with other family and child health and
social programs.
Question. The fiscal year 1998 budget also requests appropriations
bill language authorizing the Secretary to adjust fiscal year 1998
state allocations to reflect food funds spent forward, and to make
other funding formula revisions.
Please provide a detailed explanation of the revisions which would
be made to the current regulatory formula, the reasons for each
revision, and a comparison of the allocation each state would receive
under the revised versus the current regulatory formula.
Answer. The Department is requesting legislative language
authorizing the Secretary to adjust the funds allocation process in
fiscal year 1998. The first adjustment would require the Secretary to
reduce each State agency's allocation for fiscal year 1998 appropriated
funds by the amount of food funds that the State chooses to spend
forward from fiscal year 1997. This will provide the Department with
the ability to reallocate a greater amount of funds to States most in
need. The second change pertains to the allocation of fiscal year 1997
funds that are recovered from the States. To the extent funds are
available, funds would be allocated to all States to maintain the level
of funding received in fiscal year 1997, adjusted based on inflation.
Any additional funds would be allocated to under fair share States that
the Secretary has determined can effectively utilize and manage
additional funds. Under fair share States are those States that are not
receiving funds commensurate with their percent of the total WIC
population.
A comparison of the allocation each State would receive under the
revised formula can not be provided at this time. Additionally, the
Agency is unable to determine which States will be under fair share and
would be eligible to receive additional funds. However, FCS provided a
list of fair share grants and food grants as of January 1997, in answer
to your previous question. These give a sense of where States are with
respect to fair shares to date.
Question. You indicated that the Department plans to proceed with a
regulatory change so that the requested appropriations bill language
would provide only interim authority. When does the Administration plan
to publish a proposed rule?
Answer. The Department plans to revise the current food funding
formula in consultation with WIC State agencies. The Agency envisions
that the proposed rule would be published in fiscal year 1998.
infant formula rebates
Question. What savings have been generated from competitive bidding
by States for the purchase of infant formula for WIC participants in
each of fiscal years 1995 through 1997? How many participants have been
funded as a result of this savings in each of these years?
Answer. Infant formula rebates reduce the cost of infant formula,
thereby allowing additional participants to be served monthly. The
requested information is provided for the record; however, the rebates
listed include rebate savings for other foods, e.g., infant cereal, but
infant formula rebates represent the vast majority of rebates.
[The information follows:]
[Dollars in thousands]
------------------------------------------------------------------------
Estimated
participation
Fiscal year Rebates increase due to
rebate savings
------------------------------------------------------------------------
1995................................ $1,051,000 1,620,000
1996................................ \1\ 1,180,000 1,790,000
1997 \2\............................ 1,172,000 1,720,000
------------------------------------------------------------------------
\1\ Rebates reported by State agencies as of 2/24/97.
\2\ Estimated rebates from infant formula only.
Question. How successful have efforts been to promote breastfeeding
as the feeding method of choice among WIC participants? What impact
does this have on savings from infant formula rebates?
Answer. FCS believes that WIC's efforts to promote breastfeeding as
the feeding method of choice for all mothers, particularly among WIC
participants is having an impact. Proprietary marketing data from the
Ross Laboratories Mothers Survey is the most recent source of
breastfeeding data available at this time. The Ross data as well as
other information suggest that WIC breastfeeding rates are growing, and
are growing at a faster rate than among non-participants. For example,
the Ross data showed that between 1989, when Congress enacted several
provisions to strengthen WIC's support for breastfeeding, and 1994, the
percentage of WIC mothers breastfeeding in the hospital increased from
34 to 44 percent, while the percentage of non-WIC mothers breastfeeding
in the hospital rose from 63 to 69 percent. This is an increase of ten
percentage points for WIC mothers compared to six percentage points for
non-WIC mothers. The 1993 General Accounting Office (GAO) report to
Congress entitled Breastfeeding-WIC's Efforts to Promote Breastfeeding
Have Increased provides additional encouraging information. The GAO
report indicated that between 1989 and 1992, in-hospital breastfeeding
among WIC participants increased nearly 12 percent. The percentage
increase in the breastfeeding rate of WIC participants was more than
twice the 5 point increase of other women in the hospital. The Agency
believes that substantial efforts directed at improving breastfeeding
rates in WIC by Federal, State and local personnel are responsible for
the encouraging trend exemplified in these data.
Infant formula rebates serve to reduce the net cost of infant
formula to the program. If a breastfed infant receives no formula, or
less formula than he/she would otherwise have received, program
expenditures are reduced by the net cost of the formula that would
otherwise have been provided. However, there are additional costs
associated with serving the breastfeeding mother, as the food package
provided to breastfeeding women is almost as large as the package
provided to those using infant formula. Breastfeeding women can
participate for up to a year, whereas non-breastfeeding postpartum
women are eligible for up to six months while they also receive formula
for their infant. In effect, it is possible but unlikely that
significant increase in the incidence and duration of breastfeeding may
increase overall program costs even as the cost of infant formula is
further reduced. In any case, the promotion of breastfeeding in the WIC
program is a priority for health rather than cost considerations.
child immunization
Question. Please give us a status report on how successfully the
WIC program has been utilized to increase child immunizations. What
level of funding is being spent on this in 1997? What is proposed for
fiscal year 1998?
Answer. The WIC Program has been and will continue to be a major
contributor to the current high levels of immunization coverage among
low income children in the United States. In fact, the Centers for
Disease Control and Prevention (CDC) considers the WIC program to be
one of its most important allies in raising and maintaining
immunization coverage rates. Of the 87 WIC State agencies (including
territories and Indian Tribal Organizations), all are currently
actively involved with immunization promotion activities. These range
from comprehensive immunization screening procedures and media
campaigns to providing incentives and sending immunization reminders to
clients.
WIC agencies provide direct ongoing administrative support for
immunization promotion efforts. Allowable WIC expenditures which can be
covered by WIC program Nutrition Services and Administrative funding
include activities such as immunization education, outreach, assessment
of immunization status (which ranges from manual to computerized
assessment), referral and follow up. WIC agencies develop cost
allocation agreements to fairly share costs of immunization promotion
activities with CDC and other sources of support for immunization. The
amount of WIC funds spent on immunization activities is unknown because
State WIC agencies are not required to report on this type of
expenditure. As technical assistance to WIC State agencies, CDC is
developing a new methodology for calculating the costs of WIC
immunization activities which may provide a tool for estimating WIC
immunization expenditures in the future.
CDC has contributed funds directly to WIC to meet mutual
immunization goals. In 1995, Congress directed CDC to ensure that all
grantees receiving Immunization Action Plan (IAP) funds reserve 10
percent of those funds for the purpose of funding immunization
assessment and referral services in WIC sites. Immunization grantees
must use the funds for WIC linkages unless the grantee can document
that assessment and referral are taking place in WIC sites without the
need for specific funds. This amounted to approximately $10 million in
both fiscal years 1996 and 1997. Future year funding from CDC is
unknown at this time.
In fiscal year 1996 approximately $1 million of CDC funding was
provided to nine WIC State agencies to design, develop, and implement
information system linkages between State Immunization Information
Systems and WIC data systems at State and local agency levels.
cap on sugar in wic-approved breakfast cereals
Question. In its hearings last year and in the report on the fiscal
year 1997 appropriations act, this Committee expressed concerns about
the Department's effort to revisit the limitation on the sugar content
of WIC-approved cereals. Specifically, we recalled that the WIC sugar
cap has been examined by the Department on a least seven prior
occasions, each of which resulted in a confirmation of the cap at its
current level (6 grams of sugar per ounce). We also expressed our sense
that, unless there is new evidence that this particular nutrition
standard requires further study, the Department's effort may represents
an inefficient use of limited resources.
We understand that despite full consideration of the Department's
Notice of Intent to Propose Rulemaking, with significant participation
in the public comment opportunity, this matter stands unresolved.
Are there any new developments in the underlying research that
would prevent a resolution of this issue?
Answer. Since the time that the Department conducted its last
review of WIC food packages, the 1995 Dietary Guidelines were issued.
That, in combination with the fact that recent studies continue to fail
to document an association between sugar consumption and an increased
risk of certain diseases and medical conditions, prompted the
Department in March of 1996 to seek public opinion on the continued
appropriateness of the current regulatory sugar caps for WIC cereals.
While commenters were generally very supportive of retaining the
current cap, some suggested that the Department should undertake a more
comprehensive review of packages, rather than just considering the
sugar content of cereals. In response, the Department intends to
publish another Federal Register notice announcing specific future
intentions regarding this new review.
In the interim, the Department is taking no action to propose
changes in current WIC regulations.
Question. What was the outcome of comments the Department received?
Answer. At the close of the 90-day comment period on the WIC Cereal
Sugar Limit Notice published in the Federal Register on March 18, 1996,
the Department received 731 letters from a total of 878 commenters,
representing a wide range of interested parties. Eight hundred and nine
commenters expressed support for retaining the 6-gram sugar limit
unchanged, 27 commenters recommended that the limit be redefined to
discount naturally occurring sugars found in grain and fruit
ingredients in cereals, 26 commenters favored an elimination of the
sugar limit, 7 commenters suggested that USDA establish a lower sugar
limit, and 11 commenters expressed other points of view. (A few
commenters expressed two positions in their letters, which were
captured accordingly in the counts reported above.)
As of March 13, 1997, 164 letters, representing 182 commenters,
were received after the closing date for the notice's comment period.
Although late letters were read and considered, they were not included
among the official counts comprising the comment analysis stated above.
Of these, 156 commenters supported retaining the sugar limit unchanged,
while the remaining 26 comments took other positions.
nutrition education training (net) program fiscal year 1997
supplemental funding request
Question. The Administration's fiscal year 1997 supplemental/
rescission package includes legislative language to shift to the NET
program $6.25 million in food stamp funding for commodity purchases of
The Emergency Food Assistance Program (TEFAP).
Given the fact that grants to states are available through the
school meals initiative and you have reprogrammed funds to make
available $3.75 million in fiscal year 1996 funding for the Nutrition
Education and Training (NET) Program, why is it a priority to provide
additional supplemental funding for the NET program?
Answer. Through Team Nutrition, the program that supports
implementation of the School Meals Initiative for Healthy Children,
grants are offered to State agencies on a competitive basis. These
grants provide money to establish or enhance training programs for
school food service personnel to enable local school districts to
provide healthy meals to children and to meet the USDA nutrition
requirements. In 1996, 17 States were awarded Team Nutrition Training
Grants for School Meals for a total funding of $2,710,920.
The Nutrition Education and Training Program (NET), in contrast,
provides grants to all States. Under the legislative mandate NET
provides: (1) instruction to educators to enable them to impart
nutrition education to children and parents; (2) instruction in basic
nutrition, as well as food service management training, to school food
service personnel; and (3) funds for educational materials development
for use with these audiences.
NET provides ongoing nutrition education and food service training
support to the Child Nutrition Programs. With $3.75 million
reprogrammed to fund NET activities in fiscal year 1997, funds were
divided equally among all States at a level of $66,951 to make it
feasible to keep the Program in operation in every State. This amount
is less than the current legislated minimum NET grant of $75,000, an
amount needed to support the service delivery infrastructure, i.e., in-
service training for teachers through community colleges; lending
resource centers for instructional materials; mini-grants to local
schools, that can meet minimum obligations to each program audience.
The minimum grant currently applies in 20 States with relatively low
numbers of children enrolled in schools and child care institutions.
NET funds are allocated based on enrollment figures obtained annually
from the Department of Education.
The $66,951, then, severely underfunds States with higher
enrollments, hindering their ability to adequately meet the needs in
their States for nutrition education and training. Some of these needs
are continuous as new teachers, food service personnel, and children
enter the school system each year. Knowledge and skills of educators
and food service personnel must be updated as new information in food
and nutrition becomes available. NET has a vital role in the
implementation of the current activities in the Team Nutrition
initiative.
wic farmers' market nutrition program
Question. The fiscal year 1998 request proposes to increase funding
for the WIC Farmers' Market Nutrition Program from $6.75 to $12
million.
How many state agencies and Indian tribal organizations are
currently participating in this program? Please identify the number of
farmers' markets by State and Indian tribal organization supported by
this program and indicate the amount of funds being allocated for each.
Answer. Thirty State agencies (including 2 Indian tribal
organizations) are currently participating in the program. A chart is
provided for the record that shows the number of farmers' markets and
current grant amounts for fiscal year 1997 by State agency.
[The information follows:]
------------------------------------------------------------------------
Fiscal year
1997 Federal Number of
grant markets
------------------------------------------------------------------------
California.............................. $150,102 47
Chickasaw, OK........................... 40,000 5
Connecticut............................. 261,810 45
District of Columbia.................... 145,760 6
Illinois................................ 104,097 8
Indiana................................. 32,897 11
Iowa.................................... 368,697 69
Kentucky................................ 77,119 22
Maine................................... 92,568 34
Maryland................................ 175,427 45
Massachusetts........................... 472,311 89
Michigan................................ 271,208 68
Minnesota............................... 183,345 14
Missouri................................ 31,173 3
MS Choctaw.............................. 10,121 1
N. Carolina............................. 111,378 18
New Hampshire........................... 85,003 25
New Jersey.............................. 136,727 99
New Mexico.............................. 75,000 7
New York................................ 1,443,901 185
Ohio.................................... 95,582 29
Oregon.................................. 55,114 8
Pennsylvania............................ 676,891 270
Rhode Island............................ 81,153 6
S. Carolina............................. 99,778 21
Texas................................... 936,863 44
Vermont................................. 74,676 27
Washington.............................. 135,230 18
West Virginia........................... 68,015 10
Wisconsin............................... 233,054 13
Undistributed funds \1\................. 25,000 ..............
-------------------------------
Total............................. 6,750,000 1,247
------------------------------------------------------------------------
\1\ These are funds that were initially allocated for Cherokee, Oklahoma
which has since withdrawn from the program. The funds remain
undistributed due to current FMNP funding restrictions.
Question. Which states or Indian tribal organizations have
expressed interest in beginning programs? Which states or Indian tribal
organizations have made requests to expand their programs?
Answer. Colorado, Florida, Idaho, Mississippi, Montana, Nebraska,
Georgia and Utah have expressed interest in beginning programs.
Additionally, Georgia has submitted an approved State Plan to
participate, positioning it as the first of the interested States to be
funded if additional funding is made available. The following
participating State agencies have requested expansion funds for fiscal
year 1997: California, Indiana, Iowa, Kentucky, Michigan, Minnesota,
Missouri, Mississippi Choctaw, New York, North Carolina, Ohio, Oregon,
Pennsylvania, Rhode Island and West Virginia.
Question. How would the additional $5.25 million requested for
fiscal year 1998 be allocated? Please provide a breakdown by state/
Indian tribal organization.
Answer. By law, the first priority for these funds is to restore
State agencies to their previous year's funding level. Of the remaining
funds, 75 percent would be allocated to currently participating State
agencies that request expansion funding. A funding formula, designed by
the Department in consultation with State agencies, is used to
distribute expansion. Basically, this formula ranks State agencies
according to their previous year's average FMNP grant per WIC
participant. Expansion requests are funded in rank order, beginning
with the State agency with the lowest FMNP grant per participant. The
remaining 25 percent would be allocated to new State agencies that are
seeking to initiate a WIC Farmers' Market Nutrition Program (FMNP). A
ranking process, based on factors specified in the law, is used to
allocate funds to new State agencies. The law requires allocation on
the basis of factors such as prior experience with a similar program,
State plans that have the greatest access to farmers' markets, the
highest concentration of eligible persons and such other factors as
determined appropriate by the Department.
Because fiscal year 1998 State Plans, which are the vehicle for
requesting expansion or new funding, are not due until November 30,
1997, FCS cannot provide a specific breakdown of the allocation of the
$5.25 million by State/Indian tribal organization at this time. FCS
can, however, identify the States that have expressed interest in
initiating the FMNP. The following States have expressed an interest in
participation in the FMNP: Colorado, Florida, Georgia, Idaho,
Mississippi, Montana, Nebraska and Utah.
Question. How many farmers are currently participating in this
program? How many WIC participants?
Answer. Preliminary data indicate that in fiscal year 1996 there
were 8,239 farmers representing 1,231 farmers' markets participating in
the program. Additionally, there were 991,121 WIC participants enrolled
in the Program.
Question. What are the Department's latest findings with respect to
the significant benefits of this program to farmers and to WIC
participants? How are these benefits measured?
Answer. The Department has not conducted a formal evaluation of the
WIC Farmers' Market Nutrition Program (FMNP) since 1989 when the
program was still in its pilot phase. As such, a conclusion must be
drawn regarding the benefits of the program from informal survey data
that are provided by each State agency.
Based on the most recent survey data available, reflecting fiscal
year 1995 program operations, 51 percent of recipients who responded to
the survey said they had never been to a farmers' market before taking
part in the FMNP. In addition, 77 percent said they planned to eat more
fruits and vegetables all year round and 89 percent said the quality of
the fresh produce at farmers' markets was as good as or better than at
their grocery stores.
Regarding farmers who responded to the survey, 84 percent said that
the FMNP increased their sales. In addition, 35 percent reported
increased fruit/vegetable production and 32 percent stated that they
plan to grow a wider variety of fruits or vegetables next year because
of their involvement in the FMNP.
commodity assistance program
Question. Beginning in fiscal year 1996, funding for the Commodity
Supplemental Food Program, Soup Kitchens, and The Emergency Food
Assistance Program was merged into a Commodity Assistance Program. The
fiscal year 1998 President's budget proposes to add to the Commodity
Assistance Program funding for the Nutrition Program for the Elderly
and Pacific Island Assistance.
In its fiscal year 1997 report, the Committee encouraged the
Department ``to distribute the commodity assistance program funds more
equitably among States, based on an assessment of the needs and
priorities of each State, and the State's preference to receive
commodity allocations'' through each of the programs funded through the
commodity assistance program account. Are you doing this? If not, why?
Answer. Of the $166 million appropriated to this account for fiscal
year 1997, the Department exercised discretion granted in the
appropriations act to provide $76 million, the amount requested in the
President's budget, to the Commodity Supplemental Food Program (CSFP).
The remaining $90 million has been made available for the Emergency
Food Assistance Program (TEFAP) administrative grants and commodity
purchases. (TEFAP and the Soup Kitchens/Food Banks Program (SK/FB) were
separate programs at the time of the appropriation, but SK/FB was
absorbed by TEFAP under the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996 (Public Law 104-193) enacted two
weeks later.) States have been given the discretion to request that all
or any portion of their administrative grants be used instead to
provide commodities. They also have full discretion to determine how to
divide their TEFAP commodities between congregate meal service and
household distribution.
The Department did not implement the Committee's suggestion because
such action might have caused severe reductions in CSFP services in
many of the 18 States and two Indian Tribal Organizations administering
the program. The benefits in this program are well targeted to at-risk
population groups, and the program delivers these benefits efficiently
and effectively. In contrast to the extremely disruptive impact
Nationwide dispersal of resources would have in areas where the program
currently operates, such action would not provide the other States with
a significant increase in resources. Moreover, the funding for TEFAP
commodity purchases increased by $100,000,000 in fiscal year 1997 by
the enactment of Public Law 104-193. This increase in TEFAP funding was
another reason for allocating CSFP funding in accordance with the
Administration's fiscal year 1997 budget request.
Question. One of the programs funded under the commodity assistance
program--the Commodity Supplemental Food Program--serves a very limited
number of states. Are all states now allowed to receive funding under
this program, or, conversely, to receive more soup kitchen/emergency
food assistance funding if they elect not to participate in the
Commodity Supplemental Food Program? If not, why?
Answer. The Department chose to devote $76 million, the amount
requested in the President's budget, to the CSFP. This funding was
intended to maintain the program in the areas where it currently
operates. CSFP funding was not increased beyond the budget request to
support expansion of the program into other States, nor was program
funding reduced to compensate States which do not currently administer
the CSFP.
Question. If the Department is not giving states flexibility in
receiving commodity assistance program funds but instead maintaining
separate funding streams for the individual programs funded through
this account, why is the Department not asking to restore separate
appropriations for each of these programs rather than merge more
programs into this account?
Answer. While the Department is maintaining separate funding for
these programs included in this account, the merging of these programs
in this manner maintains their discretionary status while simplifying
the budget presentation.
Question. Most states do not opt for commodity assistance under the
Nutrition Program for the Elderly program. They instead elect to
receive a cash reimbursement for each meal served. Why is the
Administration proposing to merge this program, which for the most part
does not provide commodity assistance, with the Department's commodity
assistance programs?
Answer. The Nutrition Program for the Elderly (NPE) provides States
with the flexibility to receive commodities and/or cash. Since the
States have the option to receive commodities, both entitlement and
bonus, the program has always been classified as a commodity program.
In fiscal year 1996, nearly one third of the States elected to receive
some level of their NPE entitlement in the form of commodities.
Question. The Administration proposed last year that funding for
the Nutrition Program for the Elderly be transferred to the Department
of Health and Human Services (DHSS). Does the Administration no longer
believe that this program should be managed by the DHHS in conjunction
with other elderly feeding programs? Why?
Answer. Unlike the other commodity programs, the Older Americans
Act, which authorizes the Nutrition Program for the Elderly (NPE),
expired last year. The Administration has determined that the better
avenue for considering the transfer of NPE to the Department of Health
and Human Services is through the reauthorization process. The Agency
still believes that the recipients would be best served if NPE were
combined and administered by HHS, since HHS' portion of the funding for
the program is about 3 times greater than USDA's, and one set of rules
would be easier to follow than two.
Question. What has been the decline in WIC-type participation in
the Commodity Supplemental Food Program as eligibles shift into the WIC
program in each of the last five fiscal years? Why not reduce funding
for the Commodity Supplemental Food Program as eligibles shift into the
WIC program?
Answer. Prior to fiscal year 1995, the number of women, infants,
and children (WIC) participating in the Commodity Supplemental Food
Program (CSFP) increased each year. In fiscal years 1995 and 1996 the
number of WIC participants decreased by 36,315 and 26,761 respectively.
Based on participation to date, it is estimated that the number of WIC
participants will decrease by 8,744 in fiscal year 1997.
The Department does not request reduced funding for the CSFP as the
participation of WIC declines because the CSFP provides an efficient
and effective service to its low-income elderly participants as well.
Whereas many women, infants, and children have WIC as an option to the
CSFP, no such clear alternative or equivalent program exists for the
elderly.
It should be noted that the elderly prefer participation in CSFP
for various reasons. One primary reason is that the application process
is much simpler than for other programs, such as food stamps and SSI.
Moreover, the commodity distribution sites are sometimes more
conveniently located than stores and for the homebound elderly, the
commodities are taken directly to them. Lastly, participants report
liking the types of commodities distributed. Therefore, funding not
required to support women, infants, and children should be retained for
service to the elderly.
Question. Although the fiscal year 1998 budget proposes a reduction
in elderly participation in the Commodity Supplemental Food Program,
the program's elderly population has increased over the past years.
What assistance is provided to the elderly through this program which
cannot be provided to this population through other federal food
assistance programs?
Answer. Like child bearing women, infants and young children (the
other populations served by the Commodity Supplemental Food Program
(CSFP)), the elderly have special nutrient needs. The CSFP is designed
to provide a nutrient dense food package to supplement the nutrient
intake from other sources. CSFP is well-suited to the needs of the
elderly for several reasons. Some CSFP sites deliver the commodities to
the elderly person's home or centralized centers where the elderly, who
often have transportation problems, are able to receive the assistance.
In addition, anecdotal evidence suggests that the elderly associate
programs such as the Food Stamp Program (FSP) with charity and
therefore underutilize the program while viewing CSFP as acceptable
assistance. In fiscal year 1994, only 35 percent of elderly eligible
for the FSP participated in the program; the overall participation rate
for all ages of eligibles in the FSP was 71 percent.
food program administration
Question. The prepared testimony indicated that restrictive staff
year ceilings in the Food Stamp and Child Nutrition accounts and
limited appropriations have enabled you only to ``deploy staff from
crisis to crisis, which is making continuous, effective program
administration nearly impossible.''
How have staff year ceilings in the Food Stamp and Child Nutrition
accounts and appropriations limitations affected the agency's staff?
What has been the impact of staffing reductions on the Department's
ability to properly administer and oversee these programs?
Answer. Since fiscal year 1995, FCS has had to reduce its staff by
60 to 80 staff years every fiscal year due to funding reductions in the
Food Program Administration (FPA) account. Although the Agency is
committed to the National Performance Review and the Vice President's
goals of reducing the Federal workforce and FCS has been diligent in
implementing efficiencies, the Agency believes that the cuts have been
very deep. FCS reached its fiscal year 1999 streamlining target 3 years
ago. Restrictive staff year ceilings in the Food Stamp and Child
Nutrition accounts have made the Agency inflexible in its ability to
shift staff to changing priority areas, such as program oversight. Due
to the ceilings, increased focus on areas needing attention, such as
program integrity and providing technical assistance to State agencies,
cannot be properly staffed by the Food Stamp or Child Nutrition
accounts where the effort is most vital. This has had a significant
impact on the Agency's ability to carry out its mission.
Staff restrictions and reductions have also affected the Agency's
ability to properly monitor and oversee everyday activities of FCS
programs. Due to funding reductions, FCS has curtailed travel that is
crucial to monitoring sites and maintaining Federal presence in the
field. Staffing reductions have placed highly labor-intensive
activities, such as store investigations and maintaining program
integrity at risk. Federal on-site management reviews are critical to
the proper administration of Child Nutrition Programs. These reviews
reveal administrative and operational problems at early stages.
Additionally, external audits from GAO and OIG have consistently cited
insufficient staff to exert proper oversight of State administrative
costs and debt management practices.
The reductions in staff also affects the Agency's ability to
respond to program changes. Implementing new legislation, such as
Welfare Reform, the Healthy Meals for Healthy Americans Act, and the
Government Performance and Results Act, impose significant, new, and
ongoing administrative burdens on FCS. These new laws effect
comprehensive program changes and are extremely important to our
programs, but they are not receiving the full attention they deserve
due to staff limitations and other demands. Agency workload has
dramatically increased due to new legislation, several Department-wide
initiatives, and the fact that our programs have tripled in size and
complexity since 1980. There is not enough staff to handle the
increased workload or proactively respond to problems to head off a
crisis, all of which is having an adverse affect on morale.
The fiscal year 1998 budget requests a minimal increase to fund
mandatory pay increases to support existing staff. Mandatory pay raises
increase the cost of each staff year every fiscal year, requiring small
increases in the FPA appropriation just to support existing staff. The
cost of funding additional staff in the FPA appropriation or increasing
the staff year ceilings in the Food Stamp and Child Nutrition accounts
is millions of dollars less than the cost of increased fraud and abuse
in our programs. The small amount of funding it will take to support
our staff will provide programs that truly help those less fortunate,
that respond appropriately and effectively to new needs and changing
legislation, and that operate efficiently with savings to the taxpayer.
Question. The prepared testimony indicates that the fiscal year
1998 request includes no funds to update the agency's automated
infrastructure which demands attention. What improvements are needed
and how much is needed to address this problem?
Answer. The FCS began its Agency Infrastructure Modernization (AIM)
in fiscal year 1996. By that time, much of the Agency's computer
infrastructure had aged to the point where it had exceeded its life
expectancy. In fiscal years 1996 and 1997 the Agency was able to
replace much of its antiquated microcomputer hardware and software
base. However, FCS still needs to upgrade over 400 microcomputers.
Also, the Agency's file servers, network operating systems, wiring
plant, certain standard software and advance application hardware and
software are in need of modernization. Additionally, the Agency has
only been able to make limited progress in Internet and Intranet
applications.
The Agency's infrastructure modernization plan calls for the
development or upgrade of these hardware and software tools in order to
ensure a productive work environment for its employees. The plan is
designed to upgrade all of this hardware and software by fiscal year
2001, pending the availability of resources.
The estimated cost for fiscal year 1998 is $4,000,000 which is
currently unfunded. These funds would be used to complete the
microcomputer modernization, upgrade the Agency's file servers, network
operating systems and wiring plants at headquarters and seven regional
offices, and provide end-user and technical training in the new
standard software. Additional infrastructure areas that require
modernization are planned for fiscal years 1999 through 2001. These
areas will need to be funded during those fiscal years.
Question. The fiscal year 1998 request for the Center for Nutrition
Policy (CNPP) and Promotion is $2.49 million. The budget indicates that
an additional $252,000 is needed above the fiscal year 1997 level to
support ``unfunded staff.'' What do you mean by this?
Answer. In fiscal year 1996, the Center for Nutrition Policy and
Promotion (CNPP) was allocated $2,499,000 for salaries and expenses
from the FPA appropriation. For fiscal year 1998, CNPP is requesting
the same amount to fully fund current staff needs. CNPP believes, that
at a minimum, it must have a critical core of 34 FTE's, mostly senior
nutritionists and economists, to fulfill its mission and produce high
quality nutrition policy analysis and deliver state-of-the-art
nutrition education. This critical core staff is even more essential in
fiscal year 1998 as CNPP is expected to provide most of the staff
support for the Dietary Guidelines 2000. By tradition, USDA and the
Department of Health and Human Services (DHHS) have rotated
responsibility for staff and production costs incurred in producing the
Dietary Guidelines. For the Fifth Edition of the Dietary Guidelines,
due in the year 2000, USDA is responsible for staffing and production
costs, most of which are expected to be provided by CNPP. In fiscal
year 1997, CNPP is operating below its critical core need. In fiscal
year 1998, CNPP needs to restore its resources to the critical core
staff necessary for CNPP to fulfill its mission and produce the Dietary
Guidelines 2000.
kentucky-iowa food demonstration projects
Question. Would you please provide a summary report on the
Kentucky-Iowa food demonstration projects?
Answer. Since fiscal year 1989, Kentucky and Iowa have operated a
demonstration project which allows for-profit child care centers to
participate in the Child and Adult Care Food Program (CACFP) if 25
percent or more of their enrollment qualifies for free or reduced price
lunch under the Income Eligibility Guidelines. Normally, for-profit
centers can only participate in CACFP if at least 25 percent of their
enrollment or licensed capacity is subsidized with Title XX child care
funds.
Through fiscal year 1994, the centers participating in this
demonstration project were treated as regular CACFP centers for funding
purposes. Beginning in fiscal year 1995, the funding for the
demonstration was classified as discretionary. A total of $3.7 million
was apportioned for the demonstration for fiscal year 1995 and is set
to remain at that amount through fiscal year 1998.
The number of for-profit centers participating in the demonstration
project in Kentucky increased from 77 centers in 1991 to 247 centers at
the end of fiscal year 1994. Almost 90 percent of the participating
centers would not have been eligible to participate in the CACFP due to
the small number of Title XX beneficiaries attending these centers. The
number of participating centers has declined slightly since that time
as a result of the funding constraints established when the
demonstration projects were classified as discretionary.
In Iowa, there was no significant increase in the number of for-
profit centers participating in the demonstration project. There were
six centers participating in fiscal year 1991 and 10 by the end of
fiscal year 1994. Of these centers, 60 percent had sufficient Title XX
beneficiaries to meet the regulatory requirements for participating in
the CACFP.
During fiscal year 1996 there was an average of 180 sponsors, 170
in Kentucky and 10 in Iowa, and 228 centers, 218 in Kentucky and 10 in
Iowa, approved for participation in the demonstration project.
Enrollment in centers participating in the project averaged 13,696 in
Kentucky and 688 in Iowa. A total of 1.6 million breakfasts, 2.0
million lunches, 1.0 million suppers, and 2.5 million snacks were
served under the demonstration projects during fiscal year 1996.
school meals initiative/team nutrition
Question. For fiscal year 1997, $10 million was provided for the
school meals initiative. Of this amount, $4 million was provided for
food service training grants to states; $2.5 million for in-school
education materials; $2.3 million for technical assistance materials;
$800,000 for cooperative agreements with the National Food Service
Management Institute (NFSMI) for food service; and $400,000 for print
and electronic food service resource systems.
The Department reprogrammed $3.75 million of the fiscal year 1997
funds provided for the school meals initiative to the Nutrition
Education Program. The Committee was notified that no reduction would
be made in the funds made available for food service training grants to
states or for cooperative agreements with the NFSMI. Please explain
from which other funded activities this $3.75 million was taken and why
the activities for which funding was reduced were considered to be of
lowest priority.
Answer. That information is provided for the record. All fiscal
year 1997 Schools Meals Initiative funding for nutrition education
along with part of the training and technical assistance funding was
used to support NET activities. The specific nutrition education
activities not funded included the printing and distribution of Spanish
translations of existing Team Nutrition materials. This funding
reduction also slowed the developmental process for the middle school
materials, since the Agency had to rethink the method for transmitting
the nutrition education messages to this audience given the reduction
in funding for this activity. The Agency was unable to follow through
with all of our commitments to the Team Nutrition Schools. Currently
fiscal year 1996 carry-over funds are being used for other nutrition
education activities while we await fiscal year 1998 funds.
The funding reduction for food service training and technical
assistance prevented us from printing and distributing training and
technical assistance support materials promised to program
administrators. The Agency plans to fund these projects with fiscal
year 1998 appropriations.
[The information follows:]
School Meals Initiative: Activities Not Funded
Fiscal year 1997
I. Children's Education Resources, In-School Education
Materials........................................... $2,500,000
II. Food Service Training and Technical Assistance,
Technical Assistance Materials...................... 1,250,000
--------------------------------------------------------
____________________________________________________
Total............................................. 3,750,000
Question. The explanatory notes indicate that $11.867 million is
available for the school meals initiative. This would mean that $7.6
million in funds provided in previous fiscal years have been carried
over and are available for fiscal year 1997. For which specific
activities is this additional $7.6 million being made available?
Answer. The amount carried over from fiscal year 1996 and being
made available for fiscal year 1997 has been revised to $5,590,377.
This amount is being used to fund six School Meals Initiative
activities.
[The information follows:]
Children's Educational Resources........................ $3,398,377
Mass Communication...................................... 75,000
Public-Private Partnerships............................. 230,000
Technical Assistance Materials.......................... 1,000,000
National Food Service Management Institute.............. 250,000
Evaluation/Administration............................... 637,000
--------------------------------------------------------
____________________________________________________
Total............................................. 5,590,377
Question. The fiscal year 1998 request for the school meals
initiative is $10 million. Please provide a detailed breakdown of this
request, indicating the specific activities which would be funded--food
service training grants to states; technical assistance materials;
cooperative agreements with the National Food Service Management
Institute, Children's Education Resources, Public-Private-Partnerships,
Mass Communication and Evaluation, etc.--within the Nutrition Education
and Training and Technical Assistance components of this initiative.
Please provide a comparison of the funding made available for each of
these specific activities in each of fiscal years 1995-1997.
Answer. That information is provided for the record. The fiscal
year 1997 allocations represent the current budget plan and the fiscal
year 1998 allocations will be estimates.
[The information follows:]
SCHOOL MEALS INITIATIVE: SPENDING BY CATEGORY AND APPROPRIATION
----------------------------------------------------------------------------------------------------------------
Fiscal year--
-------------------------------------------------------
1997 1998
1995 1996 (estimate) (estimate)
----------------------------------------------------------------------------------------------------------------
I. Food Service Training and Technical Assistance:
Technical Assistance Materials...................... $3,904,105 $1,910,734 $1,050,000 $1,000,000
Print and Electronic Food Service Resource Systems.. 1,097,720 97,755 400,000 400,000
NFSMI Cooperative Agreement for Food Service........ 424,659 250,000 800,000 500,000
II. Children's Education Resources: In-school Education
Materials and Community Education Materials............ 7,884,363 4,821,785 ............ 3,200,000
III. Food Service Training Grants to States............. \1\ 4,042,39
1 1,920,665 4,000,000
\3\ 3,750,00
0 4,000,000
IV. USDA/FCS Direct Training and Education.............. 744,652 400,000 ............ ............
V. Children's Communications and Technology............. 328,130 75,000 ............ 200,000
VI. Team Nutrition Partnership Support: Resources for
Team Nutrition Schools and Partnership Network Support. 106,717 247,061 ............ 200,000
VII. Evaluation......................................... 1,702,736 \2\ 777,000 ............ 500,000
-------------------------------------------------------
Total............................................. 20,235,473 10,500,000 10,000,000 10,000,000
----------------------------------------------------------------------------------------------------------------
\1\ Includes 1995 Team Nutrition Grants plus partial funding for 1996 Team Nutrition Grants.
\2\ Includes $140,000 for evaluation and $637,000 for Administrative expenses.
\3\ $3,750,000 was reprogrammed to Section 6(a)(3) of the National School Lunch Act to provide grants to States
to fund activities that would have otherwise been supported by the NET Program.
\4\ Includes administrative expenses and evaluations.
Question. Management Institute, Children's Education Resources,
Public-Private-Partnerships, Mass Communication and Evaluation, etc.--
within the Nutrition Education and Training and Technical Assistance
components of this initiative. Please provide a comparison of the
funding made available for each of these specific activities in each of
fiscal years 1995-1997.
Please provide detail on the food service training grants awarded
to states in each of fiscal years 1995-1997, identifying the state, the
amount of the grant, and a brief description of the project for which
the award was made. For each fiscal year, please provide this same
information for grant requests received by states for which no award
was made.
Answer. The information is provided for the record.
[The information follows:]
1995 Team Nutrition Training Grants
Arkansas Department of Education--$185,875
The Arkansas Team Nutrition Training Project was designed to build
teams of effective leaders who could maximize the use of available
resources to provide healthful school meals that an increasing number
of Arkansas students would enjoy. There were three objectives: increase
the number of managers, assistants, directors, and State agency staff
who are prepared to accept this leadership role; expand the number of
school-wide teams of leaders prepared to share this role; and build a
technology support system to help sustain leadership learning. The
State held training workshops for managers, established technology
support demo sites at schools and education cooperatives, and added
Health Action Teams to the existing State network.
Georgia State Board of Education--$199,000
This project involved developing a curriculum for use by a cadre of
trainers who conducted customized training based on the manager's
choice of meal planning options. The project objectives were: to
provide managers with customized training that incorporates the meal
planning option they will utilize to implement the Dietary Guidelines
in school meals by September 1996; to provide managers implementing the
food-based meal planning option with an easy-to-use training tool, the
interactive compact disc, to teach consistent, reliable information on
meal planning; and to compile up-to-date training materials that can be
integrated into the required Training-in-Depth curriculum and other
training.
Idaho State Department of Education--$399,930
Consortium--Alaska, Idaho, and Nevada
This project developed a training infrastructure for four States,
one of which used its own funding for the implementation of the School
Meals Initiative for Healthy Children. The consortium of States hired a
coordinator to develop a three-tiered training program for food service
authorities. The first tier dealt with menu standardization,
modification, and substitutions; the second tier, nutrient standard
menu planning or food based menu planning; and the third tier,
marketing and merchandising. A cadre of trainers were established and
trained in each State to carry out the training. The training program
will be incorporated into each State's Nutrition Education and Training
Program over the next few years.
Illinois State Board of Education--$199,984
This project focused on the support and marketing of a new training
delivery system to be offered through community colleges. The training
focused on developing a ``train-the-trainer'' session for instructors
on implementation of the Department's nutrition requirements and the
Dietary Guidelines and also on developing and implementing a marketing
initiative to inform school administrators and food service
professionals of the training delivery system. In addition, the project
focused on training peer consultants who provide more advanced
individualized training that food service managers need to implement
nutrition requirements. Also, a teleconference to assist with menu
planning issues was provided in an effort to reach a large number of
food service personnel.
Kansas State Board of Education--$160,307
The Kansas State Board of Education developed a sustainable
Statewide infrastructure to support the Kansas Comprehensive Training
System (KCTS) for School Nutrition Professional Development. The Team
Nutrition Training Grant objectives involved developing key components
of KCTS including quality training resources, a computerized training
resource catalog, a Statewide training resource center, formal
training, in-service training, independent study, leadership
development, and nutrition education integrated with elementary
education.
Louisiana Department of Education--$400,000
Consortium--Louisiana, Oklahoma, and Texas
The objectives of the Louisiana, Oklahoma, and Texas Team Nutrition
Training Project were to determine through a training needs assessment,
the curriculum needs of school food authorities to implement the
revised National School Lunch Program and School Breakfast Program meal
pattern regulations. Based upon the needs assessment, a common set of
curricula for training school food service personnel were developed.
The training was delivered using NETPRO style resource sharing, a
Louisiana college center, and electronic communications.
Maine Department of Education--$66,774
The State agency coordinated with the Maine Technical College
System to develop a sustainable training program for school nutrition
personnel statewide. The program offered three levels of training. The
first level included basic nutrition, sanitation, and safety, which
provided basic knowledge and skills. These courses offered as
interactive computer programs, and classes met three times during a
semester. Grant funds were used to computerize the nutrition component.
The sanitation and safety components developed at the Department of
Agriculture were used. The second level used technical college faculty,
school nutrition directors, State agency staff, local chefs, and other
appropriate individuals to train school nutrition staff on
implementation of the Dietary Guidelines. This training was broadcast
over the Interactive Television Network to assure reaching the maximum
number of individuals statewide. A Maine School Nutrition Certificate
was awarded at completion of this level. Level three will be an update
offered annually and will result in certificate renewal every three
years. Grants were made to eight schools to become Team Nutrition
Schools. Teams from these schools received training and served as
models for other schools Statewide.
Minnesota Department of Education--$199,868
This project provided school food and nutrition programs personnel
with the education, training, and resources necessary to provide school
meals that are consistent with the Department's nutrition requirements
and Dietary Guidelines for Americans. The Team Nutrition Training Grant
project included needs assessments, promotional information, resource
development, training delivery systems, evaluation, and follow-up
training and technical assistance. The project was done in
collaboration with an advisory group involving partnerships with the
education community, health organizations, local agriculture groups,
and school food and nutrition programs personnel.
Mississippi State Department of Education--$400,000
Consortium--Mississippi, Florida, and Kentucky
The Teaching Nutrition Techniques (TNT) project expanded the
current training infrastructure in Florida, Kentucky, and Mississippi
by providing an effective ``train-the-trainer'' network empowered to
deliver user friendly training to site-based child nutrition (CN)
employees, the personnel responsible for the quality of meals prepared
and served. Through TNT, CN personnel in 5,500 schools in the three
States were motivated, empowered, and trained to implement the
nutrition principles of the Dietary Guidelines for Americans through
use of quality food preparation methods for menu items. The consortium
worked with outside sources to develop TNT Train the Trainer and
Package modules which were used to train trainers and CN personnel.
Missouri Department of Elementary and Secondary Education--$107,240
This project provided in-depth training for State staff on school
lunch computer software and expanded training programs for school food
service personnel to a year-round effort at multiple sites throughout
the State, providing more technical and hands-on training in addition
to basic training such as Healthy Edge. Teleconferences reached 9,841
food service personnel plus school administrators. Workshops targeting
specific issues and skills followed the teleconferences. The training
and teleconferences covered computers, healthy food production and
introduction to Nutrient Standards, healthy cuisine for kids, and
nutrient standard menu planning.
Montana Office of Public Instruction--$291,916
Consortium--Montana and Wyoming
The main focus of this joint projected was maintaining the health
of school-aged children in Montana and Wyoming by strengthening the
infrastructure of the nutrition education and school food service
training efforts for teachers, school food service personnel, and
community educators. Interrelated activities of the project encompassed
components to enhance the infrastructure for delivering training on the
implementation of the Dietary Guidelines in schools, to enhance the
infrastructure of teacher training at the pre-service and inservice
levels, to establish a ``Team Nutrition School'' concept in a rural
state, to increase interest in shared healthy meals through a child's
cooking program, and to integrate healthy school meals and nutrition
education into school health programs. The States accomplished this by
conducting training sessions on using fresh produce, recipe
modification, three new menu planning systems and establishing a
child's cooking program and the Team Nutrition School Model.
Nebraska Department of Education--$57,100
The purpose of this project was to provide food service directors
and managers with the knowledge, skills, and encouragement necessary to
provide healthy meals that appeal to their students and meet the
department's nutrition requirements through 22 Statewide mini-meetings.
They started establish an infrastructure of trainers for school
programs. Pre/post tests and assessment questionnaires were utilized to
determine Dietary Guidelines implementation as a result of the mini-
meeting. Registered dietitians interested in becoming State trainers
were invited to attend one of the meetings. This project was
accomplished by developing instructional material, pre/post tests, and
assessment questionnaires; by collecting, testing, and analyzing
recipes; and by scheduling and implementing the mini-meetings to
disseminate the information.
New Hampshire Department of Education--$80,000
New Hampshire provided an inexpensive, effective method for
planning and providing children's meals that meet the Dietary
Guidelines. It also provided the resources and expertise needed to help
children gain the nutrition knowledge and skills necessary to make
decisions for healthy lifestyles. Additionally, the State trained
school food service personnel to provide training beyond the grant year
and to set up a network for them to share solutions and solve problems.
The State provided demonstrations and training in various approved
software packages, established a resource library, trained personnel in
various methods of menu planning, conducted needs assessments and
workshops, and provided an electronic bulletin board for food service
personnel.
New Mexico State Department of Education--$199,542
New Mexico, faced with such issues as a diverse population, great
geographic distance, and cultural and language differences, planned to
form partnerships with nonprofit commodity groups, government agencies,
and industry to help make its programs better. It has established a
Team Nutrition Training New Mexico Ad Hoc Advisory Committee to address
these needs. The State developed a culturally-appropriate menu cycle;
identified available resources which support the Healthy Meals
Initiative; set up a 1-800 help line, a newsletter, a lending library,
and a catalog of local resource people and organizations; established
five model demonstration school food authorities to pilot New Mexico
Menus and the Healthy Meals Initiative; conducted workshops for food
service personnel; and developed a long range training plan for
implementing the Healthy Meals Initiative at the district/school
levels.
North Dakota Department of Public Instruction--$49,378
The training project utilized three approaches to design
sustainable infrastructures to support the training of school nutrition
personnel. The approaches were: (1) develop and broadcast two satellite
training seminars on the implementation of the Dietary Guidelines for
Americans in school meals; (2) organize a cadre of training
professionals and conduct initial training of cadre members; and (3)
enhance efforts to train local personnel on the use of the team
approach to implementing the Dietary Guidelines for Americans in school
meals, and to encourage participation in the developed training series
plan, ``Pathways to a Quality Future.''
Rhode Island Department of Elementary and Secondary Education--$66,330
The Team Nutrition Training Grant Project collaboration established
a Statewide training system that provided the means to convey
information that is relevant to the time, consistent with the goals,
and practical to implement. The State of Rhode Island had three goals
in this project: to provide school nutrition and food service personnel
with the education, motivation, training, and skills necessary to
provide healthy meals that appeal to the children served and meet the
Department's nutrition requirements; to transform the cafeteria
environment to a learning laboratory that encourages healthful eating
habits through the marketing of healthful choices; and to establish a
collaboration between school food services and Johnson & Wales
University to enhance the image of the school food service profession.
Utah State Office of Education--$156,708
The focus of this project was to create a network of professionals
that possess the capability of training school food service staff
throughout the State. This network used professional teachers and
dietitians to instruct food service employees on how to use the Dietary
Guidelines for Americans in making modifications in their menus and
food preparation. The network used the same cadre of trainers to train
the local school food service employees in the use of the NuMenus
planning systems in their districts. The trainers were contracted from
various regions throughout the State and were available to address the
needs of the local districts. Their close proximity ensured that
employees received proper training. The cadre provided training in
areas identified by a needs assessment tool developed by the State
Office of Education.
Vermont Department of Education--$61,417
Building its current professional development system, Vermont
planned a year's worth of seminars, workshops, and activities designed
to (1) prepare schools to consistently offer meals that meet the
Dietary Guidelines, (2) increase student participation in school meal
programs, and (3) develop a sustainable body of material to use in
future training and establish a support network. The State accomplished
this through seminars, training sessions, mentor programs, nutrition
education for students, and a model-school program.
West Virginia Department of Education--$94,713
This project provided a comprehensive integrated approach to
attaining nutrition integrity in West Virginia schools. Training and
nutrition education opportunities addressed planning, preparing, and
promoting healthy meals, and creating a school environment that
enhances nutrition learning. Food service personnel, educators,
students, and parents were provided team building opportunities. This
was accomplished by strengthening the infrastructure (through
collaboration, staff development, policy, and training network);
providing district food service workshops; providing college courses
for school managers; adapting point-of-choice training models; training
and supporting school teams; and developing/distributing materials.
states not funded
Below are the 12 Team Nutrition Training Grant applications that
were not funded in 1995.
New Jersey--A collaboration between Pennsylvania Department of
Education, New Jersey Department of Education and Penn State University
would have been established to create a Statewide campaign to provided
the immediate training needed for compliance with the new Federal
regulations as well as establish a system for continuing education
opportunities. This campaign was to include four components: 1) central
to the educational campaign was to be a two day, Statewide, interactive
satellite conference for all school food service directors--The Team
Nutrition Training (TNT) Satellite Conference; 2) leading up to the
conference--a pre-conference education and promotional component; 3)
the establishment of an infrastructure within the State for electronic
communication network; and 4) a sustainable infrastructure for
continuing education. $73,307
Ohio--This training program for local district staff would have
included two levels of training. The first level focused on the
understanding of the Dietary Guidelines for Americans and the
integration of those principles into menu planning, recipe
modification, and food preparation skills. The second level training
focused on the skills necessary to accomplish nutrient analysis of
menus and nutrient standard and food based menu planning. $200,000
Oregon--The training project would have utilized an existing
statewide training structure (NETPRO Oregon) to deliver Nutrient
Standard Menu Planning training for healthy school meals to schools
throughout Oregon. A comprehensive training program would be developed
using multimedia equipment to effectively deliver training to schools
on site and at state-wide workshops. Additionally, funds would be used
to study the nutrient content of meals as selected and consumed by
students in a choice-based meal service system. $145,000
Pennsylvania--A collaboration between Pennsylvania Department of
Education and Penn State University would have been established to
create a statewide campaign to provided the immediate training needed
for compliance with the new Federal regulations as well as establish a
system for continuing education opportunities. This campaign consisted
of four components: 1) central to the educational campaign--a two day,
statewide, interactive satellite conference for all school food service
directors--The Team Nutrition Training (TNT) Satellite Conference; 2)
leading up to the conference a pre-conference education and promotional
component; 3) to establish an infrastructure within the state for
electronic communication network; and 4) a sustainable infrastructure
for continuing education would be established. $200,000
Puerto Rico--Train school food service personnel using the 10 hour
course ``Healthy E.D.G.E. curriculum, in order to incorporate the
Dietary Guidelines for Americans in the preparation and service of
appealing school meals for Puerto Rico's younger population. $200,000
Colorado--Target 35 rural school districts to provide training,
assistance and resources to incorporate the Dietary Guidelines in
school menus. Objectives were to: survey students to establish food
preferences; standardize, modify and do a nutrient analysis of selected
revised recipes; establish menus based on the Department's nutrition
standards; and provide nutrition information resources for use in
cafeterias and classrooms which would render nutrition information
about the school meals. $98,943
New York--Subcontract with Madison-Oneida Board of Cooperative
Education Services (BOCES), for continuation of a contract providing
for the development and delivery of a training program in the following
areas: dietary guidelines; planning menus to meet the dietary
guidelines; use of technology to support nutrient and food based menu
planning; and using standardized recipes and food production records.
BOCES would also conduct an introductory training session on the
Dietary Guidelines in a computer lab for Master Instructors of the
Statewide Training Network. $200,000
Connecticut--Build and expand a sustainable infrastructure for
statewide delivery of training. Through a combination of courses,
workshops and support resources, the grant would provide the necessary
training, skills and motivation for school food service personnel to
implement the Dietary Guidelines in school meals. $199,997
Delaware--A collaboration between Delaware Department of Public
Instruction and Penn State University would be established to create a
statewide campaign to provided the immediate training needed for
compliance with the new Federal regulations as well as establish a
system for continuing education opportunities. This campaign would have
four components: 1) central to the educational campaign--a two day,
Statewide, interactive satellite conference for all school food service
directors--The Team Nutrition Training (TNT) Satellite Conference; 2)
leading up to the conference a pre-conference education and promotional
component; 3) to establish an infrastructure within the State for
electronic communication network; and 4) a sustainable infrastructure
for continuing education would be established. $62,527
Michigan--Develop and implement a train the trainer program for
child nutrition and comprehensive school health educators, develop
training modules on implementation of the Dietary Guidelines, and
create an instructional video to be used with the modules. $200,000
Maryland--Provide a train the trainer model course for the piloted
C.H.E.F.S. program (Culinary and Healthful Enhancement of Food in
Schools) in Maryland. Each school system would form a training team to
train their employees in local settings and to engender the support of
the professional chefs in their area to work with school nutrition
personnel and instruction personnel to teach the course. $98,057
Massachusetts--Develop a school nutrition training program based on
a yearly plan with integral and comprehensive goals and objectives. The
goal of the project was to entwine the Dietary Guidelines in areas
related to and overlapping school food service programs. The training
would target school food service directors, managers, workers, school
teachers, health educators, parents, students and the community.
$194,664
1996 Team Nutrition Training Grants
Illinois State Board of Education--$160,275
The Illinois State Board of Education plans to provide three major
activities to assist school food service professionals in preparing
healthy school meals. The first activity includes a director's and
manager's conference held in two locations, providing participants with
the chance to develop advanced skills in food service management.
Training will include information on Federal program regulations, food
purchasing, sanitation practices, and use of the Internet. The second
activity planned is a teleconference targeted toward school food
service production staff. The teleconference will provide information
on the importance of standardized recipes, recipe components, recipe
modification, and measuring student acceptance of menu items.
Videotapes of the teleconference will be mailed to each school district
to be used as a training tool for future staff development. The
activity will culminate in a ``cook-off,'' where school food service
professionals will be given an opportunity to enter their recipes and
menus. Twelve finalists will be selected and videotaped, showcasing the
learned skills while promoting the National School Lunch Program. A
winner will be selected by a panel of judges consisting of school food
service personnel, students, media representatives, and parents. A CD-
ROM will be developed showcasing the professionals demonstrating food
preparation techniques. The third activity planned is the formation of
an ad hoc advisory committee consisting of representatives from various
National, State, and local agencies already involved in training. Their
discussions on strategies and available resources will result in the
goal of providing quality staff development for school food service
personnel.
Massachusetts Department of Education--$144,116
The Massachusetts State Department of Education will provide
training and technical assistance for their school food service
professionals. One project will be teaching nutrition requirements and
the Dietary Guidelines for Americans through a traveling interactive
workshop called Dietary Guidelines on the Move. Free Internet access
will be offered to all public schools in the State, and a nutrition web
page will be established on the State DOE Web Site as a sustainable way
to communicate and transfer information. The State agency plans to
offer food service directors of Team Nutrition Schools the opportunity
to become members of a peer resource group. This group will submit
newsletter articles on their efforts, develop school nutrition goals
for schools, and act as a telephone resource for new approaches to
introduce the Dietary Guidelines into school meals and the nutrition/
health curriculum. Massachusetts also plans to complete a Cafeteria to
Classroom Nutrition package using materials, curriculum, and cycle
menus from the State Heart Association and from the Stalker Institute.
Additionally, the State agency plans to provide training for Nutrition
Education Health Teams, consisting of school food service directors,
health teachers, nurses, guidance counselors, and home economics
teachers.
Wyoming Department of Education--$129,607
The Wyoming State Department of Education proposes a two-phase
project. The first phase involves plans to develop five model schools
in the State to implement Healthy School Meals. These schools will be
the center of a post-project, self-guided, area-support network. On-
site training will be provided by project leaders, consultants, and
extension educators to school food service personnel, administrators,
teachers, and other school or community representatives on successful
implementation of the TN plan. A video will be produced on training
issues, strategies, and results from the model schools, and will be
used to help build partnerships with other organizations around the
State. Training workshops on National Food Service Management
Institute's Healthy Cuisine for Kids will be presented in five
locations throughout the State for interested schools.
Michigan Department of Education--$196,710
The Michigan Department of Education intends to target their high-
need, larger school districts that serve about 70 percent of the
students in the State. They plan to provide training and technical
assistance for school food service personnel in two components. The
first component will involve training 420 two-person teams (the
director/supervisor and the head cook/manager) of school food service
personnel to prepare and serve healthy meals meeting the Dietary
Guidelines, using hands-on Healthy Cuisine for Kids curriculum
developed by the National Food Service Management Institute. Once
trained these teams will train their employees at the local level,
resulting in 4,200 additional trained school food service personnel.
The second component is designed to build partnerships at the local
level to support and enhance TN Schools. They plan to develop and
distribute video packets as a technical assistance piece designed to
help food service personnel networking with county extension personnel,
build community partnerships to support and foster implementation and
expansion of TN School activities.
Colorado Department of Education--$82,225
The Colorado Department of Education plans to target all Colorado
school districts to provide training, assistance, and resources to
implement the Department's Healthy School Meals Initiative (HSMI).
Their efforts will begin with a student survey to determine their food
preferences. The information will be used as a basis for creating menus
which meet the HSMI using USDA standardized recipes, Tool Kit recipes,
and local district standardized recipes. They also plan to provide
training, technical assistance, and resources to school food
authorities to help them incorporate USDA recipes with quality food
preparation techniques. The training will include Culinary Techniques
for Healthy School Meals, Trimming the Fat, and nutrient analysis
software. They will also provide assistance and technical training to
school district personnel that will help school food service personnel
and educators provide information to students, parents, and the
community about nutrition and the HSMI guidelines. TN curricula, menu
templates, and other resources will be distributed, and presentations
by the Junior Chefs will also be given to students in classrooms.
Idaho State Department of Education--$399,588
Consortium--Alaska, Idaho, and Nevada
The consortium of Alaska, Idaho, and Nevada will expand the
training infrastructure for their States and the State of Washington
using their own funds for the implementation of the Healthy School
Meals Initiative (HSMI). They will compile available resources and
develop supplemental materials for the train-the-trainer workshops.
Training will take place in each State. The consortium will also
develop training materials for residential child care institutions
(RCCI's), to include an analyzed and tested cycle menu which will
include smaller sized recipes and food items commonly served in their
programs. They also plan to develop a training tool for school food
service personnel (servers, cashiers, part-time employees and
substitutes) to provide education, motivation, training, and other
skills necessary to provide healthy meals. Additional HSMI materials
will be used, and offer versus serve materials expanded especially for
cashiers. They want to promote HSMI through nutrition education in the
classroom, community, and cafeteria by providing five Regional
presentations. State and local partnerships will be developed, and
training offered to teachers, principals, parents, and students on the
importance of healthy school meals. At least five mini-grants will be
awarded to schools for development of model programs to support healthy
school meals. Food and Nutrition Information Center will deliver
training to the trainers on the Healthy Meals Resource System, in turn,
the trainers will go back to their States to deliver training on
meeting the new regulatory requirements and the Dietary Guidelines.
Louisiana Department of Education--$195,403
The Louisiana Department of Education plans to expand on their
previous efforts by strengthening their training infrastructure. The
first project they plan to undertake is the review and revision of the
State agency's current food service technician and manager training
program to reflect the changes in the Federal regulations and the
National School Lunch and School Breakfast Programs. They plan to
expand their pool of NETPRO trainers from 10 to 20, and work with the
State Cooperative Extension Service and Office of Public Health to
train State agency officials and key leaders in the State on the
revised meal pattern regulations, allowing them the chance to serve as
valuable resources to the local school food authorities. Louisiana also
plans to expand the use of electronic networking among school food
authorities by 50 percent. This will improve communications and support
the access to information on nutrition, food preparation, and the
changing requirements.
Minnesota Department of Children, Families and Learning--$188,236
The Minnesota Department of Children, Families, and Learning plans
to sustain the created training infrastructure by completing a
multitude of projects. They plan to combine the activities of their
established Team Nutrition (TN) Training network with the initiation of
a mentorship program throughout the State. The mentors will be school
food service personnel who have met the goals of the Healthy School
Meals Initiative and who can provide leadership and support to those
school food authorities that are striving to meet the Dietary
Guidelines. Specialized TN trainers will be activated to promote and
train food service personnel on NuMenus and the revised Minnesota
LunchPower Menus. Minnesota will design training opportunities based on
the learning style and educational needs of their food service
personnel. The training opportunities will include mini-promotional
workshops and regional carnivals. They also plan to show school food
service personnel how to market their programs by using TN materials, a
marketing guidebook, and student posters and newsletters. Finally, they
plan to collaborate with communities by continuing their TN Partnership
Advisory group and foster a collaboration with the Minnesota Extension
Service to provide promotional training sessions.
Mississippi Department of Education--$200,000
The Mississippi State Department of Education, in conjunction with
the University of Southern Mississippi, plans to implement a database
system called Mississippi MiniMax Menus (4M). Using this database,
Child Nutrition Program personnel in over 950 school sites will plan
and serve meals that meet the nutrition standards of USDA and appeal to
students. Recipes will be modified and standardized, and two sets of
menus (for elementary and secondary schools) will be developed. All of
the menus in the 4M database will be analyzed by USDA-approved nutrient
analysis software programs. Mississippi will also develop menu
modification matrixes (exchanges) and print recipes that school food
service personnel can use to create their meals in response to student
preferences. Training manuals for 4M will be developed, and training
established on 4M for the State's school food service administrators
and managers, who will, in turn, train their own people.
Montana Office of Public Instruction--$186,515
The Montana Office of Public Instruction, using the foundation
established from the 1995 Team Nutrition Training Grant, will continue
to expand statewide training opportunities for school food service
personnel and educators in the implementation of the Dietary Guidelines
for Americans to shape healthy eating habits in children. Montana plans
to distribute their video What is a Team Nutrition School? as a
marketing tool for promoting Team Nutrition. They will purchase
multimedia equipment to be used to train school food service staff
throughout the State during Regional training sessions and annual State
conferences. Training subjects will include menu planning, procurement,
food preparation and services, and nutrient analysis. They will also
provide training to teachers on nutrition education during their
Regional in-service and summer training sessions. Montana will continue
their USDA recipe adaptation project, as well as complete and publish
the student acceptance of meals research project findings. Finally,
they will initiate a mini-grant program to establish new Team Nutrition
Schools.
New Hampshire Department of Education--$70,554
The New Hampshire Department of Education plans to provide
additional training for the school food service professionals in their
State with the help of their sister State, Vermont. They plan to
provide training for food service directors in both States by pooling
resources for high quality training on management issues. New Hampshire
will contract with their State School Food Service Association (NHSFSA)
to create training focusing on production team skills, teamwork, and
the new regulations and will offer training in the Keys to Excellence,
helping the NHSFSA move toward a peer review program in the State. They
will also form a partnership with the State chapter of the American
Culinary Federation to connect their members with school food service
directors. They will offer NuMenus computer analysis training sessions
for 150 school food service professionals and one basic Internet
training. In addition, they will obtain assistance with computerized
nutrient standard menu analysis for State staff. They will also
contract with the National Food Service Management Institute for a
Nutrition Education and Training Program needs assessment.
New York State Education Department--$150,000
The New York State Education Department plans to contract with the
Madison-Onieda Board of Cooperative Educational Services (BOCES) to
provide training for the State's school food service personnel. BOCES
will provide nutrient analysis computer training using a ``traveling
computer lab'', as well as open a resource/informational telephone line
for technical assistance once the training is completed. They will
deliver the train-the-trainer programs on production records and
standardized recipes to 30 master instructors. The master instructors
will also receive training in the planning and preparation of meals
that meet the Dietary Guidelines for Americans (DGA) from the Culinary
Institute of America. The instructors will, in turn, go back to their
areas and train the local food service directors and staff, teachers,
and parents in the preparation of healthful, attractive school meals
that will meet the DGA and that are appealing to children.
Rhode Island Department of Elementary and Secondary Education--$104,168
The Rhode Island Department of Elementary and Secondary Education
plans to expand and build upon the core training program established
during the 1995 Team Nutrition Training Grant period. They will offer
two-day training sessions to multi-level school food service staff,
chefs, and other sponsors such as residential child care institutions
(RCCI's). Training will cover topics such as low-fat cooking, the use
of commodities, food safety, the Dietary Guidelines for Americans, and
equipment purchasing. Rhode Island also plans to create a Team
Nutrition Training (TNT) Institute at Johnson & Wales University. Upon
its inception, chefs and nutritionists will attend one-day annual
training sessions at the TNT Institute. They will be given updates on
school meal issues and training on how to access resources. A resource
center with a lending library is planned, along with an electronic
access system, including the Internet. A multi-media TN Resource kit
will be assembled using resources already developed. A Team Nutrition
core team will plan nutrition activities for schools. Finally, a school
food community service component will be added--in-kind service hours
will be provided by culinary students at Johnson & Wales University.
These students will provide technical assistance to the schools with
on-site visits.
Pennsylvania Department of Education--$192,641
The Pennsylvania Department of Education plans to deliver training
in response to needs assessments. The training will be in the form of a
series of workshops for school food service personnel. An advisory
council and training cadre have been selected, and training has been
held on choosing menu planning options and food production. A training
workshop on documentation requirements for menu planning options will
be offered in three five-hour sessions. Additionally, a Skills Training
teleconference for school food service directors will be held in July
1997, providing the skills necessary to implement the Healthy School
Meals Initiative. They also plan to train the cadre in computerized
menu planning and analysis, who will then train directors at the local
level.
South Carolina Department of Education--$167,708
The South Carolina Department of Education plans to set specific
standards for entry into the school food service field to ensure the
service of quality meals served to students. They plan to establish a
food service training resource center with mini-grants to districts or
schools to acquire the needed technology to access and use these
resources. They will also formulate three guidance books for district
supervisors and site managers, giving them information on how to train
their personnel on the Dietary Guidelines for Americans and how to
implement Healthy School Meals Initiative (HSMI) in their cafeterias.
The guidance books will be field tested and revised as necessary.
Additionally, they will establish and advertise a training delivery
system designed to deliver the majority of small group training in the
State. Three training centers in different locations in the State will
be used by local school food service personnel to train on HSMI.
Vermont Department of Education--$83,418
The Vermont Department of Education's project plans to hold a
series of training activities addressing how to manage and accomplish
changes in food service programs, as well as integrating those programs
with nutrition education efforts. The State will expand the nutrition
education program by creating a plan for schools and teachers, offering
them a day-long conference and mailing on how to implement nutrition
education and how to access resources. They plan to increase the skills
of food service managers by waging an extensive campaign to address the
technological barriers schools face in implementing nutrient standard
menu planning. They will contract out training centers at two State
technical schools or colleges and offer training in word processing,
spreadsheets, nutritional analysis and the Internet. They will also
hold a technology fair, advertising it via brochure and by a State
school meals web site. The State plans to expand an on-going technical
assistance project specifically targeted toward 1/3 of the school food
authorities that have 150 or fewer students. The Small School Survival
Strategies training will cover program management and menu planning.
Additionally, other efforts will focus on consolidating the management
of as many as 13 separate small School Food Authority's under food
service managers. They will also offer, in conjunction with the New
Hampshire Department of Education, a repeat session of Planning for
Change. Vermont Interactive TV (VIT) will air a ``newsletter'' for
school food service directors to get updated Healthy School Meals
Initiative information and other classes, such as Prep'niques and
Trimming the Fat.
West Virginia Department of Education--$59,756
The West Virginia Department of Education plans to build on their
efforts toward achieving nutrition integrity in their schools. Under
this project, all district menu planners and food service directors
will be required to measure and validate the attainment of their
nutritional goals for their meals. A six-hour workshop on computer
analysis will be developed, along with four regional workshops in
school computer labs. All directors and menu planners in the State will
be afforded the opportunity to attend one of these trainings. The State
will also provide technical assistance to school food authorities who
want nutrient standard menu planning or food-based evaluations, and six
State agency staff will get a workshop and at least one site visit to
test field monitoring procedures, ensuring the transition into the new
Healthy School Meals Initiative regulations progress smoothly.
states not funded
All Team Nutrition Training Grant applications were funded in 1996.
1997 Team Nutrition Training Grants
On January 8, 1997, all State agencies that administer the National
School Lunch Program and/or Nutrition Education and Training (NET)
Program were invited to compete for a Team Nutrition Training Grant.
Applications to apply for a grant are due to FCS April 16, 1997 and
grant awards will be announced on July 31, 1997.
Question. Last year, Secretary Haas indicated to this Committee
that Team Nutrition had entered into agreements with over 200 partners
as part of the agency's efforts to leverage public resources.
Would you please provide a list of these agreements and the federal
funding, by fiscal year, which has been provided for each.
Answer. Team Nutrition supporters receive no federal funds directly
for being a supporter; however, some Team Nutrition funding is used to
provide supporters with material designed to keep them up-to-date on
Team Nutrition activities and to encourage them to become involved at
the local level. A list of current Team Nutrition Supporters is
provided for the record. The total exceeds 300 organizations. These
Supporters have provided the Agency with a statement indicating their
support of Team Nutrition's Mission and Principles. In return they are
listed in publications as supporters and are kept informed of Team
Nutrition activities and opportunities for their participation in Team
Nutrition Schools. Supporters play a key role in the success of Team
Nutrition. Their involvement multiplies the resources available to Team
Nutrition Schools. They may be volunteers for activities or they may
provide food or other supplies in direct support of activities. As a
result, for a small federal investment Team Nutrition leverages its
limited funds to benefit all participants.
Some organizations included in this listing received Team Nutrition
funding through cooperative agreements or contracts for specific
product development beyond their role as a supporter. These include the
following groups and funds listed by funding year:
----------------------------------------------------------------------------------------------------------------
Fiscal year--
-----------------------------------------------
1994 1995 1996
----------------------------------------------------------------------------------------------------------------
The Walt Disney Company......................................... $200,000 $195,000 ..............
Scholastic, Inc................................................. 299,538 1,496,814 $737,313
----------------------------------------------------------------------------------------------------------------
Many of these Supporters have been involved in Team Nutrition from
the beginning through Leadership Forums. Supporters play an important
role in mobilizing the community in support of improved child nutrition
and these Leadership Forums provide the opportunity for all those
interested in children's health to discuss how they can work together.
Through Supporter involvement, Team Nutrition has taken hold locally
and its principles will be sustained for years to come assuring a
healthier future for our children.
[The information follows:]
These organizations support the Mission and Guiding Principles of
Team Nutrition: \1\
ADVOCAP, Inc.
Agricultural Women's Leadership Network
Agenda for Children
Albany Park Community Center
Alivio Medical Center
American Academy of Pediatrics
American Alliance for Health, PE. Rec. & Dance
American Association of Family & Consumer Sciences
American Bakers Association
American Cancer Society
American College of Physicians
American College of Preventive Medicine
American Culinary Federation, Inc.
American Dietetic Association
American Farm Bureau Federation
American Federation of School Administrators
American Federation of Teachers
American Fine Foods
American Health Foundation
American Heart Association
American Heart Association, MD Affiliate
American Institute for Cancer Research
American Institute of Wine & Food
American Meat Institute
American Medical Association
American Medical Student Association
American National Cattlewomen, Inc.
American Nurses Association
American Oat Association
American Psychological Association
American Public Health Association
American School Food Service Association
Archer Daniels Midland Company
Archway Cookies
Arkansas Poultry Federation/Egg Council
Association for Child Development
Associated Churches Food Bank System
Association for Children of New Jersey
Association for the Advancement of Health Education
Association of Maternal & Child Health Programs
Association of State & Territorial Public Health Nutrition Directors
Auglaize Mercer CAC
Aurora Project, Inc.
Beef Products
Bennington-Rutland Opportunity Council (BROC)
Better Baked Pizza, Inc.
Big Brothers/Big Sisters of America
Blue Diamond Growers
Boy Scouts of America
Bread for the World
Brooks Foods
Bumble Bee Seafoods, Inc.
California Apricot Advisory Board
California Beef Council
California Department of Education
California Food Policy Advocates
California Fresh Carrot Advisory Board
California Prune Board
California Tomato Growers Association, Inc.
Campaign for Food Literacy, The
Camp Fire, First Texas Council
Cancer Research Foundation of America
Careers Through Culinary Arts Programs
Center for Environmental Education
Center for Science in the Public Interest
Center on Hunger, Poverty & Nutrition Policy/Tufts University School of
Nutrition
Cherry Marketing Institute
Children's Action Alliance
Children's Action Network
Children's Defense Fund
Children's Foundation, The
Citizen's for Missouri's Children
Citizens for Public Action on Blood Pressure & Cholesterol
City of Columbus, Health Department
City of Rockford (IL) Head Start Program
Colorado PTA
Community & Economic Development Assn. (CEDA) WIC Program
Community Kitchen of Monroe County, Inc.
Community Resource Center (OH)
Comstock Michigan Fruit
ConAgra, Inc.
Congressional Hunger Center, The
Consumer Federation of America
Cooperative State Research, Education & Extension Service, USDA
Corning Consumer Products Company
Council of Agricultural Science & Technology
Council of the Great City Schools, The
Culinary Institute of America
Curtice Burns Foods
Diet Workshop
DINE Systems, Inc.
Dole Food Company, Inc.
Draper-King Cole, Inc.
Eastern Shore Seafoods Products
Finger Lakes Packaging
Florida State Department of Citrus
Focus: Hope
Food Bank of Oakland Country (MI)
Food Chain
Food Marketing Institute
Food Research & Action Center
Food Service System Management Education Council
Food to Grow Coalition, The
Furman Foods, Inc.
Gehl's Guernsey Farms, Inc.
General Mills, Inc.
Georgia Department of Agriculture
Gilroy Canning Company, Inc.
Girl Scouts of the USA
Girl Scouts--Mile Hi Council
Gleaners Foodbank of Indiana, Inc., The
Green Thumb, Inc.
Health Matters!
H.J. Heinz Company
Hormel Foods Corporation
House of Mercy Daycare
Howard Foods, Inc.
Hudson Specialty Foods
Hunger Action Coalition
Husman Snack Foods
Illinois Community Action Association
Illinois Department of Agriculture
Illinois State Horticultural Society
Indiana Agricultural Leadership Institute
Indiana State Univ. Department of Family & Consumer Sciences
International Apple Institute
International Food Information Council
International Food Service Distributors Association
J.R. Simplot Co.
James Beard Foundation/Dando & Company
Jewish Healthcare Foundation of Pittsburgh, The
Johnson and Wales University
Kankakee County WIC Program
Kelly Foods, Inc.
Kent State University, School of Family and Consumer Studies
KIDSNET
Lakeside Foods, Inc.
Land O'Lakes Custom Products Division
LDS Church-Welfare Services
Life Lab Science Program
MAGNAtracker Company, The
Maudester Farmer
Marriott Management Service
Maternal Child Health Center (IN)
Marvel Entertainment Group
Mello Smello
Memorial Medical Center (IL)
Michigan Apple Committee
Michigan Asparagus Advisory Board
Michigan Plum Advisory Board
Michigan Red Tart Cherry Advisory Board
Middlesex Co. Vocational Technical High School
Mid-Ohio Foodbank
Minnesota Cultivated Wild Rice Council
Minnesota Food Education & Resource Center
Minnesota Food Share
Mothers & Others
Muir Glen Organic Tomato Products
Nalley's Fine Foods
National 4-H Council
National Alliance of Vietnamese American Service Agencies
National American Wholesale Grocers Association
National Association for Sport & Physical Education
National Association of Elementary School Principals
National Association of Meal Programs
National Association of Psychiatric Treatment Centers for Children
National Association of School Nurses
National Association of School Psychologists
National Association of State NET Coordinators
National Association of WIC Directors
National Black Child Development Institute
National Black Nurses Association
National Black Women's Health Project
National Broiler Council
National Cattlemen's Beef Association
National Consumers League
National Council of La Raza
National Dairy Council
Dairy Council of Central States
Dairy Council of Mid-East
St. Louis District Dairy Council
Washington State Dairy Council
National Dental Association
National Dry Bean Council
National Education Association
National Extension Association of Family and Consumer Sciences
National Farmers Organization
National Farmers Union
National Fisheries Institute
National Fitness Leaders Association
National Food Processor's Association
National Food Service Management Institute
National FFA
National Gardening Association
National Grange
National Heart Savers Association
National Medical Association
National Osteoporosis Foundation
National Pasta Association
National Pork Producers Council
National PTA
National Puerto Rico Coalition, Inc.
National Restaurant Association
National Rural Electric Cooperative Association
National School Health Education Coalition
National Turkey Federation
National Urban League
New England Dairy Food Council
New Hampshire Fruit Growers Association
North Atlantic Sardine Council
North Carolina Sweet Potato Commission
Northeast McIntosh Growers Association
Northwestern University Settlement
Nutrition Council of Greater Cincinnati
Nutrition Education Learning Lab
Ocean Spray Cranberries, Inc.
Ohio Hunger Task Force
Orange County WIC/Child Health Project
Ore-Ida Foods, Inc.
Organization of Chinese Americans
Our Daily Bread
Pennsylvania Coalition on Food & Nutrition
Perdue Farms, Inc.
Physical Rehabilitation & Health Center
Pomptonian School Food Service
Post Bulletin (MN)
Potato Board, The
President's Council on Physical Fitness & Sports
Procter & Gamble Company, USA
Produce for Better Health Foundation (5-A-Day)
Produce Business
Produce Marketing Association
Produce Productions, Inc.
Project NOW Community Action Agency
Public Voice for Food & Health Policy
Pumpkin Circle
Quaker Oats Company, The
Randall Foods Products, Inc.
RC Fine Foods
Sabatasso Foods, Inc.
Scholastic, Inc.
Second Harvest Foodbank Network
Second Harvest--St. Paul
Second Harvest--Tri-State Food
Bank, Inc.
Seward Dairy, Inc.
Shape Up America
Share Our Strength
Simpson Housing Services
Snyder of Berlin
Society for Nutrition Education
Society of State Directors of Health, Physical Education and Recreation
Soup Kitchen of Minnesota
Southeast Alaska Health Consortium
Southern Frozen Foods
Soy Protein Council
Squab Producers of California
St. Francis Soup Kitchen (OH)
Sugar Association, The
Sunkist Growers, Inc.
Sunshine Biscuits
Sunshine Natural Market
Texas Citrus & Vegetable Association
Texas Produce Association
Tim's Cascade Chips
Tony's Food Service Division
Tone's
Townsend Culinary, Inc.
Tree Top, Inc.
United Soybean Council
United States Department of Education
United States Department of Health & Human Services
United Way of Monroe County (IN)
Urban Coalition, The
University Extension, University of Missouri
University Extension, Schuyler County
University of Cincinnati Nutrition Program & Nutrition Learning Center
University of Hawaii Cooperative Extension Service
Urban Family Institute
Urban Mission Ministries, The
USA Dry Pea & Lentil Council
USA Rice Federation
USA TODAY
Van Camp Seafood Company, Inc.
Vegetarian Resource Group
Virginia Apple Growers Association
Voices for Children in Nebraska
Walnut Hills/Over The Rhine Kitchen
Walt Disney Company, The
Warren County (OH) Head Start
Wawona Frozen Foods
West Virginia Association of Family & Consumer Science
West Virginia WIC Program
Wheat Foods Council
Wisconsin Nutrition Project
Wisconsin Rural Development Center, Inc.
World Hunger Year (Kids Can Make A Difference)
Wyoming Extension
Zartic, Inc.
\1\ As of March 17, 1997.
Question. Last year, Secretary Haas indicated to this Committee
that the Food and Consumer Service was working with the Economic
Research Service to quantify the dollar value of private sector
contributions to Team Nutrition; that the analysis was to be completed
shortly and would be provided to the Committee. We did not receive a
copy of that analysis. Would you please provide a copy for the record.
Answer. A copy of the analysis quantifying dollar value of private
sector contributions to Team Nutrition is provided for the record.
[The information follows:]
Team Nutrition Leveraging Federal Investment Through Private Public
Partnerships 7/10/96
Public-private partnerships are critical to the success of Team
Nutrition, to ensure that Team Nutrition messages reach children
through the media they use, to provide multiple, reinforcing messages,
and to leverage scarce Federal resources with private sector support.
Team Nutrition has developed an extensive network of partners and
supporters, including agreements with two-hundred-forty partners.
USDA has focused on the leveraged value of public resources
invested with private partner organizations through cooperative
agreements with BVPD, Inc. (Disney) and Scholastic, Inc. Our analysis
to date has focused on contributions from Disney associated with the
production and airing of public service announcements (PSAs) and Team
Nutrition materials developed and distributed by Scholastic, Inc.
disney--a wise investment in children's health
Disney, in cooperation with Team Nutrition, has developed four PSAs
featuring Disney characters from the movie The Lion King. Two of the
four PSA's have been made available to all broadcast TV stations,
networks and cable services for airing at their discretion. The third
PSA will be released in June. Disney has also provided USDA with the
rights to use Lion King characters on Team Nutrition materials. These
images have been used on classroom and cafeteria posters and
incorporated into publications to introduce grade school age children
to the food guide pyramid concept and to highlight the importance of
choosing foods that promote health.
--In the first year alone, for every dollar we invested in Disney, we
are leveraging ten dollars of private resources.
--We conservatively estimate that the PSAs will receive at least $4
million in free air time over the course of just one year.
--USDA did not pay any money to license the Disney characters.
Private sector firms would have to pay millions for these
rights. Private-public partnerships are critical to leverage
scarce Federal resources with private sector support.
--USDA's $395,000 partnership with Disney is producing nutrition
education and promotion materials that teach children to make
food choices for a healthy diet.
--The value of the PSAs alone exceed the cost of the investment. The
production cost of one 30 second PSA ranges from $120,000 to as
much as $300,000.
kids are getting the message
USDA's partnership with Disney provides access to children in ways
public investment alone could never achieve. One out of every two
children in America has seen The Lion King. It allows USDA to reach out
to children with universally recognized characters. Through Disney's
cable network, broadcast television and video rentals we communicate to
children through multiple, reinforcing channels, in a language they can
understand and in ways they can relate to and accept.
--The PSA's are shown 5 days a week on Disney Afternoons which is
available in over 90 percent of the country.
--The PSA's are shown every day on the Disney Channel which reaches
15 million subscribers.
--Disney estimates that every day at least 580,000 children between
the ages of 2 and 11 are viewing Disney Afternoons when PSA's
are shown.
--Disney has also included the PSA's in three movie videos for rental
throughout the country, each of which is expected to be viewed
27 million times. Disney also included the PSA's on three Lion
King cartoon videos.
--USDA tested the PSA's and found that 90 percent of children liked
them and most understood the messages to eat more fruits,
grains and vegetables, and make healthy food choices.
--The PSA's are reaching children--data from our Team Nutrition pilot
communities indicate that nearly two-thirds (63 percent) of the
children in four pilot sites had seen the PSA's.
scholastic--critical school access
USDA entered into a cooperative agreement with Scholastic Inc., a
leading publisher and distributer of educational materials, to develop
Team Nutrition in-school curricula for pre-K to 12th grades. Scholastic
estimates the value of services provided to FCS at $3.0 million. FCS
paid $1.7 million.
--The first 10,000 Team Nutrition Schools are receiving Scholastic
Classroom Kits at no charge.
--USDA negotiated a discounted price ($55) for Scholastic materials
that will save schools half the normal cost of the package
($110). By facilitating the distribution of these kits at one-
half their normal retail price, FCS will be leveraging its
investment by $1.7 million over four years.
--In addition to the services it has already provided, as part of its
cooperative agreement with FCS, Scholastic has agreed to
solicit sponsorship for the distribution of materials from
corporations and associations in order to provide kits to low-
income schools at no cost. Scholastic has estimated that this
will create an additional $2 million in private sector support.
The combination of donated services, discounted material
prices, and private donations will provide USDA with a $3
return for every Federal dollar invested.
use, reuse and repackage
USDA is reinforcing Team Nutrition messages and stretching Federal
investment by using materials developed by Disney and Scholastic, Inc.
in multiple, reinforcing ways.
--Nutrition education activities developed for classrooms have been
adapted and repackaged to provide parents and community groups
that reach children on a daily basis with active, hands-on
learning activities.
--Scholastic ``Take Out,'' a parent newsletter, provides parents with
information to reinforce classroom messages.
--Food, Family & Fun A Seasonal Guide To Healthy Eating, features
activities developed by Scholastic, the Disney characters
Pumbaa and Timon, and recipes adapted from school menus. The
book provides family learning activities that make nutrition
fun.
--Disney PSA's have been incorporated into classrooms curriculums,
reinforcing and expanding the messages that children see on
television.
--Scholastic articles in a wide array of publications targeting
students, teachers, administrators and coaches feature Team
Nutrition messages.
Question. In its fiscal year 1997 report, the Committee encouraged
the Department to establish a panel to review and evaluate food service
training grant applications submitted by States to ensure the award of
funds to the highest quality projects benefiting the maximum number of
students and school districts. Have you done this?
Answer. Yes, the FCS did establish a panel of headquarters and
Regional office FCS employees to review and evaluate food service
training grant applications. This panel followed evaluation criteria
designed to ensure high quality projects that would benefit the largest
possible number of students and school districts. However, FCS did not
establish a panel of outside parties to review and evaluate Team
Nutrition (TN) Training Grants for Healthy School Meals because it was
determined that this could create a conflict of interest.
Question. Please explain the Department's procedures for reviewing
and evaluating food service training grant applications, including who
participates in this process.
Answer. All Team Nutrition (TN) Training Grant Applications that
meet the published deadline for submission are screened for
completeness and conformity to the requirements stated in the
application package. Applications meeting the screening requirements
are then reviewed competitively by a panel composed of FCS staff. The
panel reviews and ranks each application based on the technical
evaluation criteria outlined in the application package and provides
explanatory comments based on the criteria. Based on the availability
of funds the highest ranking applications are then awarded funding. In
1996, all TN Training Grants were funded.
Question. Please describe the cooperative agreements with the
National Food Service Management Institute (NFSMI) funded with the
$800,000 provided for fiscal year 1997. Of the $10 million requested
for the school meals initiative for fiscal year 1998, how much is
included for cooperative agreements with the NFSMI? What cooperative
agreement work is planned for fiscal year 1998?
Answer. Two Cooperative agreements were funded by the National Food
Service Management Institute with the $800,000 provided in fiscal year
1997. One is a National technical services project that the Institute
will manage in cooperation with USDA/Food and Consumer Service and
State Agencies. This project will provide one-on-one assistance to
nearly 100 local schools on site with menu planning, quality food
production, food procurement practices and nutrient analysis of menus.
This project will target small to medium school systems across the
Nation. Schools will request the service through their State Agencies.
The Institute will be responsible for the training and assignments of a
cadre of ``out-post'' nutrition and food service consultants who will
respond to these requests. The second project will be the continuation
of the Customer Service Help Desk into its third year. This project
provides an 800 number phone line as well as an Internet address for
the use of local school food service staff. Questions are answered and
technical assistance and materials are provided in the areas of menu
planning, nutrient analysis, food systems management, recipes, food
production, Dietary Guidelines for Americans, marketing of healthy
meals and quantity food service equipment, etc. Currently the Institute
is receiving an average of 150 questions per month including phone and
Internet requests.
In fiscal year 1998, funding for the National Food Service
Management Institute is planned at $500,000. Currently, the Agency is
providing a yearly sum of $250,000 for the ongoing services of the
Customer Service Help Desk. Projects other than those discussed above
have not yet been identified. The National Food Service Management
Institute and USDA/FCS work together with the Institute's National
Advisory Committee to determine major projects and priority needs. The
National Advisory Committee is made up of representatives from State
Agencies, Local Programs, professional organizations, universities,
food industries and Federal Agencies. The National Advisory Committee
met on March 21-23, 1997.
Question. Please explain how the Team Nutrition in-school and other
nutrition education materials which you have developed, produced and
disseminated are being used by schools, teachers, parents, and
communities to educate children to make healthy food choices.
Answer. Scholastic, Inc., in cooperation with USDA, developed an
in-school curriculum which is the centerpiece of the elementary school
material. This curriculum incorporates nutrition education and
information into other curriculum area such as math, science, social
studies and health. With this approach, children can be provided with
nutrition information throughout the year. The objective is to raise
the children's awareness of nutrition to encourage them to make
behavior changes. We want them to make food choices that result in a
healthy diet. To date, more than 20,000 of these kits have been
distributed. The kits cover pre-kindergarten to kindergarten, grades 1-
2 and grades 3-5.
Schools across the country have begun to use the Team Nutrition
materials to engage children, eager to participate in hands-on
activities. They are reinforcing positive nutrition messages through
colorful posters displayed around the school--in classrooms and the
cafeteria alike. In addition, they are conducting health, food or
nutrition fairs which provide children the opportunity to taste test
new foods, to learn how to read a nutrition label, plant a Team
Nutrition garden, study the foods used in different regions of the
Nation, assist food service staff in preparing a meal or any number of
other activities which provide children the opportunity to experience
and learn about food in fun ways.
Parents are becoming involved by participating in these fairs and
through the parent materials provided to them. Materials developed and
distributed in cooperation with PTA include parent Tip Sheets and the
Team Up At Home activity booklet which is filled with fun educational
activities for parents to do with their children. These materials are
designed to reinforce the positive nutrition education messages
children are receiving at school.
Communities are involved through the Cooperative Extension Service.
The Community Nutrition Action Kit has received overwhelming positive
response and is being utilized by Extension staff as well as public and
private health professionals. All these efforts are directed toward
educating children about the importance of the food choices they make.
They are responsible for what they choose to eat which determines how
healthy they are.
research and evaluation
Question. The fiscal year 1998 request proposes $17 million to
partially restore funding for research and evaluation in the food and
nutrition assistance programs. As you are aware, funding for research
and evaluation was reduced to $7.5 million for fiscal year 1997 in
large part due to constraints on discretionary funding. However, there
was also concern over the value and priority of the research work being
conducted. What process is used to make sure that only priority work is
funded, and to discontinue any ongoing work that may not be of
particular value?
Answer. Every year FCS follows a formal process to ensure that
research studies are relevant to the concerns of Congress, policy
officials, and other stakeholders. In doing so, FCS attempts to respond
not only to current policy information needs, but also to anticipate
emerging or future needs.
In the planning process, the highest priority goes to the formal
and informal mandates received from Congress, these studies are funded
before any others are considered. If sufficient funds remain to address
additional policy questions, FCS reaches out simultaneously to policy
officials and operating managers of food assistance programs; officials
in other government agencies including the Congressional Budget Office,
Congressional Research Office, other Federal agencies, and associations
and public interest groups with a stake in food assistance. FCS seeks
not only areas of important policy information needs, but also
opportunities to collaborate with others to leverage existing resources
as much as possible.
With these views in hand, the FCS prepares a 2-year Research &
Evaluation Agenda, balancing the available resources with the most
pressing policy information needs. The plan is reviewed by all
operating divisions within the Agency, endorsed by the Agency
Administrator, and submitted to the Under Secretary for Food,
Nutrition, and Consumer Services for review and approval. Each project
in the approved plan that requires advisory and assistance services--
including virtually all research contracts--is individually reviewed
and approved again by the Under Secretary before any funds are
committed.
The 2-year plan is revisited in mid-stream to ensure that
previously identified plans are still policy-relevant and adjusted as
needed to reflect current funding levels. The Agency also reviews our
ongoing studies continuously to endure their continued relevancy and
priority, again making mid-course adjustments if needed.
FCS constantly seeks to improve this process to ensure that our
work responds to the needs of all our audiences.
Question. For each of the food assistance programs, please identify
the amount of funding spent on research and evaluation in each of
fiscal years 1993-97 and proposed for fiscal year 1998, identifying the
study funded, its purpose, who is carrying out the study, its cost,
whether it is considered a new or ongoing study, and the estimated
completion date.
Answer. The requested information for studies receiving funds in
each of fiscal years 1993-97 is provided for the record. Because the
procurement process for fiscal year 1997 studies is not final, some
information on 1997 studies is still unknown.
The fiscal year 1997 appropriation reduced the funds available for
research and evaluation from $18.2 to $7.5 million. The President's
budget request includes $17 million to partially restore these accounts
to their previous levels. At the level requested for fiscal year 1998,
FCS would use the funding to:
--Help States identify effective and efficient ways to design and run
programs using the new flexibility provided by welfare reform.
What works best in moving clients to self sufficiency? Which
State work programs are most effective in moving the able-
bodied into work? How can States take advantage of new options
to increase child support payments, encourage personal
responsibility, and reward work?
--Respond to Congress' mandate to study the effects of welfare reform
on CACFP. Without these funds, FCS cannot address critical
questions posed in the legislation.
--Develop cost-effective ways to improve program integrity and reduce
administrative costs, focusing on operational improvements to
reduce error and fight trafficking. Additional funds would
enable extensions of ongoing food stamp research on recipient
and retailer trafficking to better target investigations and
focus WIC research on improving program management and
efficiency. For example, how can States most efficiently manage
food package and administrative costs?
--Respond to recommendations from the scientific community to
strengthen the WIC Program, including development of tools to
support eligibility determinations.
--Continue development and evaluation of cost-effective EBT systems
for WIC.
--Sustain critical updates of the characteristics of food stamp and
WIC participants and track compliance with Congressionally-
mandated nutrition standards for school meals.
[The information follows:]
[Clerk's note.--The summaries of obligations for 1993-97 are not
printed in the hearing record but are available for review in the
subcommittee's files.]
4Question. Last year the Economic Research Service indicated to
this Committee that it had expanded and given elevated priority to work
in the food, nutrition, and consumer service area. What specific work
has the ERS carried out in each of fiscal years 1996 and 1997 at the
request of or in collaboration with the Food and Consumer Service
(FCS)? Is this work funded by the ERS, or by the FCS on a reimbursable
basis? What work is planned for fiscal year 1998?
Answer. FCS and the Economic Research Service (ERS) have a mutual
interest in research and analysis of the domestic food and nutrition
programs. The Agency has worked with ERS in recent years to make the
most efficient use of common data and complementary expertise. Our
collaboration has taken two forms.
First, staff in FCS often consult with staff in ERS to draw on
their professional expertise in particular areas. At the request of FCS
in 1996, for example, ERS staff participated in an interagency working
group on food security measurement, consulted on the design and
analysis of two National surveys of Food Stamp Program participants and
authorized retailers, served on an interagency expert panel on the
feasibility of a rural food price monitoring system, and analyzed
bidding procedures used to obtain WIC infant formula rebates. These
consultations were funded by ERS.
Second, on some occasions FCS has found it more cost-effective to
reimburse ERS for services that might otherwise be provided by a
contract or grant. In 1996, FCS and ERS negotiated a Food Stamp Program
Research Agreement in which FCS provided ERS $250,000 in return for
four basic research projects of mutual interest, including a comparison
of food expenditure measures derived from the Food Security Supplement
to the Current Population Survey with measures derived from the
Consumer Expenditure Survey, an analysis of the relationship between
food sufficiency and nutrient intakes, an analysis of measures of well-
being collected as part of the Survey of Income and Program
Participation, and a concept paper on issues, problems, data needs, and
modeling approaches to develop comprehensive economic models of food
assistance and agricultural programs. In addition, FCS provided ERS
$25,000 to support purchase of a commercial data set of prices paid for
food in supermarkets.
With the reduction in appropriated funds for research in 1997, FCS
was unable to continue the reimbursable agreement with ERS although the
Agency continues to consult with them as appropriate. In particular,
ERS staff are part of an interagency working group assembled to respond
to the Congressional mandate for a study of the effects of allowing the
purchase of vitamin and mineral supplements with food stamps. With
funding at the level requested for 1998, FCS would again look for
opportunities to coordinate and support research of mutual interest.
______
Questions Submitted by Senator Bumpers
wic caseload reductions
Question. You indicate that without the supplemental request, WIC
caseload would fall from 7.4 million to 7.0 million. What portion of
this reduction would include removing current participants from the
program and what portion of this reduction would include not replacing
participants who are no longer eligible?
Answer. It is not possible to estimate the incidence of one
strategy over another for caseload reduction. Depending on their
specific circumstances, States utilize a number of strategies to bring
their caseloads down when the need arises, depending on their specific
situations. FCS does not require reporting of such data, and have no
basis for estimating this information.
The expectation is that States will continue to do their best to
carefully manage their caseloads and closely scrutinize and monitor
their obligations, making adjustments to caseload as necessary, by not
certifying persons, or by discontinuing benefits mid-certification.
Most State data systems identify the certifications due for the
upcoming month, so State agencies are aware of attrition rates for
currently enrolled participants. Consequently, caseload reductions can
be achieved effectively, and with least disruption to program
participants, by either certifying only high priority individuals or by
not doing any new certifications. However, if gradual attrition does
not successfully achieve needed caseload reduction goals, State
agencies may discontinue benefits mid-certification. This latter
strategy is encouraged only as a last resort, when quick impact on
caseload and expenditure levels is imperative.
wic immunization
Question. Would you please provide an update on your activities to
improve immunization services?
Answer. One of the major public health challenges of this decade is
to improve our Nation's capacity to deliver age-appropriate
immunizations to infants and young children in need. Failure to
vaccinate preschool-aged children resulted in a resurgence of measles
cases during 1989-1991 with over 8,000 cases of measles and 29 deaths
among children in this age group alone.
The FCS and the Centers for Disease Control and Prevention (CDC),
Department of Health and Human Services (DHHS), have an ongoing
cooperative effort to increase immunization rates among preschool-aged
participants in the WIC Program. Through a strong partnership, FCS and
CDC, along with State cooperators, are working to improve the quality
of services and the health status of children under 2 years of age who
are in need of nutrition assistance and/or immunizations.
As a result of this National initiative, numerous special
immunization promotion activities are taking place.
[The information follows:]
--In an effort to deliver needed immunizations to preschool-aged
children, FCS and CDC sent a letter to all State Health
Officers (January 1995) to encourage State Health Departments
to promote a continuing partnership between the WIC and State
Immunization Programs.
--FCS and CDC have developed a National Strategic Plan as a general
guideline for States to consider using to facilitate an
increase in immunization coverage rates among WIC participants.
Many of the ideas advanced in the plan were adapted from State
initiatives that employ creative service delivery and cost
sharing approaches.
--CDC, in conjunction with WIC State agencies, conducted
demonstration projects in several cities to determine the most
effective methods of increasing access to immunization through
the WIC Program. Data from these projects show that intensified
collaboration and resource sharing between State/local WIC and
immunization programs improve the service delivery capacity and
quality of both programs.
--CDC and FCS supported the American Academy of Pediatrics and other
organizations in producing a video which explains to low-income
parents the importance of immunizations.
Current Status
--FCS is an active member of the Interagency Committee on
Immunizations which is implementing an action plan to improve
immunization services for preschool-age children and target
resources to high-risk and hard-to-reach populations. FCS is
also an active participant of the Immunization Education and
Action Committee of the Healthy Mothers, Healthy Babies
Coalition and the National Vaccine Advisory Committee.
--Through the WIC Program and State and local program administrators,
FCS cooperates with CDC and many other national organizations
to actively promote the annual National Infant Immunization
Week.
--The National Association of WIC Directors (NAWD), the Association
of State and Territorial Health Officials (ASTHO), CDC, and FCS
co-hosted a WIC immunization promotion conference, entitled
``Working Together for Healthier Children,'' February 12 and
13, 1997. The conference fostered positive communication at the
State level between Immunization Programs and the WIC Program
by increasing understanding of each programs' goals and
objectives and highlighting win--win situations in State and
local WIC and immunization partnerships. The conference also
focused on State WIC Directors' and Immunization Program
Managers' concerns.
--FCS, CDC, NAWD, and ASTHO have formed the WIC/Immunization Research
and Evaluation Subcommittee. The purpose of the this group is
to coordinate research and evaluation activities directly
related to immunization promotion efforts in WIC. The
Subcommittee facilitates and reports on cost-effective
strategies that improve vaccination coverage rates among WIC
participants.
--The Administration's Childhood Immunization Initiative provides
funds to States to strengthen their immunization
infrastructure. These funds make vaccination services more
widely available by helping public programs buy more vaccines
and improve community service and outreach efforts. Many States
use the funds to extend clinic hours, hire more staff, increase
education efforts, and help create a national tracking system.
FCS has been active and supportive of strengthening State
Immunization Information Systems as a major initiative to improve
immunization status assessment and referrals among WIC children. To
further promote this linkage, in fiscal year 1996 FCS awarded grants
totaling $946,793 for State WIC/Immunization System Linkage Grants to
nine WIC State agencies to design, develop, and implement information
system linkages between State Immunization Information Systems and WIC
data systems at the State and local levels. Made possible through
funding from the Centers for Disease Control and Prevention's National
Immunization Program, the purpose of this partnership is to enhance
automation capabilities in WIC clinics to facilitate accurate and
efficient assessment of the immunization needs of WIC infants and
children. Grants were awarded to the following States: Massachusetts,
Rhode Island, Florida, Texas, Chickasaw Indian Nation, Virginia, Iowa,
Nevada and Alabama.
wic farmers' markets
Question. In what ways has it supported rural economies?
Answer. Approximately $9,070,553 (Federal funds plus matching funds
from non-Federal sources) in WIC Farmers' Market Nutrition Program
(FMNP) coupons were redeemed last year in 1,231 farmers' markets, many
of which were in rural communities. The FMNP combines incentives for
local agricultural producers with incentives for WIC participants to
make healthy food choices. Based on the most recent survey data
available, compiled from a 1995 survey of farmers participating in the
program, 84 percent said that participation in the FMNP increased their
sales. In addition, 35 percent increased fruit/vegetable production and
32 percent stated that they plan to grow a wider variety of fruits or
vegetables next year because of their involvement in the FMNP. The
FMNP's emphasis on market development, including its provision of an
additional 2 percent in administrative funds for this purpose, has
increased the number of farmers' markets in rural areas.
Farmers' markets have proven to be a valuable outlet for family
farmers to directly market their produce, often providing the primary
source of revenue for these farmers. The Department's 1996 National
Farmers' Market Directory reports that significant data document the
strategic marketing advantages that local producers gain by selling
through these facilities, including improved profit margins. This
improved profit margin for farmers translates into improved revenue for
rural economies. The Directory goes on to state that this method of
direct marketing experienced phenomenal growth nationally in the last 2
years. The Directory documents 2,410 farmers' markets operating in the
United States during the 1995 calendar year, an increase of 655 markets
over 1994. This growth can be attributed in part to this program and
its emphasis on market development.
Question. In what ways has it improved the nutrition in-take of WIC
participants?
Answer. The WIC Farmers' Market Nutrition Program (FMNP) promotes
the consumption of more vitamin and fiber-rich fresh fruits and
vegetables. The FMNP's direct linkage of farmers and WIC participants
has enabled low income people to become acquainted with where their
food comes from, to meet the people that grow it, and to learn
preparation tips from the growers. This is a valuable educational
lesson for many of our FMNP participants who had never shopped at a
farmers' market prior to their participation in the program. Based on
1995 survey data provided by FMNP State agencies, 71 percent of
recipients who responded to the survey said they ate more fresh fruits
and vegetables during the FMNP season. In addition, 77 percent said
they planned to eat more fresh fruits and vegetables all year round.
Question. To what extent is the cost of this program, item for
item, higher than expenditures for the regular WIC program?
Answer. FCS can not provide an item for item cost comparison of WIC
Farmers' Market Nutrition Program (FMNP) expenditures to WIC
expenditures, either for the foods in the program or the administrative
and services costs of the programs. Comparative data is not reported to
the Department, and the Program requirements, in terms of foods
provided, services offered and administrative responsibilities required
are vastly different.
With regard to foods provided, for example, the FMNP permits
participants to select fresh fruits and vegetables up to a set dollar
value on coupons used much like store coupons. The State defines which
locally grown fruits and vegetables may be eligible for purchase. The
FMNP foods are designed to complement WIC foods, which include an
assortment of staple, versatile, readily available, and economical
nutritious foods such as eggs, juice, cereal, and dry beans, peas or
peanut butter. Using the most recent data, the Agency estimates that in
fiscal year 1995, the WIC food package cost approximately $33 every
month for a woman participant. The FMNP benefit, which includes both
Federal and non-Federal share, averaged annually about $14 for fiscal
year 1995, and may be provided on a participant basis or for an entire
household, depending on State design of the FMNP.
With regard to non-food expenditures, the FMNP and WIC are very
different. For example, FMNP has a market development component which
is unique to this program, while WIC has other unique and costly
administrative responsibilities such as nutrition risk assessment,
including tests for anemia; certification of eligibility; referrals;
immunization assessment; drug, alcohol and tobacco use counseling;
voter registration; and others. Total administrative costs for the FMNP
cannot exceed 17 percent of the funds allocated for the program. WIC
Program nutrition services and administration expenditures represent
about 27 percent for fiscal year 1996 of total program expenditures,
however, of course, WIC's programmatic requirements are different from
those of the FMNP, as noted above.
commodity assistance program
Program duplication
Question. The request for the Commodity Supplemental Food Program
includes $86 million in support of 123,900 women, infants, and
children.
Is this duplicative of the WIC program?
Answer. The budget request for the Commodity Supplemental Food
Program (CSFP) is not duplicative of funding for the Special
Supplemental Nutrition Program for Women, Infants, and Children (WIC).
Section 17(c)(3) of the Child Nutrition Act of 1966 prohibits
recipients from participating simultaneously in the CSFP and WIC.
In addition, the formula used to determine the amount of funds
needed to support the WIC-eligible population excludes women, infants,
and children participating in the CSFP. Therefore, the budget request
for the CSFP in no way duplicated the amount requested for WIC. Also,
over 60 percent of CSFP participants are elderly persons, and the
elderly are categorically ineligible for WIC. While pregnant,
breastfeeding, and postpartum women, infants and children participate
in both programs, nonbreastfeeding women between 6 and 12 months
postpartum and children between 5 and 6 years of age are categorically
eligible for the CSFP, but not for WIC. Furthermore, CSFP sites serve
some areas where WIC is not readily accessible.
Question. In addition to the similarities of CSFP and WIC, in terms
of beneficiaries, there appear to be other programs administered by the
Food and Consumer Service that serve the same or similar populations.
Can you provide information regarding duplication within various
nutrition programs that could, at least potentially, serve the same
clientele?
Answer. The Food Stamp Program (FSP) and the Food Distribution
Program on Indian Reservations (FDPIR) are designed to help a broad
array of low-income households obtain nutritionally adequate diets.
Most other FCS nutrition programs are targeted to meet the nutritional
needs of specific population groups. The targeted programs include the
Special Supplemental Nutrition Program for Women, Infants, and Children
(WIC), the Commodity Supplemental Food Program (CSFP), the Nutrition
Program for the Elderly (NPE), and the Child Nutrition Programs. The
Child Nutrition Programs are the National School Lunch Program (NSLP),
the School Breakfast Program (SBP), the Special Milk Program (SMP), the
Child and Adult Care Food Program (CACFP), the Summer Food Service
Program (SFSP), and the Homeless Children Nutrition Program. Targeted
programs provide prepared meals or supplemental food packages and other
nutrition services to specific population groups. Finally, The
Emergency Food Assistance Program (TEFAP) is designed to supplement the
diets of low income households with food items.
It is possible in a limited number of cases that an individual may
participate in food stamps as well as more than one targeted benefit
program (i.e., WIC and CACFP). However, as these programs are designed
to meet needs which are sufficiently different (i.e., nutritious
supplemental foods for individual consumption and nutrition education
in WIC versus nutritious CACFP meals in a child care setting), this
should not be considered duplication.
It is also possible that an individual who participates in a
targeted program may also reside in a household participating in the
FSP or FDPIR, e.g., a child living in a FSP household who also
participates in the NSLP. However, these and other arrangements where
individuals participate in both the FSP or FDPIR and a targeted program
do not constitute duplication of benefits, as the programs are designed
to meet different needs.
Data from the 1977-78 National Food Consumption Survey (NFCS), the
most reliable data available for this purpose, indicate that
significant nutritional improvements can be made by supplementing the
FSP with targeted programs. The NFCS found that only one in ten
households with food expenditures comparable to the maximum FSP
allotment consumed 100 percent of the Recommended Daily Allowance (RDA)
of 11 key nutrients. NFCS also found that the proportion of households
attaining this nutritional level increased rapidly with increased food
expenditures: 1 in 3 households with expenditures one and one-half
times the maximum FSP allotment and 2 in 3 households with expenditures
two times the maximum FSP allotment attained this nutritional level.
The NFCS data suggests that FCS's targeted programs complement the FSP
and FDPIR and play an important role in helping individuals with
special nutritional needs (such as children and the elderly) who reside
in low-income households realize nutritionally sound diets.
Question. Are there opportunities to consolidate any of these
programs?
Answer. A consolidation opportunity that FCS is currently pursuing
within the Child Nutrition (CN) programs is combining the National
School Lunch Program (NSLP) and the School Breakfast Program (SBP) into
a unified School Nutrition Program. FCS is currently developing
regulations to implement this consolidation. In addition, the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996 (Public
Law 104-193), required that FCS develop a proposal to consolidate the
NSLP, SBP and the Summer Food Service Program (SFSP). The Agency will
be developing a proposal in accordance with the requirements of the law
to integrate the portion of the SFSP which operates in schools into the
consolidated School Nutrition Program.
Although the CN programs serve similar constituencies and provide
similar benefits, the opportunities for increased efficiencies through
consolidations, other than those noted above, are minimal. A table
which displays all the CN programs and their key characteristics is
submitted for the record. It shows that the main difference between the
various CN programs is the location where benefits are provided. The
administrative network which schools belong to is very different than
the administrative networks for day care centers and homes. The same is
true of the networks for summer camps and homeless shelters. Other
differences associated with location are the number of children being
served, the amount of time the children are at the serving site each
day, the cost associated with providing a meal, and the expertise that
FCS can reasonably expect of the food service operators. These
differences necessitate different regulations for reporting
requirements, oversight and review requirements, nutrition
requirements, site approval standards, accounting, etc. While Special
Milk Program (SMP) benefits are provided in schools, as are NSLP and
SBP benefits, the SMP operates only in schools without NSLP or SBP
operations and provides students only with milk. In the case of the
Summer Food Service Program (SFSP), the non-school SFSP sites, unlike
NSLP/SBP schools, typically operate only a few months during the year,
do not experience stable attendance, do not all have well developed
administrative support structures, and do not have comparable food
preparation expenses.
[The information follows:]
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Benefits provided to Location(s) benefits
Program Benefit recipients recipients provided
----------------------------------------------------------------------------------------------------------------
National School Lunch Program Elementary & secondary school Prepared lunches...... School.
(NSLP). students.
School Breakfast Program (SBP)... Elementary & secondary school Prepared breakfasts... School.
students.
Special Milk Program (SMP)....... Elementary & secondary school \1/2\ pints of milk... School.
students in schools without
the NSLP or SBP.
Summer Food Service Program Low-Income children, below age Prepared meals........ Summer camps,
(SFSP). 18, living in low-income areas. schools, etc.
Child and Adult Care Food Program Children, below age 12, and Prepared meals........ Day care homes & day
(CACFP). disabled adults in day care. care centers.
Homeless Children Nutrition Homeless children in shelters.. Prepared meals........ Homeless shelters.
Program.
----------------------------------------------------------------------------------------------------------------
The other nutrition programs administered by FCS, in addition to
the Commodity Supplemental Food Program (CSFP) and the Special
Supplemental Nutrition Program for Women, Infants, and Children (WIC),
are the Food Stamp Program (FSP), the Food Distribution Program on
Indian Reservations (FDPIR), The Emergency Food Assistance Program
(TEFAP), and the Nutrition Program for the Elderly (NPE). The FSP and
FDPIR help a broad array of low-income families purchase nutritionally
adequate diets, while TEFAP, NPE, and the CN programs provide targeted
nutritional assistance to specific population sub-groups. The targeted
programs complement, but do not duplicate, the nutritional support
provided through the FSP and FDPIR.
A table which displays the FCS programs, except WIC and CSFP, and
their key characteristics is submitted for the record. Unlike the CN
programs, in which the location where benefits are provided is key,
this table shows there is no summary differentiating characteristic for
these FCS programs. Rather, what distinguishes them is the benefit
delivery system each program needs to meet its goal of providing
specific nutritional assistance to its target population.
For FDPIR the target population is low-income households on Indian
reservations who do not have access to retailers accepting food stamps.
Providing benefits to this population can require a distribution system
capable of delivering food to places on Indian reservations far away
from retail outlets. No other program in the table can provide benefits
comparable to FDPIR for households on reservations.
In the NPE the targeted population is the elderly who participate
in Department of Health and Human Services programs. Many NPE
recipients cannot prepare their own meals, and the NPE is the only
program in the table designed to provide prepared meals to immobile
elderly recipients. As you know, FCS has proposed in the past, and
still support the consolidation of NPE with its much larger sister
feeding program run by HHS. We recommend that these programs be
consolidated.
TEFAP a significant part of the targeted population is emergency
feeding centers (e.g. soup kitchens). TEFAP is the only FCS program
designed to provide bulk commodity shipments in support of emergency
feeding centers. The focus of the FSP, FDPIR, CN programs, TEFAP, and
the NPE are all different enough so as to require different benefit
delivery systems. This diversity causes FCS to believe that further
consolidation would not, at this time, produce noticeable savings or
efficiencies.
[The information follows:]
----------------------------------------------------------------------------------------------------------------
Benefits provided to Location(s) benefits
Program Benefit recipients recipients provided
----------------------------------------------------------------------------------------------------------------
The Emergency Food Assistance Emergency feeding centers & Commodities........... Emergency feeding
Program (TEFAP). needy individuals. centers &
households.
Nutrition Program for the Elderly Elderly participating in Prepared meals........ Group settings,
(NPE). Department of Health and Human households.
Services programs.
The Food Stamp Program (FSP)..... Low-income households.......... Food coupons.......... Retail grocery
outlets.
Food Distribution Program on Low-income households on Indian Food packages......... Indian reservations.
Indian Reservations (FDPIR). reservations.
Child Nutrition Programs (CN).... Children....................... Prepared meals........ Various away-from-
home locations.
----------------------------------------------------------------------------------------------------------------
Question. Would such consolidation result in savings?
Answer. The consolidation of the National School Lunch Program
(NSLP) and the School Breakfast Program (SBP) into the unified School
Nutrition Program is unlikely to result in more than minor savings for
State and local program administrators. The consolidation rule will
provide for some administrative efficiencies, but will not reduce
nutrition benefits to children. The FCS is currently working on a
proposed rule to consolidate the NSLP and SBP and has not yet completed
its formal assessment of the savings, if any, that will result from
this consolidation.
Consolidation of the USDA and HSS components of NPE would not
likely yield savings at the Federal level either. State and local
agencies administering these important food programs for the elderly,
including the unique meals-on-wheels program, would likely experience
significant efficiencies although cost savings potential appears slim
there too.
FCS believes that opportunities for significant further
consolidation do not exist at this time, and that such consolidation
would not produce further savings.
______
Questions Submitted by Senator Kohl
wic sugar cap
Question. USDA is proposing to reopen the issue of the sugar cap
for cereal eligible for the WIC program. For people who are
nutritionally at risk, as WIC recipients often are, it is critical that
opportunities are provided to maximize the nutritional value of all
food consumed, it order to achieve a close to a balanced diet as
possible.
Given that goal, I am concerned that any increase of the sugar cap
for WIC cereals above the current level will only increase intake of
empty calories by WIC recipients, at the expense of the more nutritious
foods that these WIC recipients so badly need.
It is my understanding that the sugar cap has been reviewed
numerous times in recent years, without significant change. Why is USDA
reopening this debate?
Answer. The Department is committed to ensuring that the Federal
requirements and other guidelines for the WIC Program are based upon
sound scientific evidence. The majority of contemporary studies fail to
document an association between sugar consumption and an increased risk
of developing the chronic diseases of coronary heart disease, diabetes
mellitus, obesity and hyperactivity. Therefore, the Department sought
public comment through a Federal Register Notice, published on March
18, 1996, on whether a change in the current 6-gram sugar limit for
WIC-eligible cereals was still warranted. FCS does not plan to change
the limit, but the Secretary has called for a review of permissible WIC
foods in total. So the sugar limits will be looked at again in concert
with all permissible foods.
Question. In December of 1996, in an effort to help bolster rapidly
falling dairy prices, Secretary Glickman announced his intentions to
increase the purchases of dairy products for the school lunch program
and other USDA nutrition programs.
Could you provide me with data to demonstrate how USDA increased
use of dairy products for nutrition programs since December, by volume
and value of product, relative to previous years?
Answer. The accelerated purchases of cheese for National School
Lunch Program (NSLP), for the period July 1996 through February 1997
shows a total of 58.3 million pounds valued at $90.6 million. For the
same period last year, July 1995 through February 1996, the total
cheese purchases were 55.5 million pounds valued at $77.7 million. It
cost FCS $8.6 million extra for current year purchases because of the
price increases for cheese. In addition, an accelerated purchase of 2.8
million pounds of cheese valued at $4.3 million was made, to support
the dairy industry.
In addition to the accelerated purchases of cheese for the NSLP,
the Department purchased for the Commodity Supplemental Food Program
(CSFP) $5 million in processed cheese for distribution in CSFP. The
Department also plans to purchase 2.5 million pounds of cheese valued
at $4.0 million to supply CSFP with sufficient product for the
remainder of fiscal year 1997.
The purchase and distribution of other dairy products is comparable
to prior fiscal years.
farmers' market nutrition program
Question. I have long been a supporter of Farmers' Market Nutrition
Program (FMNP) and was pleased to see the Administration's request for
an increase in that program in fiscal year 1998, to the $12 million
level. The FMNP program has been very successful in the three Wisconsin
sites where it has been implemented. However, it is my hope that more
Wisconsin sites could be started in the near future. In that context, I
have the following questions:
If the Subcommittee is able to fund the FMNP at the increased
levels proposed in the budget, how does USDA propose to distribute
those increased funds?
Answer. By law, the first priority for these funds is to restore
State agencies to their previous year's funding level. Of the remaining
funds, 75 percent would be allocated to currently participating State
agencies that request expansion funding. A funding formula, designed by
the Department in consultation with State agencies, is used to
distribute expansion. Basically, this formula ranks State agencies
according to their previous year's average FMNP grant per WIC
participant. Expansion requests are funded in rank order, beginning
with the State agency with the lowest FMNP grant per participant. The
remaining 25 percent would be allocated to new State agencies that are
seeking to initiate a WIC Farmers' Market Nutrition Program (FMNP). A
ranking process, based on factors specified in the law, is used to
allocate funds to new State agencies. The law requires allocation on
the basis of factors such as prior experience with a similar program,
State plans that have the greatest access to farmers' markets, the
highest concentration of eligible persons and such other factors as
determined appropriate by the Department.
Question. There has been some concern about the practice of funding
the FMNP as part of the WIC program. Given that concern, would USDA
support funding for the FMNP through AMS, or another agency other than
the FCS? Are there any reasons why such a transfer would be ill-
advised?
Answer. Because WIC participants or persons on a waiting list for
WIC services are the only persons eligible to receive Federal benefits
under the WIC Farmers' Market Nutrition Program (FMNP), it seems only
natural that the funding for the two programs should be administered by
the same Federal agency. FCS has worked closely with the FMNP State
agencies to establish an infrastructure for the operation of the
program, and is the only USDA agency with experience in the
administration of both grant and entitlement Food Assistance Programs.
AMS' strength is in administering direct marketing programs. As long as
the FMNP and WIC continue to be linked legislatively to a shared
population of recipients, FCS believes it is the best interests of both
Programs to be administered and funded through FCS.
The WIC Farmers Market Nutrition Program Association at one point
thought such a transfer of program administration might overcome
problems under current appropriations law regarding WIC and FMNP. Under
this legislation, annual funding for FMNP has for the last two years
been contingent upon the ability of WIC to sustain its current
participation with funding provided. Under this construct, FMNP can
only receive continued funding if not needed by WIC to sustain its
participation levels. This problem cannot be solved with such a
transfer of administrative responsibility to another USDA agency.
school meal dietary guidelines
Question. The Healthy Meals for Children Act was passed last
Congress to help provide flexibility in school lunch programs, while
still focusing on nutritionally balanced meals. I have been contacted
by school food service administrators in my state of Wisconsin, who are
concerned about the time it has taken for USDA action on regulations
for the law. This delay has an impact on their planning for the next
school year. Can you provide an update on the status of the regulations
and a timeline for implementation.
Answer. A proposed regulation to incorporate the traditional meal
pattern into the program regulations and to provide guidelines for
authorizing other reasonable approaches to meal planning is in
clearance. Since clearance procedures are quite extensive, it is
difficult to predict exactly when the rule might be published, but the
Agency anticipates that it will be available for public comment by late
spring or early summer.
In the meantime, it is worth noting that schools are already able
to continue to use the traditional meal pattern if they so choose,
since the Department issued guidance on this provision promptly after
the enactment of the Healthy Meals for Children Act. In fact, schools
currently have unprecedented ability to choose a meal planning system
that is right for them. Schools may select from two food-based meal
patterns as well as two methods of planning and preparing meals using
nutrient analysis. The Department is committed to authorizing other
reasonable approaches that can ensure the nutritional integrity of
meals served to children and the best use of Federal dollars.
______
Questions Submitted by Senator Leahy
wic farmers' market nutrition program
Question. I am a very strong supporter of the WIC farmers' market
nutrition program since it helps farmers, it helps communities set up
farmers' markets, and provides fresh farm products to WIC families. The
President requested a funding increase to $12 million for fiscal year
1998--which I support.
While Vermont participates in this program, I want to make certain
that additional states are able to participate in this program. Will
you work, if Congress appropriates sufficient additional funding, to
help make sure that the benefits of this program reach more states?
Answer. Yes, FCS will continue to work with the National
Association of Farmers' Market Nutrition Programs and our Regional
offices to provide information on the program to nonparticipating
States. FCS conducts a State Plan workshop every year at a National
farmers' market meeting in order to provide guidance to potential new
States on applying and completing a State Plan for the program.
Additionally, the Agency works with our Regional offices in order to
assist States in the application process. When FCS participates in
Departmental meetings or conferences regarding farmers or nutrition
with individuals not familiar with the program, the Agency provides
information about the program and encourages individuals to generate
State support in order to apply. FCS realizes outreach is very
important to potential new States and use many opportunities to promote
this effective program.
Question. One preliminary report issued by USDA some years ago
raised some concerns about the WIC farmers' market nutrition program.
Are you now convinced that this program is a good investment for
farmers, for WIC participants and for rural communities?
Answer. The Department is very supportive of the WIC Farmers'
Market Nutrition Program (FMNP). The FMNP supports local agricultural
economies consisting primarily of small resource farmers. At the same
time, the FMNP promotes the consumption of more vitamin-and fiber-rich
fresh fruits and vegetables. The FMNP couples incentives for local
agricultural producers with incentives for WIC participants to make
healthy food choices. The FMNP's direct linkage of farmers and
consumers has helped participants become acquainted with where their
food comes from, to meet the people that grow it, and to appreciate new
and different types of fresh produce. FCS believes the FMNP is a win-
win situation for both farmers and WIC participants.
wic infant formula rebates
Question. For each year starting in 1987 please list the amount of
dollar savings (in effect, additional funds for use by the WIC program)
generated by WIC infant formula cost containment procedures which were
put in place because they were either permitted or required under
federal statutory law (1987 and 1988) or were required by federal
statutory law (1989 through present). Also, please estimate how many
additional persons were able to be served through these recaptured
funds for each year.
Please break this down on a yearly basis and please do not include
cost containment savings for other WIC food items such as cereals.
Answer. Infant formula rebates received reduce the cost of infant
formula, thereby allowing the program to serve additional participants
per month within its annual appropriation. Provided for the record is a
break down of the infant formula rebates the WIC Program has received
since fiscal year 1988 and the additional participation the program was
able to serve. The amounts reflect rebates for all WIC foods earning
rebate dollars as infant formula rebates are not tracked separately.
However, the vast majority of rebate savings are associated with
contracts for infant formula.
[The information follows:]
------------------------------------------------------------------------
Estimated
participation
Fiscal year Rebates increase due to
rebates
------------------------------------------------------------------------
1987................................ ( \1\ ) ................
1988................................ $32,000,000 61,658
1989................................ 293,000,000 548,945
1990................................ 510,000,000 876,800
1991................................ 656,000,000 1,087,715
1992................................ 755,000,000 1,223,970
1993................................ 880,000,000 1,407,139
1994................................ 997,000,000 1,553,474
1995................................ 1,051,000,000 1,620,981
1996................................ \2\ 1,180,000,00
0 1,792,012
------------------------------------------------------------------------
\1\ Not available.
\2\ Rebates reported by State agencies as of 2/24/97.
food stamp ebt systems
Question. For years I have supported the elimination of the use of
paper food stamp coupons in favor of electronic benefits transfer
systems. I know USDA is making progress in this area. However, I think
more effort needs to be made or more incentives need to be offered to
states to get them to use EBT.
What concrete steps will USDA take to more greatly promote the use
of EBT instead of food stamp coupons?
Answer. FCS does not believe that a greater promotional effort for
use of EBT is needed at this time as most States are already well
positioned to have systems in place by the end of fiscal year 1999--the
Vice President's goal for EBT implementation. However, the Agency will
continue to provide technical assistance to these States, as well as
the remaining States, to assist in the meeting of the 1999 goal. The
Agency will approach the committee at a later time if any unforeseen
difficulties are encountered in realizing this goal.
Question. While I voted against the welfare reform cuts in
nutrition programs, I want to make certain that they are implemented
properly by the states.
Do you need additional research funds to make certain that states
implement these changes correctly and properly? If your answer is
affirmative, please indicate what amount of funding would permit you to
determine and monitor whether the state agencies are in compliance with
the new rules?
Answer. Yes, additional research funds are needed to help States
put programs in place that not only comply with the new rules but which
also most effectively promote personal responsibility, reward work, and
improve nutrition and health.
FCS plans to use some of the funds appropriated for 1997 to begin
to address the policy information needs raised by welfare reform, but
much more could be done. Continued funding at the fiscal year 1997
level will limit the Agency's ability to provide solid, policy-relevant
information to the States and to Congress. The research funding
requested in the President's budget will enable FCS to address a
broader range of policy information needs.
For example, with the requested funds, FCS would be able to help
States identify effective and efficient ways to design and run programs
using the new flexibility provided by welfare reform. FCS would like to
know what works best in moving clients to self-sufficiency, which State
work programs are most effective in moving the able-bodied into work,
how States can take advantage of new options to increase child support
payments, encourage personal responsibility, and reward work. There is
also a need to understand how these changes affect the nutrition status
of people the programs are intended to serve.
In addition, with the requested funding, FCS would be able to
respond more fully to the Congressional mandate to study the effects of
welfare reform on the Child and Adult Care Food Program. Without these
funds, FCS will not be able to address many critical questions posed in
the legislation. Moreover, FCS will not be able to address key
questions about the availability of care in targeted areas and the
importance of this program in supporting the transition from welfare to
work.
food program administration missions
Question. You made some very strong arguments for additional staff
to administer the nutrition programs and carry our your many missions.
I am very concerned about the cuts which were made in your staff while
your responsibilities greatly increased.
You are responsible for over 70 percent of the USDA budget
expenditures yet you represent a very small fraction of the total USDA
staff.
I am worried that this will interfere with your ability to prevent
or investigate fraud, to carefully monitor State and store compliance
with the rules, to properly implement program changes, and to carry out
other functions.
Please advise us about any potential needs you have for increased
appropriations for staff.
Answer. FCS needs to maintain its current staffing level. Our
fiscal year 1998 budget request only asks for a minimal increase to
fund half of the mandatory pay increases to support existing staff. In
recent years, the President has requested more staff and funding than
the Agency received in the appropriations, and this reduction in
resources has put the Food Assistance Programs at increased risk.
Staffing levels have diminished from 2,762 in 1980 to 1,750 today.
During the same time, demands on FCS staff have dramatically increased.
FCS certainly understands how important downsizing is to the Federal
government, especially to balance the budget, and the Agency is
committed to the National Performance Review and the Vice President's
goals of reducing the Federal workforce. To that end, FCS has been
diligent in implementing efficiencies, such as eliminating unnecessary
operations and overlap, capitalizing on information technology,
encouraging teamwork, and paring back services to employees to the
minimum necessary.
Despite all this, the cuts to FCS have been significant. The Agency
reached its fiscal year 1999 streamlining target 3 years ago. Since
fiscal year 1995, FCS has had to reduce its staff by 60 to 80 staff
years every fiscal year due to funding reductions in the Food Program
Administration (FPA) account. This has had an impact on FCS in two key
areas.
First, reductions are affecting the Agency's ability to properly
monitor and oversee the Food Assistance Programs and provide technical
assistance to State agencies. Due to funding reductions, FCS has
curtailed efforts that are crucial to monitoring sites and maintaining
Federal presence in the field. Staffing reductions have placed highly
labor-intensive activities such as store investigations and maintaining
program integrity at risk--a reduction in the National Food Stamp error
rate of just 1 percent can result in savings of over $230 million,
which is much more than paying for the staff needed to provide the
proper oversight. FCS feels that the cost of funding additional staff
in the FPA appropriation is millions of dollars less than the cost of
increased fraud and abuse in the programs. Meanwhile, external audits
from GAO and OIG have consistently cited insufficient staff to exert
proper oversight of State administrative costs and debt management
practices. If Congress does not maintain funding for the current
staffing levels, these important activities will suffer further.
Second, the reductions in staff are affecting FCS' ability to
adequately respond to program changes. FCS employees are forced to
react as crises arise, rather than look ahead and plan for the future.
The Agency is too busy attempting to remedy predicaments as they occur
and has little or no time to foresee potential problems and address
them early on to head off a crisis. Implementing new legislation, such
as Welfare Reform and the Healthy Meals for Healthy Americans Act,
impose significant, new, and ongoing administrative burdens on FCS.
These new laws effect comprehensive program changes and are extremely
important to the Food Assistance Programs. The CFO Act, the Government
Performance and Results Act (GPRA), and Nationwide implementation of
EBT are other examples of program changes to which the Agency is
required to devote resources.
FCS asks that you at least maintain our current staff level.
Mandatory pay raises increase the cost of each staff year every fiscal
year, so maintaining current staff levels requires small increases in
the FPA appropriation. If FCS must absorb the cost of increased
salaries, the only option is to further reduce staff. Eighty-five
percent of the FPA appropriation is for salaries alone, leaving us
little flexibility in absorbing new costs. The remaining 15 percent is
used for travel, training, and other expenses, such as rent, computer
support, and supplies, all of which have been reduced to the minimum
necessary. FCS wants to administer the programs as Congress has
intended, meet mission goals, properly respond to new initiatives, and
protect government funds from fraud and abuse.
The results of your support to the FCS staff will benefit all
involved--the needy, American children, taxpayers, as well as Congress.
The minimal funding it will take to support the staff will provide
America with programs that truly help those less fortunate, that
respond appropriately and effectively to new needs and changing
legislation, and that operate efficiently with savings to the taxpayer.
Subcommittee Recess
Senator Cochran. This will conclude our hearing today. We
appreciate the attendance of all witnesses.
Our next hearing will be on the budget request of the
Department of Agriculture's Natural Resources Conservation
Service, the programs and activities under that agency. That
hearing will be at 10 a.m. on Tuesday, March 18.
At 2 p.m. on Thursday of this week, we will have a special
hearing to explore alternatives to the dairy pricing system.
Those hearings will be held in room SD-138 of the Dirksen
Senate Office Building.
Until then, the subcommittee stands in recess.
[Whereupon, at 11:46 a.m., Tuesday, March 11, the
subcommittee was recessed, to reconvene at 10:11 a.m., Tuesday,
March 18.]
AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR
FISCAL YEAR 1998
----------
TUESDAY, MARCH 18, 1997
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:11 a.m., in room SD-138, Dirksen
Senate Office Building, Hon. Thad Cochran (chairman) presiding.
Present: Senators Cochran and Bumpers.
DEPARTMENT OF AGRICULTURE
STATEMENT OF JAMES R. LYONS, UNDER SECRETARY, NATURAL
RESOURCES AND ENVIRONMENT
ACCOMPANIED BY DENNIS KAPLAN, DEPUTY DIRECTOR, OFFICE OF BUDGET AND
PROGRAM ANALYSIS
Natural Resources Conservation Service
STATEMENT OF PAUL W. JOHNSON, CHIEF
ACCOMPANIED BY:
GARY A. MARGHEIM, ACTING ASSOCIATE CHIEF AND ACTING DEPUTY
CHIEF, SCIENCE AND TECHNOLOGY
THOMAS A. WEBER, DEPUTY CHIEF, MANAGEMENT
LAWRENCE E. CLARK, DEPUTY CHIEF, PROGRAMS
CAROLE JETT, ACTING DEPUTY CHIEF, SOIL SURVEY AND RESOURCE
ASSESSMENT
FEE BUSBY, DEPUTY CHIEF, SCIENCE AND TECHNOLOGY
ROBERT K. REAVES, DIRECTOR, BUDGET PLANNING AND ANALYSIS
DIVISION
Opening Remarks
Senator Cochran. The subcommittee on appropriations for the
Department of Agriculture and related agencies will come to
order.
This morning we continue our hearings, reviewing the
President's budget request for the Department of Agriculture
and other agencies that come under the jurisdiction of this
subcommittee.
This morning we are happy to have representatives of the
Natural Resources Conservation Service [NRCS]. James Lyons, the
Under Secretary for Natural Resources and Environment is here,
along with Paul Johnson, Chief of the Natural Resources
Conservation Service and others.
We welcome you, and we thank you for your cooperation with
our committee, and for the statements that you have submitted,
along with other materials from the President's budget that are
helpful to us.
And, Mr. Lyons, we ask you to proceed after I first yield
to my colleague, the distinguished Senator from Arkansas, who
is ranking member of this subcommittee for any comments that he
would have to make.
Senator Bumpers.
Senator Bumpers. Thank you, Mr. Chairman. In the interest
of expediting this, I will forgo an opening statement.
Senator Cochran. Mr. Lyons, you may proceed.
Opening Remarks by Under Secretary Lyons
Mr. Lyons. Well, thank you very much, Mr. Chairman and
Senator Bumpers, it is a pleasure to be here this morning.
I am joined today by, of course, Paul Johnson, Chief of the
Natural Resources Conservation Service, Dennis Kaplan, and his
staff. And also with me, I want to mention Larry Clark, Deputy
Chief of Programs; Bob Reaves, from the NRCS budget shop; and
Tom Weber, the Deputy Chief of Management who works with me on
conservation issues.
Mr. Chairman, NRCS, of course, is an agency that has a long
and, I think, successful history of helping farmers, ranchers,
and local communities change the face of this land; helping
them to practice conservation and manage their operations as
stewards to protect the natural resources that we all care very
dearly about.
Several things have made this success possible, not the
least of which has been the support of this committee, which
has given cause to conservation and I think demonstrated true
commitment to protecting the productivity and the stewardship
of the Nation's private lands. We appreciate your leadership in
that regard.
But perhaps the most important reason for the success we
have realized within NRCS is really attitude, a principle that
the agency's focus should be aimed high on the objective of
doing what is needed to help farmers, ranchers, and communities
produce as many environmental benefits as they can while
meeting the Nation's, in fact, the world's needs for food and
fiber.
Mr. Chairman, that is exactly what the budget we are here
today to discuss is about. What resources does it take? With
today's changing technologies and challenges, for NRCS to be
able to work effectively and in partnership with conservation
districts and our other Federal, State, and local partners, to
help agriculture produce not only food and fiber, but clean
water, productive and high-quality soils, ample wildlife
habitat, and many of the other environmental benefits that we
in this country care about.
What does it take to help American private lands fulfill
their promise, as Chief Johnson has said, to make them truly a
geography of hope? These are key questions we had in mind as
this budget was put together, and that we encourage this
committee and the Congress to remember as you work out the
details of our 1998 budget.
We believe that this budget, structured and constrained as
it is, due to our joint commitment to balance the budget,
answers many of these questions.
The budget retains its emphasis on conservation operations
as the key to getting conservation on the land, asking for
increases to cover some of our pay costs, and in particular to
increase the level of work on private grazing lands, increase
the rate at which we are converting our operations to
geographic information systems, and to enhance our ability to
provide watershed-based planning assistance.
It is through conservation operations that our people are
able to join with the conservation districts throughout the
country to work on the national resource concerns and
challenges that people at the local level care about and need
to see addressed.
In today's budgetary world, which demands performance-based
programming, it will be through conservation operations that we
anticipate seeing the greatest benefit from NRCS' locally led
conservation initiative, which is intended to energize and
focus our efforts with our local partners and allow us to
report to you and the country on exactly how our partnership is
doing over time.
It is also through conservation operations that we will do
the critical work of implementing the conservation compliance
and swampbuster provisions of the Food Security Act.
NRCS' locally led initiative also will do something else.
It will help guide and shape to the fullest extent possible
every USDA conservation program activity at the State and local
level.
This is our intent with the Small Watersheds Program, the
new Environmental Quality Incentives Program, the Conservation
Reserve Program's continuous signup for buffer and filter
strips; the Wetlands Reserve Program, FIP, as well as the new
Wildlife Habitat Incentives Program and the Farmland Protection
Program.
All of these programs are either up and running or close to
it. We are moving aggressively to prepare rules for EQIP, WHIP,
and the other programs that have been authorized by the 1996
farm bill.
We are excited about the opportunity to work in partnership
with the conservation districts and other local conservation
leaders to put these programs to use.
Mr. Chairman, I think the 1996 farm bill was not only a
historic farm bill, but probably the first ever conservation
farm bill of its kind. Conservation clearly led the charge, and
was the driving force to enactment of that legislation. Of
course, you and Senator Bumpers played a critical role in that.
We see the conservation title as affording us a much
broader toolkit than we have ever had before, to do the kind of
work that we need to do across the landscape, to help farmers
and ranchers and others in the community meet their needs and
protect the resources they care dearly about.
Conservation operations is the key to ensuring that we have
the people on the ground, the resources available to put that
toolkit to use and to work closely with landowners and others
to meet their overall conservation goals.
Another prime example of a program that makes effective
local action possible is the Resource Conservation and
Development Program, or the RC&D Program.
Federal contribution to the RC&D Program is small, simply
the salaries of local coordinators. But this investment gets
this country much in return in the form of local initiative and
a commitment of funds to develop and enhance economic
activities.
This budget asks for an increase for RC&D of $18 million,
designed to help this program make a much greater contribution
in watersheds needing assistance for work such as salmon head
habitat recovery work in the Pacific Northwest. We stand ready
to work with you on this proposal and to shape it to meet our
overall needs and objectives.
One of the things that is so amazing and exciting about all
of this is the fact that USDA and NRCS can even conceive of
helping to make locally led conservation happen at the State
and local level.
Agriculture has created a State and local delivery system
that is the envy of all the other Federal agencies and a model
for the world. When it comes time to get real work done on the
ground on private lands, whether it is in times of emergency
and crisis such as the floods we are seeing now, or in the
times of normal need, it is this delivery system that people
turn to.
This is truly a national asset of tremendous value, Mr.
Chairman. And I believe we all owe a debt of great gratitude to
those that came before us in Congress and in agriculture that
have made it possible.
Mr. Chairman, as I said before, in all of this we have
sought to create a budget that can really help agriculture on
this country's private lands, realize the promise of a
geography of hope.
I am sure that this is a goal that you and the members of
the committee can support. We certainly look forward to working
with you over these next several weeks and months as you
finalize the budget and seek to make reaching this objective
possible.
Thank you, Mr. Chairman, again for the opportunity to
appear before you today, and we will certainly do our best to
answer any questions you may have.
Prepared Statement
Senator Cochran. Thank you, Mr. Secretary. We have your
complete statement, and it will be made part of the record.
[The statement follows:]
Prepared Statement of James R. Lyons
Mr. Chairman, Members of the Committee. It is my pleasure to
outline for you the fiscal year 1998 budget request for the Department
of Agriculture's Natural Resources Conservation Service (NRCS).
In the past month, Secretary of Agriculture Dan Glickman conveyed
to each of you and all other members of Congress a copy of a new
publication from NRCS. This publication, ``America's Private Land, A
Geography of Hope,'' articulates a new view of private land in America,
most of which is in an agricultural use, and what we might refer to as
our ``working land.'' As the introduction of the publication suggests,
people's relationship to the land has changed. Few Americans now live
and work on farms and ranches. Most of us live in cities and suburbs.
But what happens on our private land remains crucial to our economic
and environmental well-being. We are reminded of our connection to the
land every time we buy a loaf of bread, turn on the tap for a drink of
water, or admire a flock of ducks or geese heading south in the fall.
Seventy-percent of the land in the United States, exclusive of
Alaska, is held in private ownership. About half of this land--907
million acres--is cropland, pasture, and rangeland. The stewardship of
these particular acres lies in the hands of fewer than 5 million
individuals, which means the care of 50 percent of our land is in the
hands of less than 2 percent of our citizens.
We rely on these fellow citizens and neighbors to produce the food
and fiber we need, which they do exceedingly well. Our food prices
remain the lowest in the industrialized world, and our agricultural
industry contributes significantly to export revenues. But these
farmers and ranchers, through their care of private land, produce much
more than food and fiber. The products of their land also include safe
drinking water, healthy soil, clean-flowing streams, valuable wildlife
habitat, and scenic landscapes. We don't buy these commodities in the
supermarket, and their prices are not listed on the Chicago Board of
Trade, but most Americans value them just the same.
Realizing the importance of protecting private land and private
landowners, our nation's policy-makers have made significant
commitments over the years to conservation. Those commitments began in
the 1930's in response to the devastating Dust Bowl. Today, in spite of
important conservation gains over the past decade in particular, soil
erosion remains a threat on 1 in 3 acres of cropland, water quality and
supply problems confront many communities, and we have grown
increasingly concerned about the loss of wildlife habitat and the
conservation of biodiversity.
Fortunately, we have a number of new, voluntary, incentive-driven
tools in the 1996 farm bill that should allow us to extend the
important conservation gains of the past decade. To do so, however,
will require a continued, if not renewed, commitment to private land
and private landowners. We cannot afford to tell landowners that
stewardship is their concern alone. Stewardship involves a shared
responsibility between public and private interests alike.
The following budget request, therefore, strives for a balance in
spending that will provide farmers and ranchers with sufficient
financial incentives for conservation work, including targeted land
retirement, while ensuring that sufficient resources are made available
to USDA and NRCS for conservation operations generally and technical
assistance in particular. A budget of this magnitude will allow us to
continue to work cooperatively with state conservation agencies, local
conservation districts, and our agency's many other public and private-
sector partners in assuring an adequate measure of conservation on our
Nation's working land.
The following table shows the major items in this year's budget
request and contrasts them with the comparable figures from the two
prior fiscal years.
[In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
Fiscal year--
Appropriation -----------------------------------------------
1996 1997 1998
----------------------------------------------------------------------------------------------------------------
Conservation operations......................................... 629,794 619,961 722,268
Wetlands Reserve Program........................................ 77,000 .............. ..............
Watershed and flood prevention operations....................... 180,514 164,036 40,000
Resource conservation and development........................... 29,000 29,377 47,700
Watershed survey and planning................................... 14,000 12,381 ..............
Colorado River Basin Salinity Control Program................... 2,681 .............. ..............
Forestry Incentives Program..................................... 6,625 6,325 6,325
Outreach for socially disadvantaged farmers..................... N/A \1\ 5,500 5,000
----------------------------------------------------------------------------------------------------------------
\1\ Includes $4.5 million allotment from the Fund for Rural America.
Now, let me describe how NRCS differs from other federal agencies
and summarize for you the agency's role. I will also outline the major
programs NRCS administers and describes not only some of the things we
have achieved with the help of our partners at state and local levels,
but also some of what have planned.
strategic assets of the natural resources conservation service
NRCS provides natural resources conservation assistance primarily
on private lands. More than 70 percent of the land in the contiguous
United States is privately owned, including virtually all of the
Nation's agricultural lands. It is on the private lands where millions
of individual decisions are made by farmers and ranchers, that the
ultimate success of the majority of our natural resource efforts will
succeed or fail in helping meet the twin goals of productive
agriculture and an economically and environmentally sustainable future.
NRCS is the only Federal agency whose major purpose is to provide
consistent technical assistance to private landusers across the
country. The agency's focus is on helping landowners and users achieve
natural resource and environmental goals while maintaining productive
and profitable operations and economically viable rural communities.
NRCS has had some significant successes in the past, and the structure
is designed to continue that success in the future. Let me describe
some of the agency's assets in light of the implementation of the USDA
Reorganization Act of 1994, including the Department's Field Office
Streamlining efforts.
--Delivery system. NRCS has a nationwide network of professionally
staffed local offices that provide conservation technical
assistance to owners and users of privately-owned land. This
nationwide delivery system is based on a partnership that
combines a federal natural resource presence at the local level
with locally sponsored and controlled conservation districts
and their employees. This conservation infrastructure is
interwoven and interconnected at the local, State, and Federal
levels with complex relationships and program support systems
that are interdependent. Local service will be continued, but
with the reorganization and consolidation of field offices,
this operation will be more efficient and enable our field
staff to provide the kind of site-specific technical assistance
individual private landowners need and want.
--Technical skills. NRCS' natural resource specialists are trained to
deliver technological support to groups and individuals
quickly, efficiently, and consistently nationwide. By
regionalizing NRCS, our technical staff will be able to apply
their knowledge of soil science, engineering, landscape
architecture, agronomy, biology, range management, economics,
geology, and other fields with a much greater degree of
sensitivity to local conditions. NRCS field offices and staff
working in partnership with the local conservation districts
are used as a primary source of help by local people--and often
by people administering programs for other Federal, State, and
local agencies. About 9,000 staff are located at these offices.
--Technical excellence. Throughout government and private industry,
NRCS specifications for soil and water conservation practices
are the national standard. In addition, the agency is the
leader in soil classification and soil mapping. Recently, in
recognition of the vital importance of soil quality, NRCS has
made a commitment to better understand and emphasize the
fundamental role of soil quality.
--Natural resource planning experience. NRCS has vast experience in
broad-scale planning in watersheds and other areas and site-
specific planning on farms and ranches to address natural
resource concerns. Effective natural resource planning in the
future will require this type of planning process to develop
effective solutions that meet the needs for a sustainable land
and its people. NRCS is now serving as a catalyst by providing
coordination to bring local people together with skilled
technical people to develop and implement meaningful solutions.
These planning efforts are provided through the Watershed
Survey and Planning Program, the Resource Conservation and
Development (RC&D) Program, and Coordinated Resource planning
provided through Conservation Operations.
--Partnerships and volunteerism. Since its creation, NRCS has
operated through voluntary cooperative arrangements with
individuals, the private sector, and Federal, State, and local
governments. The value of NRCS technical assistance is
recognized by local and State partners; equally, we recognize
the invaluable contribution of volunteers, who contribute
immeasurably to conservation efforts. Americans from all walks
of life have freely and generously given of their time to the
volunteer arm of NRCS, known as the Earth Team. In fact, in
fiscal year 1996, some 14,748 NRCS Earth Team volunteers
donated 530,854 hours to conservation efforts. As calculated by
the Points of Light Foundation, this equates to an additional
$6,400,000 in direct assistance to private landowners and
national resource protection.
--Local people as decision-makers. When NRCS delivers conservation
and program assistance, the agency works under cooperative
agreements with some 3,000 conservation districts that are
established under state law. About 17,000 local conservation
district supervisors provide the agency with invaluable
guidance. The NRCS cooperative team structure is an established
and practical example of how Federal programs can be managed
with local guidance at the local level. It is crucial to
remember that the agency's approach is a voluntary one. Our
professionals provide options for problem-solving--developed in
conjunction with customers, but it is the customers who make
the final decisions.
--Leverage. State and local governments contribute substantially,
with both people and dollars complementing NRCS technical
assistance. In fiscal year 1997, State and local governments
spent over $500 million on conservation--a considerable
increase from the $247 million spent a decade ago. Without NRCS
technical assistance, which greatly enhances the value of State
and local efforts, these funds almost certainly would not have
been spent on natural resource protection. In a sense, this
cooperation constitutes a two-way leveraging: State and local
programs and NRCS benefit from each other's involvement.
usda reorganization
A major goal of this Administration has been to ``reinvent
government'' so it works better and costs less, cutting waste and
reducing bureaucracy. The National Performance Review (NPR) process,
challenging all areas of the Federal Government to do a comprehensive
bottom-up review of operations, resulted in innovative and creative
ideas on how we ourselves could make necessary and appropriate
improvements in the way our agencies do business. Taking these good
ideas and incorporating additional improvements, Congress authorized
USDA reorganization in the ``Federal Crop Insurance Reform and
Department of Agriculture Reorganization Act of 1994''. With this
action, NRCS was given the green light to develop an implementation
plan for these exciting new ideas.
In December of 1994, after extensive public input, NRCS unveiled
its far reaching reinvention plan which is targeted for full
implementation by 1999. In addition to the field office closings and
consolidations previously announced by former Secretary Espy, the plan
called for major restructuring above the field office level. The
proportion of NRCS staff at the field office level will increase from
the current 70 percent to 80 percent; operational functions are being
delegated to the lowest level possible; headquarters operations are
being reduced by over 50 percent; science and technology will be
focused on areas important to our mission through the establishment of
more than six NRCS Institutes which will improve our capabilities in
areas such as grazing lands, natural resource inventory, wetland
science, social science, watershed science, and soil quality; the
ability of NRCS to address multi-state natural resource and program
delivery issues is being improved through the establishment of regional
offices; technical support functions are remaining strong and becoming
better focused by being moved closer to where programs are carried out;
and administrative and other support activities are being thoroughly
reviewed for continued improvement in efficiency and better focused to
support a modernized agency.
By October 1, 1995, all areas of the NRCS reorganization plan were
in full implementation. This included all agency personnel knowing
their new role, Regional Conservationists in place and operational,
technical functions reassigned closer to the field, and the transfer of
programs such as the Wetlands Reserve Program and Forestry Incentives
Program completed, as provided in the 1994 Act. Further, NRCS field
office streamlining efforts were fully under way with the Department,
as we begin the multi-year process of moving from the historical field
offices to field service centers.
This has not been an easy process, especially from the standpoint
of the agency's most important resource--our employees. I am pleased we
have been able to use the tools necessary, including authorities from
Congress, to meet our goals without overly impacting our employees and
their careers. I am indeed proud of how NRCS employees have embraced
this change and have committed to seeing this reorganization
completed--successfully. However, any change this massive cannot be
without its bumps and mistakes.
We have learned a lot from the reorganization process as well, and
have made further needed adjustments as identified. On January 30,
1997, further adjustments of the NRCS National Headquarters structure
were approved by the Department. The changes are the result of
recommendations and appraisals made one year after the agency-wide
reorganization and from recommendations of our strategic planning and
reports. Our new headquarters structure includes an increased emphasis
on strategic planning and soil and natural resource assessment.
Reflected in this, are a new Deputy Chief for Soil Survey and Resource
Assessment and several realigned Divisions. We are encouraged by the
results of the agency-wide reorganization and are equally optimistic
that our present adjustments will render the agency better equipped
than ever to tackle the mission ahead.
Now I will describe our programs and plans for fiscal year 1998.
program effects and the fiscal year 1998 budget request
Many programs provided by NRCS are a catalyst for local investment
and as a result, enhance local economic activities. Other programs
provide services that are voluntary in nature, and not available or
provided by other government or private entities. These programs and
activities are an essential component of the conservation fabric of the
Nation. I will briefly highlight several for you.
Conservation operations is the foundation for most of the agency's
activities. These activities are carried out through the conservation
infrastructure, a complex array of local, State, and Federal agencies
and organizations and local people working together for natural
resource protection. The relationships are complex and NRCS is an
integral part of these local, State, and Federal interdependent program
support systems. Many grassroots programs and initiatives are funded by
conservation operations. Several are described below.
Conservation Technical Assistance is the cornerstone for most
agency activities. The fiscal year 1996 appropriations were
$538,904,000; and the fiscal year 1997 comparable appropriations are
$528,892,000, and the fiscal year 1998 budget request is $549,241,000.
As stated previously, this difference over fiscal year 1997 is due in
large part to uncontrollable costs from inflation and pay costs, and
costs to relocate NRCS operations to the USDA Service Centers, and the
increased program responsibilities associated with implementation of
the conservation programs of the Federal Agricultural Reform and
Improvement Act of 1996 (1996 Act). During 1998, the Natural Resources
Conservation Service will continue to provide technical assistance on
prior year projects as needed for the Colorado River Basin salinity
Control Program and ongoing activities of the Great Plains Conservation
Program.
Conservation technical assistance provides assistance to private
land users, communities, units of State and local government, and other
Federal agencies for planning and implementing solutions to natural
resource problems. This technical assistance is the cornerstone for
locally-led conservation efforts that are conducted in partnership with
state, local, and tribal governments, including conservation districts;
private groups of farmers and ranchers; and environmental groups. In
the past decade, major strides have been made in reducing erosion;
improving soil and water quantity and quality, air quality, pasture and
range conditions; improving and conserving wetlands and woodlands;
enhancing fish and wildlife habitat; and reducing upstream flooding.
This assistance is based on voluntary local landowner cooperation and
recognizes the value of educational, technical, and financial
assistance. These principles apply as we are responding to individual
needs, local goals, and to nationally determined priorities. Still,
more remains to be done. Also, because neither agriculture nor the
environment is static, and both are constantly changing, the agencies
and programs need also to be constantly evolving.
During fiscal year 1996, NRCS assisted approximately 814,000
private landowners in preparing conservation plans and implementing
conservation systems , as well as providing assistance to units of
government in developing area wide conservation plans and goals. This
resulted in conservation treatment on over 100 million acres of land,
including cropland, rangeland, pastureland, woodland, and other land.
Urban Conservation is an additional area for which we are
particularly proud. It is an area for which I have taken particular
interest and believe that we are making significant gains. While, much
of my remarks have focused upon rural land to this point, it is the
mission of NRCS to provide assistance to all of our nation's private
land including urban, and suburban communities. Four years ago, the
Department of Agriculture initiated an Urban Resources Partnership
(URP). This is an effort which NRCS is co-leading to provide
conservation assistance to the communities that need it most--urban and
urbanizing areas. We are proud to report that over 4,000 non-profit and
community-based organizations receive financial support and technical
educational assistance from URP. Communities are responding with
enthusiasm and have matched federal financial assistance with over
fifty percent matches. We have eight major metropolitan cities under
the program including New York City, Chicago, and Los Angeles. In these
pilot cities, NRCS field staff provide assistance in a diverse range of
projects from community gardening and forestry, to education of youth
about soil science and the urban watersheds in their community.
But our work in this area only begins here. NRCS employees support
numerous urban pilot cities and provide agency expertise on urban
resource concerns. As many of you know, the nation's most productive
farmland is located in our near urbanizing areas. NRCS staff address
issues of ``farming on the fringe'' and help mitigate some of the
difficult concerns that arise when agrarian and community interests are
at odds. Through the Land Evaluation and Site Assessment system, NRCS
staff provide advice to local government officials on land-use and
zoning decisions. In addition, we provide planning support to
landowners to remediate air and water quality concerns of their
neighboring community. These services are all provided as part of the
conservation technical assistance available to everyone.
Highly Erodible Land Conservation (HELC). Since 1985, the Agency
has devoted a significant portion of its technical assistance resources
to helping farmers and ranchers meet the highly erodible land
conservation provisions. With NRCS technical assistance, more than 1.7
million plans have been prepared covering about 142 million acres of
highly erodible land, and 95 percent of those plans were implemented by
the mandated deadline of December 31, 1994. Between 1985 and 1995,
technical assistance was provided to an average of over a million
decision-making land owners and users each year; one result is that
soil erosion has been reduced by over a billion tons annually. By the
end of fiscal year 1995, all the highly erodible plans were installed.
The 1996 Act provided amendments that have reduced the burden of
complying with the HELC provisions and have provided USDA with
additional tools to use in working with producers. However, all
producers who receive USDA program benefits must be fully applying a
conservation plan on highly erodible land. Therefore NRCS assists
producers in developing plans for land that they acquire and in making
changes in their current plans so that their plan may reflect changes
in cropping systems, weather conditions, and economic incentives. Our
experience has shown that approximately 20 percent of producers will
change their conservation systems each year. This figure may be
slightly higher in the next few years as producers begin to respond to
market signals as a result of the Agricultural Market Transition Act
Program (AMTA). The 1997 enrollment in AMTA generated requests to NRCS
for 137,234 highly erodible land determination on fields, 79,225 new
conservation plans, and revisions on 146,239 conservation plans.
Preliminary 1996 Status Review data show that approximately 48
percent of farmers have conservation systems that are at sustainable
levels of soil loss or levels that allow soil to be created at a faster
rate than it is lost. With the amendments provided by the 1996 Act,
NRCS will be ensuring that new conservation systems provided to farmers
and ranchers result in a substantial reduction in soil erosion.
Wetland determinations and certifications. On January 6, 1994, four
Federal agencies with wetland protection responsibilities signed an
historic Memorandum of Agreement recognizing NRCS as the lead Federal
agency for wetland determinations on agricultural lands. Farmers now
turn to NRCS for determinations that identify the extent of wetlands
under both the swampbuster provisions of the Food Security Act of 1985
and Section 404 of the Clean Water Act. This new responsibility brought
increased commitment of staff resources to provide prompt, accurate,
and effective service to our Nation's agricultural land owners and
users.
Both the 1990 and 1996 Farm Bills called for the Secretary to
``certify whether a map is sufficient for the purpose of making a
determination of ineligibility for program benefits.'' This was
interpreted to mean the review and certification of previously made
wetland determinations. In 1991, the certification process was put on
hold because of dialogue surrounding which version of the Corps of
Engineers delineation manual was appropriate. Because of this debate,
Congress commissioned the National Academy of Sciences to do a study
and determine the appropriate definition of a wetland. In 1994, the
National Academy of Sciences completed it's work and affirmed the 1987
version best identified wetlands.
However, in April of 1995, the Secretary decided it was necessary
to suspend all wetland determinations unless specifically requested by
the client, or when a potential violation occurs. This decision
resulted from the prospect of legislative changes in the Food Security
Act of 1985 (1985 Act). The legislative changes to the 1985 Act
generally reduced the cumbersome elements of compliance, while
protecting wetland functions and values. The Food Security Act also
provided that certified wetland delineation's will remain in effect
until such time as the landscape is changed by natural events. All
current determinations are frozen and the process of providing
wholesale wetland resource information to customers is on hold, unless
a determination is specifically requested. Landowners have continued to
request a number of certified wetland determinations and these requests
are expected to increase as these issues continue to play themselves
out in Congress. The enrollment in Agriculture Market Transition Act
(AMTA) generated requests to NRCS for approximately 25,417 wetland
determinations.
The 1996 Act also required the Secretary to permit persons to
secure technical assistance from approved sources, in addition to those
services available through the NRCS. Other sources were not previously
restricted; however, language in the 1996 Act now implies that a
certification for measurement of crop residues and an approval process
for conservation planning and implementation process are required.
State Conservationists, in consultation with the State Technical
Committee, are establishing methodologies for third parties to use to
measure crop residue. NRCS and others will hold training sessions for
interested persons in accordance with guidance. Upon completion of
training, and after all requirements are met, third parties will be
deemed ``certified.'' Producers may participate in training, but
training is not required
Certification or approval status only reflects that person(s) or
groups have presented written assurances that they possess technical
qualifications. Neither NRCS nor USDA will warrant or guarantee the
quality of work done by third party providers of technical assistance.
NRCS is, also, working with certification registries and associations
to ensure that certification programs for approval of commercial
sources of services reflect skill levels necessary to meet technical
assistance needed.
Grazing Land Conservation Initiative (GLCI). This grassroots-driven
initiative has helped NRCS better define the resource needs and
benefits generated when grazing lands are improved. NRCS has been
requested by this group to continue technical assistance to livestock
producers on private grazing lands. Grazing lands include rangelands,
pasture, hayland, and grazed forestlands. The latest 1992 National
Resources Inventory (NRI), shows that grazing lands--mostly rangeland
and pasture--represent 642 million acres, or almost half of the non-
Federal lands in the United States.
The NRI analysis of range vegetation shows that over 15 percent of
non-Federal rangelands are in poor condition; over 44 percent are in
fair condition; 34 percent in good condition; and only 6 percent in
excellent condition. The NRI indicates that 75 percent--nearly 299
million acres--of non-Federal rangelands need conservation treatment.
Properly managed grazing land represents a renewable resource for
producing food and fiber. Vegetative cover on well-managed grazing
lands contributes to: 1) increased water quality and quantity; 2)
improved wildlife habitat; 3) reduced soil erosion and sedimentation;
and 4) improved riparian areas. Conservation Operations will continue
to support technical assistance for these unmet conservation needs and
will provide additional assistance within current funding levels as the
field level workload permits. In fiscal year 1997, NRCS was able to
provide enough resources to this initiative to ensure each of the 50
states has access to a Grazing Land Conservation Coordinator. This will
enable us to provide multi-resource technical assistance to support
grazing lands conservation and water quality improvement on rangelands
and begin the process of rebuilding the agency's expertise in rangeland
conservation, a capability demanded by our customers.
Service Center Implementation, a customer-oriented initiative
within USDA, will continue in 1997 within currently budgeted funding
levels. It will improve delivery of services in USDA field-delivery
programs through improved business process reengineering (BPR) and
information systems integration. Service Center Implementation will
coordinate planning, acquisition, development, implementation, and
management of information technology resources. Service Center
Implementation will benefit the agency and customer partnerships by: 1)
providing one-stop shopping to multi-agency programs; 2) significantly
reducing paperwork required of customers and employees; 3) facilitating
data sharing; and 4) reducing repetitive requests for information.
One of the areas where BPR has resulted in significant positive
change in a core NRCS business process is in the design, construction,
and implementation of the agency's Field Office Computing System
(FOCS). This system, developed by reengineering the natural resource
conservation planning model, steps away from the single resource plan
used for Food Security Act compliance with its intensive record keeping
requirements, and enables a much more holistic, natural resources
oriented planning process for protecting and enhancing soil, water,
air, plants, and animal resources while preserving agricultural
profitability for farmers and ranchers. Literally hundreds of
employees, customers, and partners were involved in this five year
effort that is now coming to fruition. FOCS and the core conservation
planning process it automates will be merged into the concept of the
USDA Field Service Center within the Service Center Implementation
interagency business and information strategic plan.
New technology. Most of the natural resource information used by
NRCS is referenced to a geographic location on the ground, and there is
a need to put this data in digital form for more accessible use in a
geographic information system (GIS) available at state and field
offices. This budget proposed an increase of $10 million to accelerate
the purchase of digital orthophotography and data digitization. This
will improve customer service by providing more usable and accurate
information for use in natural resource planning and decision-making,
and for environmental assessments and evaluations. It will also reduce
duplicative work done with the same customers in the USDA Service
Center. Currently, about 200 NRCS field offices are using GIS. We are
embarking on an important review of the information NRCS collects to
assure that it meets the real resource information needs of farmers and
ranchers. As part of this effort, we also are working on improving
interagency cooperation, and the ways in which we share and display
natural resource, economic, and other data so they conform to the
national GIS database standards. Increasing the availability of such
data is necessary for USDA reorganization and reinvention at the field
level.
Under the 1977 Resources Conservation Act (RCA), USDA, through
NRCS, with the assistance of nine other Federal agencies, conducts and
analyzes ongoing comprehensive inventories and assessments of the
status, condition, and trends of America's natural resources on all
non-Federal lands. This information is used by USDA, other Federal
agencies, State and local governments, and other organizations to
support agriculture and conservation policy development and program
evaluation. NRCS is working to assure the RCA Appraisal addresses the
distinct characteristics of the regions of the country. The agency also
will be developing, in the next 18 to 24 months, the third National
Conservation Program, also called for under the RCA.
USDA Centers of Excellence initiative. USDA will continue to work
in partnership with the 1890 Land Grant Institutions and Tuskegee
University, to develop low cost conservation systems to improve water
quality and reduce erosion. USDA is establishing Centers of Excellence
at the 1890 schools. NRCS and the 1890 Institutions have a history of
cooperative ventures that have provided knowledge and skills necessary
to strengthen and broaden the application of technologies to the
limited resource and socially disadvantaged farmers they serve. It is
economical and efficient to support the Centers of Excellence with the
universities than developing that capacity within USDA. The focus of
the proposal is to develop and evaluate sustainable ecosystems that
would improve and protect water quality and quantity. NRCS will
continue the current level of support for this initiative.
Assistance to American Indians, Native Alaskans and Pacific
Islanders. Many of the more than 310 reservations covering more than 50
million acres in the 48 contiguous states, four areas of trust land, 12
Alaska Native Regional Corporations and 217 Alaska Native Villages have
been requesting technical assistance. We estimate receiving 150
requests to establish tribal land field offices each year. Staff in
those offices provide basic technical assistance for resource problem
identification and conservation planning and application. NRCS plans to
provide technical assistance and capacity-building assistance needed on
a full-time basis on Indian lands that have significant natural
resource problems, within the current funding level as workload in the
field permits. This assistance will begin the process of developing
local capacity in natural resources management by establishing an
internship/self reliance program similar to the one in operation at the
Wind River Reservation in Wyoming. Tribal employees will be trained
through on-the-job and educational experiences as a conservation work
force on Indian lands. No additional funds are requested for this
activity for fiscal year 1998, but additional assistance will be
provided to this high priority activity to the extent possible within
requested funding levels.
Snow survey and water supply forecasts provide western states and
Alaska with vital information on summer water supplies. The fiscal year
1996 appropriations were $5,852,000; the fiscal year 1997
appropriations are $5,835,000; and the fiscal year 1998 budget request
is $5,888,000. NRCS field staffs provide necessary leadership,
standardization of procedures, and automation to a partnership of
Federal, State, and local personnel to collect snow-pack data from more
than 1,200 remote high mountain sites. Data are collected with many
partners, including Conservation Districts, Bureau of Indian Affairs,
Bureau of Land Management, Forest Service, the National Weather
Service, Army Corps of Engineers, Bonneville Power Administration, and
many State and local entities both public and private. After compiling
and analyzing the data, NRCS is able to provide snowpack estimates and
water yield on a monthly basis throughout the snow melting period. The
knowledge gained through this effort supports critical decisions on
billions of dollars of agricultural production, municipal water supply,
hydroelectric and industrial water supply, flood control, and water
flow requirements for fish and wildlife. This modest program
contributes substantially to the economic and environmental well-being
of a very large part of the country.
Soil Surveys provide the public with local information on the uses
and capabilities of their soil resources. The fiscal year 1996
appropriations were $76,163,000; the fiscal year 1997 appropriations
are $76,409,000; and the fiscal year 1998 budget request is
$82,248,000. Soil surveys are based on scientific analysis and
classification of soils and are used to determine land capabilities and
conservation treatment needs. The published soil survey for a county or
designated area includes maps and interpretations with explanatory
information that is the foundation of resource policy, planning and
decision-making for Federal, State, county, and local community
programs. Homeowners and landowners also use soil survey information
when making decisions. Soil surveys are conducted cooperatively with
other Federal agencies, land grant universities, State agencies, and
local units of government, many of whom contribute funds and staff.
Soils information has been gathered over many years and is
primarily contained in published soil survey manuscripts and maps.
There is a need for digital soils data for use in geographic
information systems (GIS). NRCS has the leadership role for
coordinating the development, maintenance, and distribution of a
modernized digital soils data base. Geographically referenced digitized
soil survey data, along with orthophotography will provide the accurate
reference base needed for computer-assisted conservation, natural
resource planning, and for geographic referenced data sharing. In
addition, digitizing the soil surveys provides efficiency when updating
and maintaining the soil survey data. This budget contains $5 million
to support the updating of older soils information to current standards
for digitization of soil surveys and the formation of a national
database.
Plant Material Centers assemble and test plant propagation and the
usefulness of plant species for biomass production, carbon
sequestration, erosion reduction, wetland restoration, water quality
improvement, stream bank and riparian area protection, coastal dune
stabilization, and to meet other special conservation treatment needs.
The fiscal year 1996 appropriations were $8,875,000; the fiscal year
1997 appropriations are $8,825,000; and the fiscal year 1998 budget
request is $8,891,000. Plant materials represent inexpensive, long-term
conservation solutions to many environmental and natural resource
problems and their maintenance costs are usually low. Many landowners
and managers willingly use plant materials, if available, to meet their
conservation needs.
The work at the 26 centers is carried out cooperatively with State
and other Federal agencies, commercial businesses, and seed and nursery
associations. Plant Materials Centers play an important research and
development roles since most commercial nurseries will not develop new
plant materials due to limited markets, but will grow and market the
stock once a dependable plant has been developed. After species are
proven, they are released to the private sector for commercial
production.
Watershed and Flood Prevention Operations is the first and only
national program that helps local organizations plan and install
watershed-based projects on private lands. It provides site-specific
technical expertise and locally based watershed planning and financial
assistance for plan implementation. The Watershed Program provides a
process to solve local natural resource problems and avoid excessive
regulation. The fiscal year 1996 appropriations for Public Law 534 and
Public Law 566 were $180,514,000; the fiscal year 1997 appropriations
are $164,036,000; and the fiscal year 1998 budget request is
$40,000,000 plus $60,000,000 in Conservation Operation for technical
assistance. Therefore, the total funding this budget requests is
$100,000,000. The authorized purposes of watershed projects include
watershed protection, flood prevention, water quality improvements,
soil erosion reduction, rural, municipal and industrial water supply,
irrigation water management, sedimentation control, fish and wildlife
habitat enhancement, wetland creation and restoration, and public
recreation. The program empowers local people as decision-makers,
builds partnerships and requires local and State funding contributions
and ownership.
The program has been subject to what we view as legitimate
criticisms in recent years. However, we do not agree with those who
would attempt to end the program. While I agree fundamentally with
those who have criticized the historical use of large dams, reservoirs,
and channelization to achieve flood management as destructive to many
natural processes and functions in treated watersheds, I do not believe
the program as currently administered should be scrapped. Judicious use
of physical works to protect and manage watersheds can be
constructive--both to natural systems and for protecting farm land from
serious harm. For instance, the 1994 Galloway report on floodplain
management shows that during the 1993 Midwest Flood, the Small
Watershed Program was credited with avoiding $400 million of damages to
population centers, agriculture, and industry. USDA farm program
disaster payments were significantly less in watersheds that had been
treated with conservation measures through this program. This was also
the case with Tropical Storm Alberto in parts of Florida, Alabama, and
Georgia. Any project approved by the program for flood prevention will
yield very high benefit/cost results.
The agency administers this program by authorizing local sponsoring
organizations to begin the development of a plan. In fiscal year 1994
through fiscal year 1996, of the planning starts authorized, most were
requested primarily to improve water quality from agricultural sources
and to benefit fish and wildlife habitat. The remainder identified
water quality as secondary purposes. Proposed project actions include
agricultural waste management, nutrient and pesticide management, and
other land treatment measures. An example is in Alaska where the first
watershed project authorized under this program is improving water
quality to protect critical salmon spawning habitat. This project is
important because it protects salmon as a subsistence food source for
Alaskan Natives and for the fishing industry on the coast.
Early in fiscal year 1995, the agency completed a Phase I review of
authorized projects. With the agreement of everyone involved, including
project sponsors, more than 500 dams and 1,800 miles of stream channel
modifications were deleted and many other projects had previously
planned measures replaced with more up to date and environmentally
sound measures for watershed restoration. We are currently completing
Phase II of this review during which the remaining projects are being
given a more rigorous review, using the team approach, at the local
level. This second phase review has, to date, deleted an additional 135
dams and 930 miles of stream channel. This brings the total to 635 dams
and 2,730 miles of stream channel modification removed from current
watershed plans, while maintaining the overall goals of those plans. It
is important to note as well, that the process has identified and
appropriately closed out 76 projects with additional projects being
review for closing with the local sponsors.
The agency has undertaken a comprehensive effort to reevaluate the
program and is in the process of refocusing it to approach watersheds
in a more comprehensive, ecosystem-based fashion, involving all local
people with a stake in the outcome, in the broad range of land use and
conservation issues. Priority will be given to watersheds where local
people have identified the need for natural resource restoration, water
quality improvement, restoration of fish and wildlife habitat, flood
damage reduction emphasizing non-structural measures, and where local
sponsor support is strong. Watersheds located in agricultural and rural
community settings with low-income and socially disadvantaged farmers,
as well as those serving Native Americans also will receive priority.
NRCS will ensure that assistance to local leaders through the Small
Watershed Program is supported by appropriate Federal partnerships, is
compatible with national natural resource issues and complements State
and local priorities. The 1998 budget proposal would provide no
additional funds for flood prevention work under the authority of
Public Law 534, but would continue work on the remaining high priority
projects that would qualify for assistance under the authority of the
Small Watershed Program (Public Law 566). Additionally, technical
assistance for these program activities would be combined (along with
Watershed Surveys and Planning) into a single new line item for water
resources assistance requested under the Conservation Operation
appropriation.
The Emergency Watershed Protection (EWP) program provides
assistance to reduce hazards to life and property in watersheds damaged
by severe natural events. An emergency is considered to exist when
floods, fires, droughts, or other natural disasters result in life and
property being endangered by flooding, erosion, or sediment discharge.
In the latter part of 1995, October through December, $98,800,000 was
used for emergency work, with the last $35,500,000 originating in
previously appropriated supplemental funds. EWP was utilized during the
Midwest Floods in 1993, western wildfires, and Tropical Storm Alberto
in 1994, and floods in California and the Southeast in 1995. In fiscal
year 1996, an $80,514,000 supplemental appropriations was appropriated
to repair damages to waterways and watersheds resulting from flooding
in the Pacific Northwest, the Northeast blizzards and floods and other
natural disasters. An additional $63,000,000 was provided for fiscal
year 1997 to repair damages from Hurricanes Hortense and Fran.
During the past eight years, the program has been needed and used
in an average of 26 states per year. Technical and financial assistance
under the EWP program is available for small-scale, localized disasters
not necessarily declared as national in scope. Among the emergency
activities, generally performed with temporarily employed local labor,
are disaster cleanup and subsequent rebuilding; restoring stream
corridors, wetland and riparian areas; establishing quick vegetative
cover on denuded land, steep land, and eroding banks; opening
dangerously restricted channels; repairing diversions and levees, and
assisting the Federal Emergency Management Agency when it plans and
relocates communities away from floodplains.
Resource Conservation and Development (RC&D) is a program initiated
and directed at the local level by volunteers. The fiscal year 1996
appropriations were $29,000,000; the fiscal year 1997 appropriations
are $29,377,000; and the fiscal year 1998 budget request is
$47,700,000. The increase over the fiscal year 1997 appropriations will
fund pay costs and local, non-Federal watershed and rangeland
coordinators to assist in watershed planning and rangeland
conservation.
Each RC&D area encompasses multiple communities, various units of
government, municipalities, and grassroots organizations. The RC&D's
represent an unusual approach for helping citizens address multi-
jurisdictional natural resource and community development issues. NRCS
provides coordination to the program which serves as a catalyst for
these civic oriented groups to share knowledge and resources, and it
leverages public and private funds to solve common problems--including
economic development--in a given area. Assistance is obtained from the
private sector, corporations, foundations, and all levels of
government. Historically, every dollar of NRCS technical and financial
assistance from this program and applied directly to local projects,
has been matched by about $13 from other sources. In fiscal year 1996,
RC&D areas completed 2,342 projects and Council members and other
volunteers donated 716,184 hours of time to these completed projects.
There are currently 290 authorized RC&D areas involving 2,143 counties
across the country. In addition, an increase of $18 million is
requested to fund local, non-Federal watershed coordinators to assist
in rangeland and watershed planning for a wide range of environmental
purposes such as the salmon recovery efforts on the Pacific Northwest.
Forestry Incentives Program. This program is authorized under the
Cooperative Forestry Assistance Act of 1978, as amended by section 1214
of the Food, Agriculture, Conservation and Trade Act (FACT) of 1990.
The Forestry Incentives Program was re-authorized under the 1996 Act,
which extended the program through the year 2002. Authorizing
legislation for FIP expired on December 31, 1995.
The FIP primary objective is to increase the Nation's supply of
timber products from private non-industrial forest lands. The program
encourages landowners to plant trees on suitable open lands or cut-over
areas, and to perform timber stand improvements for the production of
timber and other related forest resources. The program is carried out
through annual and long-term cost sharing agreements with private
landowners who improve a stand of forest tress or plant trees.
The fiscal year 1998 budget will provide cost-share funding at the
fiscal year 1997 appropriated level of $6.325 million. Program
technical assistance will be provided by the Forest Service (FS).
Forestry studies have indicated that over 30 percent of all tree
planting on non-industrial, private lands is accomplished through FIP.
Outreach to Socially Disadvantaged Farmers and Ranchers. The budget
proposes to continue this program at $5,000,000. There was a direct
appropriation of $1 million and a transfer of $4.5 million from the
Fund for Rural America to this program in fiscal year 1997. The overall
goal of the program is to increase service to small or limited resource
and minority producers in order to improve the farm income of these
producers. Objectives are to make grants and enter into agreements with
community-based organizations and educational institutions to provide
outreach and technical assistance. The Outreach to Socially
Disadvantaged Farmers and Ranchers program was transferred from the
Farm Service Agency to NRCS in October 1996.
commodity credit corporations programs
NRCS also administers, on behalf of the Commodity Credit
Corporation (CCC), several cost-share programs, key among these being
the programs set forth in the Federal Agriculture Reform and
Improvement Act of 1996 (1996 Act) and also provides technical
assistance to individuals and groups participating in the Conservation
Reserve Program, which is administered by the Farm Service Agency. The
new conservation programs provided by the 1996 Act, which NRCS
administers on behalf of CCC, includes the Environmental Quality
Incentives Program (EQIP), Wildlife Habitat Incentives Program (WHIP),
Farmland Protection Program (FPP), and Conservation Farm Option (CFO).
The 1996 Act also amended the Food Security Act of 1985, to the
continued implementation of the Wetlands Reserve Program (WRP) which
NRCS administers on behalf of CCC.
The Environmental Quality Incentives Program (EQIP) provides in a
single, voluntary program, flexible technical, financial, and
educational assistance to farmers and ranchers who face serious threats
to soil, water, and related natural resources on agricultural land and
other land, including grazing lands, wetlands, forestland, and wildlife
habitat. Assistance will be provided in a manner that maximizes
environmental benefits per dollar expended, to help producers comply
with Title XII of the Food Security Act of 1985, as amended, and
Federal and State environmental laws
Funds of the CCC will be used to fund the assistance provided under
EQIP. The program was funded at $130 million in fiscal year 1996, of
which program authorities for the ACP were used to obligate $99 million
and the program authorities of the GPCP and CRBSCP were used to
obligate $31 million. For fiscal year 1997, $200 million has been
apportioned to implement the EQIP. Of that amount 10 percent was
apportioned by the Office of Management and Budget to pay the cost of
assisting producers in developing conservation plans, engineering
conservation systems, and following-up to successfully apply the
systems called for in the EQIP contract. Fifty percent of the funding
available for the program will be targeted at practices relating to
livestock production.
The program will primarily be available in priority conservation
areas throughout the Nation. The priority areas will be watersheds,
regions, or areas of special environmental sensitivity or having
significant soil, water, or related natural resource concerns. For
fiscal year 1997, 65 percent of the EQIP financial assistance funding
will be provided within priority areas. The process for selecting these
priority areas begins with the local conservation districts convening
local work groups, which are a partnership of the conservation
district, NRCS, Farm Service Agency, Farm Service Agency county
committees, Cooperative Extension Service, and other state, local, and
tribal entities with an interest in natural resources conservation.
They develop proposals for priority areas, develop ranking criteria to
be used to prioritize producer's applications for EQIP, make program
policy recommendations, and other related activities. The priority
areas recommended to NRCS by the local work group are submitted to the
NRCS State Conservationist, who with the advice of the State Technical
Committee and concurrence of Farm Services Agency, sets priorities for
the program, including approval of priority areas.
State Conservationists, with the advice of the State Technical
Committee and concurrence of Farm Services Agency, may also determine
that program assistance is needed by producers located outside of
funded priority areas that are subject to environmental requirements,
or who have other natural resource priority concerns. For fiscal year
1997, 35 percent of EQIP financial assistance funding will be provided
for these significant statewide concerns.
Wetlands Reserve Program (WRP) is a voluntary incentive program to
assist owners of eligible lands to restore and protect wetlands and
necessary adjacent upland areas. The 1996 Act re-authorized the WRP and
provided for funding through the CCC beginning in fiscal year 1997,
extended the duration of the program to 2002, added cost-share
agreements, and restructured the contract payment terms and length.
WRP preserves, protects, and restores valuable wetlands mainly on
marginal agricultural lands where historic wetlands functions and
values have been either totally depleted or substantially diminished.
Wetland restoration of such marginal lands provides landowners with a
financial alternative to continued attempts to produce agricultural
products on such high risk lands. Program delivery is designed to
maximize benefits to wildlife, to provide for water quality and flood
storage benefits, and to provide for general aesthetic and open space
needs. Many of the WRP project sites are within areas that are
frequently subjected to flooding and the flood storage being provided
will lessen the severity of future flood events. The WRP is making a
substantial contribution to the restoration of the nation's migratory
bird habitats, especially for waterfowl.
The WRP is a mandatory program from a budget perspective but is
offered to program participants on a strictly voluntary basis. Under
the WRP, the Secretary of Agriculture acquires permanent easements and
30-year easements, enters into restoration cost-share agreements/
contracts, provides for overhead costs associated with the cost of
purchasing an easement or establishing an agreement, develops wetland
restoration plans, cost-shares the restoration, and monitors the
maintenance of the easements and agreements. Close cooperation with
other Federal and State agencies and private conservation entities is
an integral aspect of program delivery. The State Conservationist, in
cooperation with the State Technical Committee, is responsible for WRP
implementation and operations.
Fiscal year 1996 was the final appropriation under the old program
and provided $77,000,000 to enroll approximately 93,000 acres. The
fiscal year 1997 program will provide $106,000,000 in CCC financial
assistance funds to enroll approximately 130,000 acres. In fiscal year
1998, we propose to enroll an additional 212,000 acres. Technical
assistance funding for fiscal year 1997, and fiscal year 1998 will be
funded from fiscal year 1996 unobligated appropriated funds under the
old WRP account due to the limitation on CCC reimbursements.
From inception of the program in 1992, through 1996, interest in
the program has been exceptional, providing approximately 313,174 acres
enrolled in the program through the end of fiscal year 1996, and
coupled with the fiscal year 1997 and fiscal year 1998 program sign-
ups, approximately 655,174 are expected to be enrolled by the end of
fiscal year 1998. Historically there have been more than five fold as
many acres offered than the program could enroll. The fiscal year 1997
sign-up is the fourth that has occurred under WRP since fiscal year
1992. Unlike previous sign-ups, the fiscal year 1997 effort provides
landowners with the continuous opportunity to seek enrollment in the
program. States periodically rank all unfunded offers and seek
allocation of funding for the highest ranked offers. By following this
process the maximum opportunity for landowner participation is provided
and the WRP is assured of having the best possible list of ranked
offers available for funding during the year.
In response to the 1996 Act and fiscal year 1997 Agriculture
Appropriations Act, the fiscal year 1997 sign-up is separated into
three components: permanent easements, 30-year easements, and cost-
share agreements. Enrollment is targeted to achieve a balance, to the
extent practicable, of each component. The level of enrollment
established for 1997 is 130,000 acres with a requirement that the
initial 43,333 acres of easements be limited to 30-year duration. Thus
far approximately 46,000 acres of 30-year easements have been enrolled.
This enrollment was completed before the enrollment of permanent
easements was initiated. The 46,000 acres represents approximately 50
percent of the 30-year easement offers that have been received.
Approximately 41,000 acres of permanent easements have been enrolled.
This represents approximately 25 percent of the permanent easement
offers. Approximately 9,000 acres of restoration cost-share agreements
have been enrolled. This represents approximately 90 percent of cost-
share agreement offers.
One aspect of the 1997 WRP is the authority provided by the 1997
Appropriations Act to incorporate non-Federal contributions into WRP
projects and to augment the 130,000 acre enrollment cap for fiscal year
1997 by an acreage amount equal to the value of such contributions.
Thus far approximately $9,000,000 of such non-Federal participation has
been identified and should eventually enable us to enroll an additional
11,000 acres. In most instances arrangements are made for the
contributors to directly handle the funding aspects of those projects
for which they wish to participate so that the Department does not
become involved in handling of contributed funds. The primary sources
of these contributions are private foundations, non-governmental
conservation organizations, State agencies, and landowners.
The Wildlife Habitat Incentives Program (WHIP) provides for
implementing wildlife habitat practices to develop upland wildlife
habitat, wetland wildlife habitat, threatened and endangered species
habitat and aquatic habitat. WHIP provides a significant opportunity to
restore native habitat, help landowners understand how to best meet
their own needs while supporting wildlife habitat development, and to
develop new partnerships with State wildlife agencies, nongovernmental
agencies and others.
During fiscal year 1997, WHIP implementation plans and ranking
criteria have been developed, with advice from the State Technical
Committee. We expect to allocate $20 million of the $50 million in CCC
funds that were sanctioned for use by Congress through 2002, to
reimburse participants for installing these practices during fiscal
year 1997. We anticipate accessing $30 million in funds to continue the
implementation of WHIP plans during fiscal year 1998.
The Farmland Protection Program (FPP) protects prime or unique
farmland, lands of State or local importance, and other productive
soils from conversion to nonagricultural uses. This program is
preserving our valuable farmland for future generations.
During fiscal year 1996, the $14.5 million in CCC funds were
provided to 17 states, who also provided their own funds, to purchase
development rights from farmers and ranchers. That allocation led to
the protection of at least 50,000 acres of valuable farmland, on 203
farms in 17 states. Qualifying farmland had to: be part of a pending
offer from a state, tribe or local farmland protection program; be
privately owned; have a conservation plan; be large enough to sustain
agricultural production; be accessible to markets for what the land
produces and have adequate infrastructure and agricultural support
services; and have surrounding parcels of land that can support long-
term agricultural production.
For fiscal year 1997, $2 million was approved by Congress for use
from CCC funds to purchase development rights from farmers and
ranchers. $18 million will be accessed in fiscal year 1998 to continue
the critical process of protecting valuable farmland for the benefit of
future generations.
The Conservation Farm Option (CFO) pilot program provides producers
of wheat, feed grains, cotton, and rice who are enrolled in AMTA one
consolidated USDA conservation program payment, in lieu of the many
conservation programs that are available. Producers must implement a
conservation plan that addresses soil, water, and related resources,
water quality, wetlands, and wildlife habitat. The statute provides
broad discretion in designing CFO pilots, and provides the opportunity
to tap local agricultural initiatives and innovations for improving
environmental quality.
We envision CFO as an opportunity to test the feasibility of
innovative program delivery processes and innovative solutions to
environmental concerns. We look to the locally-led effort to provide
the ideas for innovative pilots. The innovations tested through the CFO
may well be the basis for changes in statutory authorities for
conservation programs into the 21st century. In fiscal year 1997,
pilots will be determined through a Request For Proposal in the Federal
Register. The fiscal year 1997 funding is $2.0 million. For fiscal year
1998, we are requesting authority to use $15 million in CCC program
funds.
conclusion
In his opening message in ``America's Private Land, A Geography of
Hope,'' Secretary Glickman wrote: ``In my view, our next great
environmental goal is conserving our private land. To achieve this
goal, we must accept stewardship on private land as a shared
responsibility between public and private interests. The public funds
we spend for private land conservation is one of our government's
wisest investments, achieving multiple conservation benefits from
modest expenditures on research, technical and financial assistance,
and targeted land retirement.''
As a Nation, we should continue to make wise investments in
research, which underpins every form of assistance we provide to the
owners and managers of private land. The 1996 farm bill also provided
for significant investment in financial assistance through such new
programs as the Environmental Quality Incentives Program, Wildlife
Habitat Incentives Program, Farmland Protection Program, and Flood-risk
Reduction Program. Targeted land retirement was also provided by the
reauthorization of the Conservation Reserve Program and the Wetlands
Reserve Program. Remaining to be addressed for fiscal year 1998,
however, is funding for technical assistance, a primary objective of
the budget proposal I've outlined.
The innovative programs in the 1996 farm bill and the financial
assistance levels established for these programs offer the opportunity
between now and the year 2002, when the farm bill expires, to not only
maintain many of the important conservation gains achieved by our
Nation's farmers and ranchers over the past 12 years but to add
significantly to those gains over the life of the new farm bill. We can
continue to reduce soil erosion over and above the substantial gains
made under the sodbuster and conservation compliance policies and the
Conservation Reserve Program. We can begin to help farmers and ranchers
address water conservation and nonpoint-source water quality management
problems on a scale heretofore not possible. Wildlife habitat
enhancement, for the first time, has become an explicit goal of several
national agricultural conservation programs. Likewise, air quality is
recognized as a pressing conservation problem requiring attention in
certain areas of the country.
But these policy and financial commitments become moot unless the
Department of Agriculture and NRCS, its lead conservation agency, have
sufficient resources to deliver the technical assistance that farmers
and ranchers time and again say they need to take advantage of the
conservation opportunities now confronting them. Our partners in state
and local governments and the private sector, responding to widespread
public support for environmental protection efforts, have increased
their financial commitments to conservation on private land in recent
years. At the same time, they look to the federal government for a
continuing commitment to technical assistance for private land and
private landowners, not the diminishing commitment in real dollars that
has been the trend over the past two decades. It is this technical
assistance that, when coupled with the contributions of our many public
and private-sector partners, will allow us to realize the full promise
of the 1996 farm bill.
We are all in this together. The task is enormous and complex. But
we now have the opportunity in fiscal year 1998 to begin to create the
conservation legacy that Secretary Glickman suggested in A Geography of
Hope will likely determine our Nation's economic and environmental
well-being for years to come.
That concludes my statement. I am looking forward to working with
you in the months ahead to review the proposal and work together to
maximize service to our customers and help them be good stewards of the
land. I will take any questions that members of the committee might
have.
______
Biographical Sketches
lawrence e. clark
Lawrence E. Clark is the Deputy Chief for the Natural Resources
Conservation Programs for the Natural Resources Conservation Service
(NRCS). He has been in this position since October of 1996. Larry began
his career with the Soil Conservation Service in 1967 as a student
trainee in Morgantown, West Virginia, and has held numerous positions
with the agency in Indianapolis, Indiana; Washington, D.C.; Portland,
Oregon; Phoenix, Arizona; and Raleigh, North Carolina. Originally from
Scotland Neck, North Carolina, Larry went to the North Carolina
Agricultural and Technical State University and received his B.S.
degree in Agricultural Economics. He also holds a master's degree in
Public Administration from the J.F. Kennedy School of Government at
Harvard University and a master's degree in Regional Planning from the
University of North Carolina. Larry is married and the father of two
children.
______
carole jett
Carole Jett is the Acting Deputy Chief for Soil Survey and Resource
Assessment for the Natural Resources Conservation Service (NRCS). She
has been in this position since October of 1996. Carole began her
career with the Soil Conservation Service in 1975. She has held several
positions within NRCS including State Conservationist in Michigan;
Assistant State Conservationist, State Soil Scientist, State Soil
Correlator, and Soil Scientist in California; and Soil Survey Party
Leader in Nevada. A native of Reno, Nevada, she received a B.S. degree
in Soil Science from the University of Nevada, as well as doing post-
graduate work with minor course work in Hydrology and Range Science.
Statement of Paul W. Johnson
Senator Cochran. Are there others on your panel who have
opening statements?
Mr. Lyons. If I could, I'd like to let Chief Paul Johnson
say a few words.
Senator Cochran. You may proceed, Mr. Johnson.
Mr. Johnson. Thank you, Mr. Cochran, Senator Bumpers, for
the opportunity to be here with you today.
I would like to make a couple of other introductions. Since
the last time I met with you, we have four new Deputy Chiefs.
We actually have four Deputy Chiefs within our agency, and they
are--although some were here a year ago, they are in a new
position today.
Larry Clark is our Deputy Chief for Programs; Tom Weber for
Management; Carole Jett for Soil Science and Resource
Assessment; and Fee Busby, just on board as of yesterday, our
new Deputy Chief for Science and Technology.
Mr. Bumpers, we stole him from Windrock. Thank you very
much. I think he's been trained well and is ready to go.
Gary Margheim is also with us today. He is our new Acting
Associate Chief.
Most of you know Pearlie Reed has been asked by the
Secretary to become the new Assistant Secretary for
Administration. So he is in that position now. Gary Margheim is
acting in his place and is with us today.
This is my fourth appearance before you. And as you know,
huge changes have occurred. I was counting up our State
conservationists that are different today than what they were 3
or 4 years ago, and we have over 40 new State conservationists
out of 52. We have six new regional conservationists.
I want to add right away that this should not be a cause
for alarm. Every single one of these persons has come through
our system from the ground up and knows the agency well. They
all have many, many years of experience. And it just happens
that this is their time to take their place.
It is a very professional agency, as you know. I think we
probably have fewer political appointees than just about any
agency in Government. And we have about 12,000 employees. As I
have told you before, it is a national treasure, and there is a
terrific amount of strength within our agency.
Over the past 4 years, we have reduced our agency by over
1,500 people. And that is not because we did not need them. I
would say right up front that I think we could use twice the
people that we have today. The work is certainly out there.
We have continued to streamline our agency, and to get a
higher percentage of our people in the field. Through an
external review process, we have completely--or are beginning
to revamp our information technology and our strategic planning
efforts.
I think our partnerships with districts, with RC&D's, State
agencies, and the private sector have never been stronger. We
are very, very pleased with the support that is out there
today, and our ability to work together.
As Jim Lyons mentioned, we have a very good set of programs
in the new farm bill. And I think that this is very important.
We thank you for giving us those tools to work.
Briefly, the Farmland Protection Program is up and running.
And I believe the AFT will be issuing a report within the next
couple days on farmland protection in this country. And I would
urge us all to take a look at it.
I think that we have some serious problems facing us as we
sprawl out across the countryside, whether it be prime land--or
landscapes in the West are changing very rapidly. And it is
probably something that we ought to be paying attention to.
WRP, the new program, is up and running. And we are in the
midst of the usual very heavy signup on that. CRP, as you know,
we are in the middle of a very, very busy month. And from my
understanding of it, the signup is huge.
But there are important things going on out there. We never
before have had so many people come together to help out in a
program as this one and what is happening today.
We have people from State fish and game agencies. We have
foresters. We have volunteers. The Farm Service Agency and
NRCS, the conservation districts are all putting very large
numbers of people to work on this. I do not think we have ever
had a Federal program where we have had so much effort from so
many people. And I think that is a real good sign.
Along with that, we have introduced the new buffer
initiative. And we are suggesting the possibility of up to 2
million miles of buffers by the year 2000. These are vegetative
buffers that include buffers, contour buffer strips, field
borders, and the like.
For farmers who are going to bring their land back into
production, we are going to be working with them to try to
maintain some vegetative buffers on that land. As we are
telling them, farm the best and buffer the rest. And we think
we have some terrific opportunities there.
EQIP rules, the final rules, are going to OMB within the
next few days. The allocations are out, and our people are
already thinking and working with farmers on that.
Compliance is still working. Our reports are, through our
status reviews, that farmers are still maintaining their
systems that they put in place over the last 10 years.
Within the agency, we have new technical institutes that
are up and running and producing the tools that we need to do
the job.
The grazing lands conservation initiative [GLCI], is now in
almost every single State in the country. And there is a
terrific amount of enthusiasm for it from the grassroots
levels.
Our State technical committees are functioning. We think
that this is an exciting part of the last farm bill, and the
opportunity for State and Federal agencies and interest groups
to come together to help guide our programs. And the feedback I
am getting is that these are working in very good fashion.
Locally led conservation has been mentioned over and over
again. It is really cranking up. It is not our locally led
conservation. It is locally led conservation by people at the
local level. Conservation districts, RC&D's are coming together
on it, watershed coalitions and so on.
And briefly, what they are doing is assessing where they
are, setting goals for themselves, and then using our programs
and our technical assistance as tools to achieve those goals.
We think it is an exciting approach. It is one that we
began 60 years ago and are renewing our efforts along those
lines today.
Our watershed program continues, although we have, as you
know, had concerns over the years that perhaps support for it
is not as great as it used to be. And we are working together
with a broad range of people to reach consensus on it.
And we are finding that there is a huge amount of interest
in our watershed program. And we will continue to work with you
on that.
We did get out, as you know, the new publication,
``Geography of Hope.'' The idea there is to try to get the
American public to better understand the important contribution
that private lands make to the health and well-being of our
Nation. We have it out across the country right now, and we are
getting very good response from it.
What is happening on the ground? Our status reviews, as I
have said, are showing we are at least maintaining the status
quo there. We are not slipping.
We just did what we call the mini-NRI, where we went out
and took a snapshot of soil erosion, a statistically valid
sample on our croplands in this country. We are finding that
erosion rates are about the same as they were the previous
year.
So even with Freedom to Farm, we do not feel we are
slipping backward. On the other hand, we all know that we have
got a long way to go before we hit a sustainable level.
We still have problems, though. And I would be remiss to be
in front of you today and not mention some of those. We still
have cropland eroding at fairly high rates in some parts of the
country, whether it be the west Texas, central plains of
Colorado, the fields of Iowa. We still have erosion rates that
in some cases exceed four times what we consider a sustainable
level.
So we should not lull ourselves into thinking that the
great progress that has been made in the last 10 years is all
that we need to do. We still have a long way to go.
Even with our remarkable progress of the past 10 years, 44
million acres of highly erodible land still erode at more than
two times the tolerable level, if we are looking at a
sustainable level over the long haul. Over----
Senator Bumpers. Mr. Johnson, with the chairman's
indulgence, and before I forget it--and I am also going to have
to leave for a few minutes--let me ask you a specific question.
How many arable acres of land in this country are under
cultivation?
Cultivation of Arable Acres
Mr. Johnson. If you look at what we call cropland, it is in
the neighborhood of, I think, about 430 million acres. You add
another 600-and-some million acres in grazing land, and we are
over 1 billion acres, or close to 1 billion acres.
Senator Bumpers. I would like to stick with cropland for
just a moment, 430 million acres?
Mr. Johnson. Just about that, yes.
Senator Bumpers. And how much do we lose a year to urban
sprawl, that is, housing developments and shopping centers,
highways?
Loss of Cropland to Urban Sprawl
Mr. Johnson. It is slowed somewhat from previous years,
although, as I mentioned, there is a concern of an explosion of
that sprawl again taking place right now. But I think that the
Farmland Trust and, in fact, our numbers show that we are
probably losing in the neighborhood of 1 percent. That is
probably close.
Senator Bumpers. So that would be, roughly, a little over 4
million acres.
Mr. Johnson. Three million, somewhere in that neighborhood.
Senator Bumpers. Three million is the figure I had heard.
Mr. Johnson. Yes, right.
Senator Bumpers. But these things are rather alarming when
you look at them. I have been watching this for years, but I
just wanted to nail that down for the record, and for my own
edification. Thank you, Mr. Johnson.
Mr. Johnson. I think beyond that, we need to look at some
of the sprawl that is taking place in the West as well. So it
may not be what we would consider prime farmland, or good
cropland, but it certainly is changing the landscape of the
West.
There is a great deal of concern about that among ranchers
and farmers, and people who are in the West because of those
grand landscapes that are now being chopped up. So I think it
is something that we should be concerned about.
Senator Bumpers. It is obvious that when you have an
acreage of the country, the arable acreage planted to cropland
going down and the population going up, you have got a real
train wreck.
Mr. Johnson. Yes.
Senator Bumpers. It is not going to happen in my lifetime,
but obviously that cannot go on forever.
Mr. Johnson. I talked to a person in Chicago yesterday. In
that area, between Chicago and Madison and Milwaukee, some of
the best farmland in the country today is going under concrete,
very, very rapidly, in fact.
In continuing in the needs and the concerns that we have,
we have been working more over the past many years on sheet and
real erosion.
But we also need to focus much more on gully erosion. We
are finding in looking at that closely that erosion is
considerably more serious than we thought. We think that the
new CRP vegetative buffer initiative will certainly help with
that.
Most waters in the United States are graded close to OK,
although there are serious concerns. We need to understand and
recognize the fact that agriculture is a major contributor to
our surface water and ground water problems. And we should not
close our eyes to that.
Ground water over drafting is still serious. If you look
into the West, particularly, but even in the East, we are
seeing places where we are drawing far more water than is being
replaced. We know that cannot go on forever.
Twenty-one States are reporting saltwater intrusions into
freshwater aquifers, something to seriously be concerned about.
And over 60 percent of our rangelands have serious ecological
problems, still. This includes noxious and exotic weeds and
serious erosion problems.
We need to make sure that we understand where we are on
these things. Although the budget that we submit to you by some
has been called aggressive and even unrealistic, we believe
very strongly that it is not.
In fact, if we look to balancing our budgets, and we know
we have to do that on the financial end, we need to tell you
that we are not doing it on the natural resources end right now
on private lands, in spite of the progress that we have made.
But it is something that we must be aware of and pay attention
to.
Our budgets are small compared to what they have been in
the past. If you look at our 1937 contribution to conservation
on private lands in this country, it was twice what it is
today, in real dollars.
It is .17--seventeen one-hundredths of 1 percent of our
total Federal budget is going to the Federal effort to provide
conservation on over 70 percent of the land in this country.
People have chuckled at me when I have said that this
effort probably needs to be twice the size of what it is today.
But I call your attention to that. And I realize what we are up
against, but I think it is very, very important that we pay
attention to that.
I would like to close with a statement that we made at the
end of our ``Geography of Hope.''
As we move into the next millennium, our Nation must strive
for a state of harmony. We can no longer be satisfied with
slowing erosion, water pollution, and other forms of land
degradation.
Harmony will demand that we set our sights higher, to
improve the land upon which our destiny rests by restoring
those places that are damaged, by enhancing those places whose
condition is merely adequate, and by protecting those areas
that remain pristine.
Achieving the ideal may well prove impossible, but helping
farmers, ranchers, and others try is the fundamental mission of
the Natural Resources Conservation Service. Only then will
private land become an integral part of our Nation's Geography
of Hope.
Thank you, Mr. Chairman. And at this time, we would take
questions.
CCC Funding
Senator Cochran. Thank you, Mr. Johnson.
Thank you, Mr. Secretary, for your statements.
In looking at the budget request, one question strikes me
as we start. Some of our programs this year, because of the
passage of the farm bill last year are mandated by law to
perform with no discretion in the amount of money to be
appropriated. So the jurisdiction of this committee has changed
somewhat by that law which Congress passed and the President
signed.
Among the programs that are now mandated at specific levels
of funding in the Authorization Act are the Wetlands Reserve
Program, the Conservation Reserve Program, the EQIP Program,
the Wildlife Habitat Incentives Program, and others, the
Conservation Farm Options and the Farmland Protection Program.
My question is: In your statement--I guess this is the
Secretary's statement--on page 3, there is a list described in
a table showing the major items in this year's budget request,
and it contrasts them with the comparable figures from the 2
prior fiscal years.
Included are some of these mandatory programs, the Wetlands
Reserve Program, for example. It is pointed out that in fiscal
year 1996, there was $77 million in the budget for that
program, and in 1997 and 1998, there are no funds in the
budget.
Why would you not put money in the budget, recognizing that
those were funds that were going to be spent under the
operation of the farm bill?
Mr. Lyons. Mr. Chairman, we simply broke those out because,
of course, those programs, by statute, are funded out of the
CCC account, so they are broken out separately, identified as
expenditures out of CCC.
Senator Cochran. The Conservation Reserve Program is not
listed at all. Are there funds requested for any of those
programs in your budget request?
Mr. Johnson. The Conservation Reserve Program is probably
under the Farm Services Agency's budget. We will be needing
funds out of the Conservation Reserve Program to service it,
the technical assistance part of it. Otherwise, it is CCC right
now.
And I believe that our technical assistance is probably
going to be coming from carryover from the previous couple of
years. So CRP is now CCC, as well.
Funding EQIP
Senator Cochran. There is a specific request, somewhere in
here I saw, for the EQIP Program, or maybe it is an estimate
that you included in the budget submission, showing the number
of contracts and how much they would cost.
It is estimated, for example, that the Service will award
5,143 contracts, costing approximately $170 million over fiscal
years 1997 and 1998.
What will be the impact of this estimate on the
appropriated accounts that we will have to approve?
Mr. Johnson. I believe you might be referring to WRP, but I
am not----
Senator Cochran. Well, let me read the whole question here
that my staff has given me some background on.
They say the Department of Agriculture announced on March
10, 1997, preliminary State funding allocations for the
Environmental Quality Incentives Program.
Mr. Johnson. Yes.
Senator Cochran. The Department allocated $170 million for
State priority areas. The remaining $30 million would be
allocated to the States when their final needs for technical,
financial, and educational assistance are determined.
How did the NRCS decide on the number of contracts and the
cost?
Mr. Johnson. The total number, the $30 million that is
there will be technical assistance to service those contracts.
The actual contract numbers--maybe I could refer to Larry Clark
on that, who is Deputy Chief of our programs, and let him give
you specifics on it.
Mr. Clark. Mr. Chairman, the $170 million that was
allocated to the States using a formula that we developed in
partnership with a host of other agencies.
Not included in that amount is $20 million of technical
assistance. We also set aside $5 million in the allocations to
deal with native Americans' concerns and social disadvantaged
producers.
We also are holding on to a small reserve in that amount to
deal with unforeseen circumstances as States begin to implement
the program.
Allocation of Funds
Senator Cochran. One complaint that I had in a meeting with
conservation district representatives and others who came to
see me this week was that because of some of these new
programs--EQIP was one of them that was mentioned--there is
less money being allocated for some of the traditional
functions of the Natural Resources Conservation Service.
Watershed was one area mentioned. Surveying and planning was
another.
The actual money that is being given to the States to use
as they choose is getting less and less because of these other
programs that have come along, and are requiring the funds.
Is that an accurate assessment, or was my impression
inaccurate?
Mr. Clark. If I can try to answer that, the allocations
that we make to the States, first, are based on appropriated
funds, the amount that the Congress appropriates to the
agencies.
The second part of the allocation deals with these
mandatory programs. And those allocations are based on our
estimations of how much we will earn in carrying out those
programs. So it is somewhat variable.
In the CRP example, we assume that we will earn so much of
that reimbursable amount based on an estimated level of signup.
And the same thing goes for WRP and so on.
Mr. Johnson. I might add that there are some changes in
this budget that perhaps as people have read it do not really
recognize the Watershed Program. For example, if you put the
financial assistance and technical assistance and planning
together, in the past that was under the 08 and 06 budget
lines, I believe.
This budget is putting the technical assistance and
planning up into our conservation operations, so it looks like
there is only $40 million left for financial--or for the Small
Watershed Program.
There is still $100 million. It is just that it has been
divided out. And it could be that in reading that they felt
that there is no longer $100 million going into the Small
Watershed Program. That could be one of the issues.
Another, of course, is there used to be ACP, which went out
pretty much like a blanket across the country. Every district,
just about, received some ACP funds.
The new EQIP Program will be divided this year into a 65-35
mix, 35 for priority concerns, which will be out across the
States in most--well, I think most districts will be able to
have access to some of that.
And so, I think the districts are saying, ``We had this
money before; now we do not.''
I think they will see that it will be there, but it is
probably coming under a different title.
Mr. Lyons. We should not lose sight of the fact, though,
Mr. Chairman, that while we have certain mandatory accounts,
authorized levels of expenditures that were associated with the
farm bill, that the remainder that is in our discretionary
accounts is declining over time. And that is reality.
So certainly to some degree, there is less money to go
around. That has been felt by conservation districts and other
partners in terms of the work we have been able to do on the
ground, and the support for things like technical assistance.
You know, just looking at the 1996 and 1997 reductions, we
went from $725 million down to $706 million for conservation
operations. We have asked for a little more money because we
have much more demand.
You know, there is a lot of excitement across the landscape
about the conservation tools that are out there. The key is we
need the people out there to deliver the services.
So we have asked for a small increase, but, you know, we
are constrained, as are you, in terms of what we can ask for,
and what you can possibly provide us. So we should not lose
sight of the fact that discretionary accounts decline, and they
are declining.
Mr. Johnson. And I do not want to leave you with the
impression that ACP is still there. The law changed that, of
course. And it is now multiyear contracts.
But it is priority concerns, which may be water quality in
a State, and then there are priority areas which focus on much
more than that.
On the other hand, with the new CRP and the continuous
signup, the opportunity for districts and for local county
committees to be working with farmers on many, many more farms
than we did before, I think is much greater.
So I think if we utilize that continuous signup on CRP, we
are going to see that an awful lot of districts will still have
a fairly strong program. And those vegetative buffers are very
important throughout the landscape.
Conservation Reserve Program
Senator Cochran. You mention that the Conservation Reserve
Program is actually administered by another agency, and that
you provide technical assistance.
Was it your assistance that led to a new emphasis in the
kind of land that will be eligible for enrollment in this next
year, as contrasted with previous years?
Mr. Johnson. That really came out of 10 years of
experience, and a CRP that came about in 1985 under different
conditions than today. We have learned a great deal about it.
We went out across the country and asked farmers and
ranchers and conservationists. They suggested that it ought to
be targeted more toward environmental benefits and not a land
retirement program, as such.
And so, together with the Farm Services Agency, but
primarily with the advice of farmers and ranchers across the
country, and, of course, the Secretary as well being very
supportive of this, the new CRP is probably focusing on more
environmental benefits than we did the first time around.
Senator Cochran. I am told that one of the major results
that has been noticeable, and very clear, is the wildlife
habitat enhancement that has flowed from the Conservation
Reserve Program.
Particularly in our State of Mississippi, we have noticed a
tremendous amount of acreage now that is attractive for
wintering habitat for water fowl that migrate through the lower
Mississippi River Valley. Many other species of wildlife seem
to have been nurtured, although now they are being drowned, I
am afraid, or run up to higher ground, and will be under a lot
of pressure because of flooding in our area right now.
Is this considered to be an important aspect of the
Conservation Reserve Program, and will you continue to try to
identify areas as eligible that will have a wildlife habitat
enhancement factor?
CRP--Mississippi Flyway
Mr. Lyons. Mr. Chairman, I would mention that--and I am
proud to say in partnership with you and some others, who have
worked on these issues over the years, that wildlife is taking
a prominent role in guiding programs like CRP.
In the environmental benefits index that we used to
determine eligible acres, soil erosion, water quality, and
wildlife habitat have, in essence, equal standing.
And there has been tremendous benefit associated with the
CRP program. Yesterday, for example, Secretary Glickman was the
keynote speaker at what is called the North American Wildlife
and Natural Resources Conference, which is probably the
Nation's biggest meeting of professional land managers,
wildlife biologists, agencies such as Forest Service, Fish and
Wildlife Service, et cetera.
I cannot remember having a Secretary of Agriculture being
the keynote speaker at that conference. Highlighting the
success stories associated with CRP, we can point to species--
two species of birds that faced extinction that were--that
extinction was curbed, or at least there is hope for recovery
as a result of CRP.
Twenty or so species of birds in the Mississippi flyway, in
particular, their declines have been arrested as a result of
CRP.
We now have a tremendous opportunity to use those programs
to benefit wildlife, to protect water quality and, as we have
traditionally done, to focus on soil erosion. And we are seeing
the benefits. CRP probably gets the most focus, but through
WRP, the WHIP Program, I think, affords us exciting
opportunities to do some things to protect wildlife resources.
I can remember meeting in this room as a member of the
staff of the House Agriculture Committee, along with my deputy,
who was then staff to the Senate Agriculture Committee, talking
about wildlife in 1990.
And unfortunately, wildlife was equated with endangered
species by a lot of people, and seen as a threat, as opposed to
what it has now come to be realized as a tremendous value, and
a tremendous opportunity for landowners.
I am pleased to have been a part of that, and I am
certainly grateful to you for the leadership you have
demonstrated, going back to 1985 farm bill, and making that an
important priority.
WHIP Program
Senator Cochran. Well, I thank you for that observation,
Mr. Secretary. I know the WHIP Program was authorized in the
recently passed farm bill. It calls for the Department to issue
regulations.
I submitted some comments, hoping that they would be
considered. I wonder when we can expect the regulations to
actually be implemented.
Senator Bumpers. This is good. We are going to pin him down
on this one. [Laughter.]
Senator Cochran. It has not been published yet, I do not
think. So we probably ought to start with that question, first.
When will they be published?
Mr. Johnson. They are in the Department for review right
now. And I think we are going to see them out within a month or
two. So they are coming along. You need to know that.
Senator Cochran. But the sooner they get published, you
know, the sooner we will get the program underway. We have
money in this budget, I understand, of $22.5 million for
implementing the WHIP Program.
Will you have the ability to manage this program so that it
will get started, and some of those moneys will actually be
used----
Mr. Johnson. You bet.
Senator Cochran. In this fiscal year?
Mr. Johnson. Yes; we will. We can promise you that.
Safe Harbor Provision
Senator Cochran. There is a safe harbor provision in the
program providing cost share funds for landowners to create a
habitat that is conducive for endangered species during the
life of the landowners' contract.
Are there safeguards being proposed or considered by the
Department which will protect the landowner's long-term
interest once his contract expires?
Mr. Lyons. Mr. Chairman, we are working on developing an
appropriate safe harbor mechanism, and working with the Fish
and Wildlife Service to that end.
I am certain that we will be able to address those concerns
and ensure that landowners realize the benefit and are not
penalized for improving wildlife habitat, which certainly was
an important part of the discussion when WHIP was considered in
the farm bill.
Yazoo Basin Project
Senator Cochran. There is a demonstration erosion control
issue in our State. The Yazoo Basin demonstration erosion
control project was established in 1984. You may want to look
at this for the record, so maybe I will just submit this for
you to look at.
We had an original funding level of $4.1 million. The Corps
of Engineers is involved, and the Agriculture Research Service,
with the NRCS, and are supposed to work jointly on a program to
demonstrate the use of watershed system basis methods of
reducing flooding, erosion, and sedimentation in six elected
watersheds in the Yazoo Basin.
This area has been increased now to include 16 watersheds.
There has been direct funding for the program. I am curious to
know whether you have any requests for funds, or consider
carrying on this program in the future.
This is a question that we have addressed to our State
conservationist, and I am curious to know whether you intend to
support this effort and allocate funds for this program in the
future.
Mr. Lyons. Yes, we do, Mr. Chairman. We intend to continue
the program and the positive working relationships in the
basin.
Mr. Johnson. I think we can give you a more complete
written answer on that as well to let you know exactly where we
are right now.
Senator Cochran. I am specifically interested in knowing
whether you have gotten any money from the Corps of Engineers,
whether funds have been allocated to the NRCS.
Mr. Johnson. We have, and my understanding is that we are
in the neighborhood of 95 percent complete on those funds to
carry out what they were to do. But we will get you a written
response on that to make sure that we get the numbers correct.
Senator Cochran. Well, we want to be able to have some
influence in the energy and water appropriations bill, too, on
this subject. If we need to specify with language what we
expect the Corps of Engineers to continue to do, we are
prepared to do that as well.
I just want you to know this is a high-priority area, and
particularly with the flooding that we are experiencing now in
this basin, it is a serious problem.
[The information follows:]
MISSISSIPPI, YAZOO DEMONSTRATION EROSION CONTROL
[Fiscal years 1985-96]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Amount of
technical and
Amount financial
requested from assistance Amount NRCS
Fiscal year national received for received from Language reference
headquarters DEC from DEC from corps
national
headquarters
--------------------------------------------------------------------------------------------------------------------------------------------------------
1996......................................... $7,500,000 .............. \1\ $1,785,000 Pg. 67, 1996 Committee Report.\1\
1995......................................... 3,000,000 .............. \1\ 4,430,000 Pg. 65, 1995 Senate Report 103-290.\2\
1994......................................... 10,000,000 $10,000,000 660,000 Report not available.
1993......................................... 10,000,000 8,500,000 115,000 1993 Senate Report 102-334.\3\
1992......................................... 10,000,000 8,000,000 645,000 ( \4\ )
1991......................................... 10,000,000 7,000,000 .............. 1990 Senate Report.\5\
1990......................................... 10,000,000 7,000,000 1,619,000 ( \6\ )
1989......................................... 5,000,000 5,000,000 120,000 ( \7\ )
1988......................................... 5,000,000 5,000,000 100,000 ( \8\ )
1987......................................... 5,000,000 5,400,000 ..............
1986......................................... 5,000,000 5,000,000 .............. .........................................................
1985......................................... 5,000,000 4,100,000 .............. .........................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ These funds were received from Corps for a fiscal year 1994 agreement.
\2\ Fiscal year 1996 Committee Recommendation: The Committee expects progress to continue on the Yazoo basin demonstration erosion control project.
\3\ Fiscal year 1995 Committee Recommendation: The Committee expects progress to continue on the Yazoo basin demonstration erosion control project.
\4\ Fiscal year 1993 Committee Recommendation: $10,000,000 needed by SCS.
\5\ Fiscal year 1992 Committee Recommendation: Included within the Public Law 534 amount is $8,500,000 to cover the Soil Conservation Service share of
the Yazoo Basin, Mississippi, demonstration erosion control projects.
\6\ Fiscal year 1991 Committee Recommendation: The bill includes $7,000,000 for the Soil Conservation Service to continue work on eligible projects.
\7\ Fiscal year 1990 Committee Recommendation: The bill includes $5,000,000 for the SCS to continue work in eligible projects.
\8\ Fiscal year 1989 Committee Recommendation: The Committee concurs with the House provision of $5,000,000 for the Yazoo demonstration project.
Socially Disadvantaged Farmers
Senator Cochran. You mentioned in your comments the program
for socially disadvantaged farmers. I think that was the phrase
that was used.
Is it my understanding that this program has been
transferred from the Farm Service Agency to the Natural
Resources Conservation Service? And if so, why was the program
transferred?
Mr. Johnson. I believe it was transferred because there was
a feeling that we probably were better connected with the
1890's Institution, and with a good delivery system to move
forward on it.
I believe it was transferred last October. We are housing
that program within our agency right now.
I think that as the civil rights issues move forward, that
program and where it will be will certainly be up to the
Secretary, and where it is housed right now may not be where it
is in the future. I think there is going to be some discussion
of that as we move forward.
Senator Cochran. I do not know how you spend the money for
that program, but I would suggest that you consider some of the
historically black colleges and universities, such as Alcorn
State University and Mississippi Valley State University, which
have had a history of working with farmers in our State. There
are probably colleges and universities in other States that are
similarly experienced in some of these initiatives.
To involve them in an active way would be, in my view, very
appropriate and a good use of these funds.
Mr. Johnson. And we are doing that. The program, as we
received it, had been funded at, I believe, $1 million. And
then I think that the fund for rural America put another $4
million into it in fiscal year 1997. So we are up to $5
million, and we are asking that that be continued in our 1998
budget.
Senator Cochran. I noticed that a number of entities have
been funded by the program; 28, I am told. For the record, we
would like to have a list of those so we will know the kinds of
things that you are spending the money on.
Mr. Johnson. We will get that to you.
Senator Cochran. Thank you.
[The information follows:]
Outreach for Socially Disadvantaged Farmers Program Participating
Entities
Alabama: Alabama A&M University, Tuskegee University
Arkansas: Arkansas Land and Farm Development Corporation, University of
Arkansas at Pine Bluff
California: Hermandad Mexicana Nacional
Delaware: Delaware State University
Florida: Florida A&M University
Georgia: Federation of Southern Cooperatives, Fort Valley State
University
Kentucky: Kentucky State University
Louisiana: Southern University and A&M College
Maryland: University of Maryland Eastern Shore
Minnesota: American Indian Center (Project Grow)
Missouri: Lincoln University
Mississippi: Alcorn State University
North Carolina: North Carolina A&T University
North Dakota: Fort Berthold Community College, Little Hoop Community
College
Oklahoma: Langston University, Eastern Oklahoma State University
South Carolina: South Carolina State University
South Dakota: Oglala Lakota College
Tennessee: Tennessee State University
Texas: Prairie View A&M University, Texas A&M University
Vermont: University of Vermont
Virginia: Virginia State University
Wisconsin: Lac Courte Oreilles Ojibwa Community College
Consolidation of FSA and NRCS
Senator Cochran. I have a number of questions that I am
going to submit. Senator Bumpers may be returning here, and he
may have questions to either submit or discuss with you.
One thing I noticed in here was this consolidation of
administrative expenses between the Farm Service Agency and the
NRCS which confuses me a little bit.
They are two distinct missions, it seems. Matter of fact, I
think a concise statement of the NRCS' mission is to provide
national leadership in a partnership effort to help people
conserve, improve, and sustain the Nation's national resources
environment. This is in the budget.
When you talk about FSA in the budget, its mission is to
ensure the well-being of American agriculture and the American
public through the efficient, equitable administration of
funds, commodities, credit, conservation, environmental
emergency assistance, domestic and international food
assistance, and international export credit programs.
How can you combine or consolidate your functions at the
headquarters level with these two, what appear to be, distinct
missions? How do you decide how much goes to each of these
mission functions at the headquarters level?
Mr. Johnson. I do not have the license to say this, but it
confuses me a little bit, too. We think that we do have some
opportunities to share. We are trying to do it now at USDA
service centers.
I think the important thing here is that we maintain our
very well defined missions as agencies. And I do not believe
that we are saying here that two agencies should become one, or
that we should lose our missions, but that where they can
service us and we can service them, we ought to look for ways
in which we can do that.
I have been working with Grant Buntrock on this now for 3
years, trying to figure out ways where we can provide services
to them; if we can do it better than they, and they to us,
without our taking over their policy, for example, or they
taking over our policy.
And I think there are possibilities to do that. We need to
continue to explore it.
Senator Cochran. Well, there is an indication in the budget
that there will be an independent entity asked to examine FSA
and NRCS for opportunities for further consolidation and
centralization of these agencies.
Is this something that is going to be contracted out and
studied? Do you have a request for funds for that purpose in
the budget?
Mr. Johnson. This is to be done in fiscal year 1997, I
believe. I think that we are now scoping out the opportunity to
do that with an outside contractor. It will probably be
absorbed within our operating budget.
Mr. Lyons. This is currently being discussed, Mr. Chairman,
in the Secretary's office as to the structure, and how his
study would proceed. So we are really not in a position, I
think, to offer as many details as you might need.
Office closings--Staff Levels
Senator Cochran. I know that we are going to see the agency
closing field offices and consolidating offices throughout the
country.
Are you going to reduce the levels of staffing in the
process? What are some of the practical results and
consequences for farmers and landowners that we will notice?
Mr. Johnson. Well, to a very great extent, that is up to
you. We do need a strong conservation operations budget. And we
have submitted that to you.
Our view on this is that we do not see the Natural
Resources Conservation Service cutting back further than what
we are right now, or than what we set out to do by the end of
this fiscal year in the consolidation of the service center
effort.
Rural Development, for example, is down to 800 offices now,
or a little over 800. And we are in most of those offices with
them.
The Farm Services Agency is at 2,500 offices, and they are
trying to work through their budget and their workload to see
how many they should be in. And we will continue to be in those
with them.
But then I think that we will continue to work with our
conservation districts and be out there where the work is.
There is still as much land as there was before, even though
there may be fewer farmers, and the commodity programs may not
be there in the future. We do not know for sure yet.
But I think you could view it in terms of maybe a nesting
process where we may all be in some offices. Farm Services may
in another batch with us, and then we are going to probably be
in further offices out there across the country.
Even when we have pulled back to 2,500, we have kept the
presence in some areas. I keep telling people that the idea of
a service center is a good one, because these are hubs through
which--or out of which we work, but that we keep saying that if
we get this together right, an office is also a laptop and a
pickup truck, and that with the new technology, we ought to be
in a number of places across the country, and not necessarily
in four walls that look a certain way.
So we will continue to work with the other agencies so that
we plug in and try to be seen less in terms of our customers.
But we see this as something that does not have to be confined
within four walls at a certain number of places.
Supplemental Funds
Senator Cochran. You mentioned the 1997 fiscal year as the
year that you are going to be looking at ways to further
consolidate and make the agency's operations more efficient in
working with companion agencies.
Do you expect that you will be submitting a request for
supplemental funds, particularly in view of the flooding and
the other problems that have arisen this year in the Ohio River
Valley and the lower Mississippi River Valley?
Mr. Lyons. Yes, Mr. Chairman; in fact, the administration
is working up the numbers, so to speak, in terms of the funds
we feel are going to be needed to address flooding and other
natural disasters that have occurred on the west coast and the
Great Plains, the Mississippi Basin area.
I believe right now we are looking at the Ohio and the
impacts of flooding on the Ohio so we can estimate some of the
damages that have occurred there, so we can complete this
package.
Previous Emergency Watershed Projects
Senator Cochran. We had some previous emergency watershed
projects that were identified in earlier years that were never
finished because the money ran out, or it was not sufficient to
cover all of the projects that were identified.
I know in our State we have had emergency watershed
projects characterized and studied, but never actually
completed because of insufficient funds.
Is there any consideration being given to permitting some
of the funds that might be approved in a supplemental to be
used to meet the needs that have already been previously
identified as emergency in nature and in need of Federal
assistance?
Mr. Johnson. The process that we are going through right
now is to try to collect all of those needs, including the
needs from last year's hurricanes, for example. And we have
needs going back to the early nineties.
So we have not forgotten those, and we recognize that there
still are needs out there. But we are proposing that to the
Department, and then on through the system.
Mr. Lyons. I think, Mr. Chairman, there is a need to assess
the backlog of needs, as you have suggested, and also, I think
to take a forward look.
I know one of the issues we are discussing within the
administration is what constitutes an emergency need. And if,
for example, in the case of restoring flood damage, we are
simply going to put things back the way they were, or take
advantage of the opportunity, perhaps, to make needed
improvements, whether it is in setting levies back, or in other
watershed improvements that reduce the risk of future flooding;
in essence, do it right the first time.
And I would just say that this is an issue I hope we will
have a chance to discuss more, because there is a little bit of
a debate within the administration right now as to what
constitutes an emergency.
In my mind, it would be foolish to simply limit what we do
to restoring the damage done if there is a way to be more
efficient and reduce, hopefully, the likelihood that we will
have to revisit those areas in future years, because we failed
to make needed investments today to reduce the risks of damage
down the road.
Unfunded Needs
Senator Cochran. It would be instructive for us to know how
many unfunded needs have been identified by the State
conservationists around the country. Can we have a breakdown of
the unfunded needs by State, and how you plan to distribute
supplemental funds that might be appropriated to the States for
emergency watershed protection activities?
Mr. Johnson. We will get that to you in writing.
Senator Cochran. Thank you very much.
[The information follows:]
Natural Resources Conservation Service--Watershed and Flood Prevention
Operations, Emergency Watershed Protection Program, and Planned
Distribution of Supplemental Funds
State/project Fund needs total
CA: New Year's storm 1/97............................... $9,900,000
CA (FS): 16 National Forests............................ 2,600,000
ID: New Year's storms 1/97.............................. 6,600,000
ID (FS): 1/97 storm--Boise & Payette National Forests... 1,100,000
NV: New Year's storms 1/97.............................. 17,900,000
OR: New Year's storms 1/97.............................. 7,000,000
OR (FS): 1/97 storm..................................... 150,000
WA: New Year's storms 1/97.............................. 2,000,000
MT: January blizzards................................... 2,000,000
ND: January blizzards................................... 1,000,000
SD: January blizzards................................... 500,000
States: Potential spring floods \1\..................... 18,000,000
CA, ID, WA, OR, NV: EWP flood plain easements........... 10,000,000
CA ID WA OR: Riparian area treatment.................... 5,350,000
--------------------------------------------------------
____________________________________________________
Total............................................. 84,100,000
\1\ Flooding potential from 300-400 percent of normal snowpack melt.
NATURAL RESOURCES CONSERVATION SERVICE--WATERSHED AND FLOOD PREVENTION OPERATIONS AND EMERGENCY WATERSHED
PROTECTION PROGRAM
[March 18, 1997]
----------------------------------------------------------------------------------------------------------------
State/Project Fund needs TA FA Fund needs total
----------------------------------------------------------------------------------------------------------------
CA: New Year's storms 1/97................................ $2,000,000 $7,900,000 $9,900,000
CA (FS): 16 National Forests.............................. 2,600,000 ................ 2,600,000
ID: New Year's storms 1/97................................ 1,100,000 5,500,000 6,600,000
ID (FS): 1/97 storm--Boise and Payette National Forests... 1,100,000 ................ 1,100,000
NV: New Year's storms 1/97................................ 3,000,000 14,900,000 17,900,000
OR: New Year's storms 1/97................................ 1,000,000 6,000,000 7,000,000
OR (FS): 1/97 storm....................................... 150,000 ................ 150,000
WA: New Year's storms 1/97................................ 500,000 1,500,000 2,000,000
MT: January blizzards..................................... 350,000 1,650,000 2,000,000
ND: January blizzards..................................... 250,000 750,000 1,000,000
SD: January blizzards..................................... 120,000 380,000 500,000
MD: Hurricane Fran........................................ 100,000 375,000 475,000
NC: Hurricane Fran........................................ 2,600,000 11,000,000 13,600,000
VA: Hurricane Fran........................................ 975,000 4,025,000 5,000,000
WV: Hurricane Fran........................................ 60,000 225,000 285,000
MS: 1991-94 storm damage \2\.............................. ................ 20,000,000 20,000,000
IL: July 1996 Chicago rains............................... 200,000 1,000,000 1,200,000
OH: Ross, Gallia, Brown Counties.......................... 88,000 330,000 418,000
OK: Grant and Alfalfa Cos................................. 32,000 105,000 137,000
PA: Tioga County.......................................... 20,000 200,000 220,000
TN: Giles and Humphreys Cos............................... ................ 54,000 54,000
AR: March 1997 tornado/floods............................. 30,000 170,000 200,000
AR: March 1997 tornado/floods \1\......................... 1,000,000 5,000,000 6,000,000
IL: March 1997 tornado/floods............................. 400,000 2,000,000 2,400,000
IN: March 1997 tornado/floods............................. 40,000 200,000 240,000
KY: March 1997 tornado/floods............................. 600,000 3,000,000 3,600,000
OH: March 1997 tornado/floods............................. 4,000,000 18,200,000 22,200,000
MS: March 1997 tornado/floods............................. 400,000 2,000,000 2,400,000
TN: March 1997 tornado/floods............................. 400,000 2,000,000 2,400,000
WV: March 1997 tornado/floods............................. 200,000 1,000,000 1,200,000
-----------------------------------------------------
Subtotal............................................ 23,315,000 109,464,000 132,779,000
=====================================================
States:
Potential spring floods \3\........................... 3,000,000 15,000,000 18,000,000
Flood plain easements \3\............................. 15,000,000 ................ 15,000,000
-----------------------------------------------------
Subtotal............................................ 18,000,000 15,000,000 33,000,000
=====================================================
CA, ID, WA, OR, NV: EWP flood plain easements............. 25,000,000 ................ 25,000,000
CA, ID, WA, OR: Riparian area treatment................... 25,000,000 ................ 25,000,000
CA, ID, OR, WA: Salmon memorandum of understanding:
Watershed-based habitat restoration...................... 37,600,000 78,100,000 115,700,000
=====================================================
Total............................................... 128,915,000 202,564,000 331,479,000
----------------------------------------------------------------------------------------------------------------
\1\ Requires special authority for expanded debris removal.
\2\ Requires special authority to address storm damage.
\3\ Flooding potential from 300-400 percent of normal snowpack melt.
EQIP
Senator Cochran. We talked about the EQIP Program earlier.
I have some other specific questions about that, and what would
happen if the States do not use all of their allocations in a
fiscal year.
What happens to the money? Maybe you can answer that for me
right now. If you cannot, you can answer that for the record.
Mr. Johnson. I am being told that if we do not use it, we
lose it. I have a feeling we are going to use it. [Laughter.]
Farmland Protection Program
Senator Cochran. The Farmland Protection Program was one of
those programs that is on my list of mandatory programs. But
your budget, unlike some of the other mandatory programs,
requests $17.3 million for that program.
I assume that will conclude the funding for the program,
and that will be the end. Is that a correct assessment?
Mr. Johnson. I think that completes the funding. I hope it
is not the end.
Senator Cochran. Well, is that program worth continuing?
Mr. Lyons. Yes, sir.
Mr. Johnson. I believe it is, but I believe we need to
continue to look at ways to be innovative in using it. As you
know, it is--we are not----
Senator Cochran. You just pay farmers not to sell their
property to developers, is that what it is?
Mr. Johnson. Well, first of all, we are putting funds to
existing programs that are going on. And so we are helping
State and local programs that have taken a look at themselves,
in their home place, and recognized a real need to maintain
good, high-quality, unique farmland, close to urban areas.
And so it is not our doing it here in Washington saying,
``You ought to do that,'' but rather people at the local levels
saying, ``This is very important to us.''
And then as a nation, we are committing to helping them
with that. We do not go out and pay 100 percent of any
easement, or that is not the idea. The idea is to work together
with States and local governments that already have programs
going. So it is a support system for them.
Mr. Lyons. Mr. Chairman, I think one of the benefits to
this program is that it really is a partnership effort with
States that have similar programs in place.
And having grown up in the urbanized East, I have seen a
lot of farmland converted to condominiums. And it is a
tremendous loss because, of course, some of the most productive
soils we have are in or near these urban areas.
So I think there is a tremendous need. Certainly there is
more need than we can satisfy with the resources that have been
allocated to the program. We would certainly like to work with
you to see if we could expand and improve the program.
Resource Conservation and Development
Senator Cochran. There is a provision in your budget that
calls for an increase of $3 million under the Resource
Conservation and Development Program to fund 400 non-Federal
watershed and rangeland coordinators in 25 States for high-
priority watersheds.
What is the need for these 400 new positions that would be
funded in this program? Why do we need these 400 new people?
Mr. Lyons. Mr. Chairman, actually I think the number is $18
million in terms of the RC&D increase in that particular area.
The rationale is that there are mechanisms that are
developing, have developed, in parts of the country that really
mirror or use as a model the RC&D Program, where coordinators
are brought in to help bring entire communities together to
help guide conservation work done in particular watersheds.
We see a need or a value in using that as one alternative
tool for reaching consensus on what kinds of improvements and
conservation practices are needed in watersheds.
I would suggest that though one of the critical parts that
has got to be linked to this is to make sure that we have the
dollars in the conservation operations to provide the technical
assistance to these watershed councils.
This is a program--or this is an idea, I should say, that
has had its origins in Oregon where watershed councils have
been established to deal with concerns related to loss of
salmon habitat, for example.
We are working very closely with existing watershed
councils, and with conservation districts that have assumed a
similar role, to try and improve the delivery of conservation
technical assistance in those watersheds to deal with the
declines in salmon habitat and other resource degradation.
I think this is an area where we would like to work with
the committee to see if we could not structure the most
effective delivery systems, and capitalize on watershed
councils and conservation districts, and RC&D's, and use them
to the best benefit, to ensure we get the kind of delivery
systems we need in place where appropriate.
Centers of Excellence--1890 Institutions
Senator Cochran. There is a provision in the budget request
that talks about Centers of Excellence at the 1890
Institutions.
Do you know which institutions have been selected, or has
there been a selection process to identify the Centers of
Excellence around the country? Could you let us know which 1890
Institutions have been included in this list, and what that
means in terms of what you are going to do for them?
Mr. Johnson. We will do that. We will get it in writing to
you, what each center of excellence is about, and how it is
being funded, and what we expect of it. Yes.
[The information follows:]
Centers of Excellence
The Centers of Excellence Program was designed to establish
partnerships between 1890 Institutions and USDA agencies. Each
Center is to provide a USDA presence on the 1890 campus,
enhance the capability of the Institution to assist in the
delivery of USDA programs, ensure support from the agribusiness
community, and provide assistance to outstanding students who
commit to careers in USDA. Currently, NRCS has participated in
the establishment of one Center.
In fiscal year 1995, NRCS established the Geographic
Information System and Remote Sensing (GIS/RS) Laboratory at
Lincoln University. The GIS/RS Laboratory laid the foundation
for the Center of Excellence of Leadership in GIS and Wildlife
Management at Lincoln University. In fiscal year 1996, NRCS
contributed $250,000 to the Center. In fiscal year 1997 and
fiscal year 1998, it is estimated NRCS will contribute another
$250,000 for each year. Through the Center, Lincoln University
will become nationally and internationally known for academic
excellence in GIS and wildlife management.
Senator Cochran. Is there a specific line item in this
budget request for funding the Centers of Excellence, or
carrying out that program?
Mr. Johnson. I do not believe there is a specific line item
in it. We do not intend to increase it this year over where we
were last year.
Senator Cochran. Does that money come from the conservation
operations budget, or where does it come from?
Mr. Johnson. Yes; it is in our conservation operations.
Senator Cochran. Is that sort of a pot of money where
nobody knows what you are going to do with it until you do it?
Conservation Operations
Mr. Johnson. No; our conservation operations is not that at
all. It really is the basic conservation program for the Nation
on private lands.
Where it is allocated is based on needs and on strategic
planning, and where we think we can get the greatest return in
conservation on private lands in the Nation. It shifts from
year to year.
As we get better at assessing land health and looking at
partners that we can work together with to beef up the effort,
we try to allocate it as best we can for that. I would not call
it a huge pot of money. [Laughter.]
Senator Cochran. But I have noticed that that gets bigger.
You know, the Secretary talked about how the budget for the
service gets smaller.
Mr. Johnson. Yes.
Senator Cochran. Conservation operations seems to get
bigger.
Mr. Johnson. Well, of course----
Senator Cochran. The mandatory programs seem to get bigger.
I get the impression that is one way to keep this committee
from having as much influence over how the money gets spent.
[Laughter.]
Mr. Lyons. I do not think we----
Senator Cochran. Whether intended or not, I know it is not
intended. [Laughter.]
Mr. Lyons. Mr. Chairman, I would--you know, I use the
analogy of a toolkit to describe all the various conservation
programs we now have in place. I would equate conservation
operations to the funds that we use to hire the carpenters.
A toolkit is not worth much if you do not have people who
know how to use it and apply it, and work with landowners. And
that is why it is critical. And perhaps the request for those
funds has increased simply because the demands are so much
greater.
And the Congress has created so many more new tools which
are extremely valuable, but we have to have money to do it the
old fashioned way, as they say, to get out on the ground and
connect landowners with those tools, and then get the
conservation work applied on the landscape as the landowners
see their needs.
That is why conservation operations is critical. And
frankly, if we can get more money in there, that would be
great, because we need a lot more people out there applying
those conservation tools across the landscape.
Conservation Technical Assistance
Mr. Johnson. Mr. Cochran, I think that you need to be aware
that the CO-1 budget, the conservation operations, this next
year is larger because the watershed technical assistance has
been thrown up into that.
If you look at where we have been over the last, oh, 15 or
20 years, we have been flat or declining in our technical
assistance. And as I said in my earlier remarks, we have in the
past put a much greater emphasis on this technical assistance
out to landowners.
And if you ask the private sector how we can get
conservation on the land, the one that always rises to the top
is more technical assistance. And that is out of that budget.
In fact, that is that budget.
Mr. Lyons. Mr. Chairman, just one last point I would make,
and I hope you have a copy of or have seen a copy of the
``Geography of Hope'' document that Paul and NRCS generated.
But there is an interesting table in here, and I will give
you this copy that tracks trends in appropriations for
technical assistance, financial assistance, in our land
retirement programs, basically the three areas in which we work
and focus.
And what this trimline shows, going back to 1934 when we
first started doing business, is that funds for financial
assistance have declined in real dollars over time, that the
funding for technical assistance increased slightly, but really
has been flat for the past, oh, 15 or 20 years.
And, of course, the Land Reserve Program funding has
increased, in part because we have moved toward creating
programs like CRP and WRP, et cetera.
It is an interesting trimline, because as Paul said, we
used to put a lot more money into conservation on the landscape
in terms of financial assistance.
And the demand is increasing for technical assistance. But
really that program has flat-lined, and I will be glad to share
that with you.
[The information follows:]
[GRAPHIC] [TIFF OMITTED] T01MA18.039
Closing Remarks
Senator Cochran. Well, I think overall, we have to be
impressed with the work that has been done in the conservation
area to help protect our soil and water resources, and help
assure that we have the capacity to continue to produce in an
efficient way the food and fiber we need, and the huge exports
that we see each year going out of this country.
It is a very impressive success story, in my opinion. I am
quick to give credit where it is due in this area. I think the
NRCS deserves a lot of credit, as well as the conservationists
in the districts all over the country, especially in my State
where they are very active. It is a serious effort that is
being undertaken.
The State NRCS departments have worked hard on it. We have
had a lot of emphasis in this area by State government in my
State. A lot of people have done a lot of good work to bring us
where we are today.
I do not have any other questions at this point. But I do
have some which I will submit and Senator Bumpers may have some
comments.
I am going to have to go to another meeting. And I am
prepared now to turn over the gavel to this guy. We do not have
a quorum so we cannot pass anything.
Senator Bumpers. Mr. Chairman, you do not have to turn the
gavel over. I am going to submit questions in writing to Mr.
Lyons about three water projects in my State, Bethtensal, Palo
Mato, and the prairie water systems. Those are becoming
increasingly critical in our State.
And, you know, we produce 43 percent of the rice. In
another 20 years, we will be producing about 10 percent of the
rice if we do not do something pretty dramatic pretty soon.
Submitted Questions
And I will phrase those questions in such a way--I think
you are familiar with those things. I will submit those in
writing, Mr. Chairman.
Senator Cochran. Thank you, Senator.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]
Questions Submitted by Senator Cochran
conservation operations
molokai soil and water conservation district
For fiscal year 1997, the Committee included $250,000, for
continued support of agricultural development and resource conservation
in Hawaiian areas serviced by the Molokai Agriculture Community
Committee.
Question. What assistance does NRCS provide in this regard?
Answer. NRCS provides technical assistance to the Molokai Soil and
Water Conservation District (SWCD) and the farmers, ranchers, and other
participants in the Molokai Agriculture Community Committee (MACC)
program. The technical assistance NRCS provides is funded from the NRCS
budget, not the $250,000 appropriation to the SWCD for the Molokai
Agriculture Community Committee program. The SWCD uses the $250,000
appropriation for cost sharing conservation project applications and
administrative costs.
The technical assistance NRCS provides is mainly focused on
preparing and implementing natural resource conservation plans.
Implementing these conservation plans involves designing irrigation
systems, grazing management systems, windbreaks, and other resource
conservation practices. In addition, NRCS provides educational and
technical assistance to the clients they serve. NRCS also provides work
space, equipment, and training to the MAC and SWCD staff.
Question. Is funding for this activity included in the budget
request for fiscal year 1998? How much is included?
Answer. NRCS did not specifically request funds for the MAC in the
fiscal year 1998 budget. However, every year since fiscal year 1992,
the Molokai Soil and Water Conservation District (SWCD) has spent
$250,000 for the Molokai Agriculture Community Committee (MACC)
program.
bayou meto and beouf/tensas areas
For fiscal year 1997, the Committee directed NRCS to continue
supporting programs related to Bayou Meto and Beouf/Tensas areas and to
continue planning and design activities in the Kuhn Bayou project, all
in Arkansas.
Question. Please provide for the Committee an explanation of the
work completed to date on these projects, and estimates of the funds
needed in the future, by fiscal year, to complete each of these
projects. What is included in the fiscal year 1998 request for each of
these?
Answer. Work has continued on the Bayou Meto, Boeuf/Tensas and Kuhn
Bayou projects in 1997 which was the third year of this effort at the
direction of Congress.
Specifically in Bayou Meto, the inventory work for the on-farm part
of the work is now complete and the report is being reviewed by the
sponsoring local organization. Public meetings to inform the public of
the results of these studies and the establishment of a hydrology data
base will be carried out during the remainder of this year. The Corps
of Engineers has been authorized to plan a flood control/irrigation
project in this area and NRCS will play a major role in that effort
with funding anticipated from the COE.
Boeuf/Tensas local sponsors continue to inform the public of the
water decline and water quality status. They are in the process of
organizing an irrigation district. NRCS is working on developing
geographic information system (GIS) data for use in the study. Work is
about 50 percent complete on this project.
Kuhn Bayou is part of the Eastern Arkansas project and NRCS is
performing some of the survey and design functions for this project. A
natural resources conservation plan has been developed. The sponsors
are seeking funding sources for implementation.
The fiscal year 1998 budget request contains funds which could be
used for these projects.
loess hills of iowa
For fiscal year 1997, $400,000 was included for continuation of the
pilot program to address erosion in the Loess hills of Iowa.
Question. What is the status of this pilot project? When is it
scheduled to be completed? How much will this project require, by
fiscal year, to complete? What funds, if any, are included in the
fiscal year 1998 request.
Answer. Fiscal year 1997 funds have been provided to the Loess
Hills Development and Conservation Authority (LHDCA). The LHDCA is an
entity that was created by the Iowa Legislature in 1993 to help deal
with the special natural resource concerns in the deep Loess area of
the State.
The funds are being used together with state appropriations to
provide cost-share to local units of government that are installing
stream channel grade stabilization measures on targeted degrading
streams. Fiscal year 1997 funds have been obligated for structures in
11 counties. In addition to the $400,000 in Federal funds, $1,012,000
in State and local funds are being committed to these projects.
Projects receiving fiscal year 1997 funds should be completed by
the end of this calendar year, and the 1998 budget does not
specifically identify funds for the pilot program.
The issue will require approximately $24.1 million in Federal and
State funding over the next 10-12 years in order to complete needed
installations. Local leader are suggesting that this amount be split
evenly from Federal and State sources. Additional local dollars will be
used to supplement these funds, and to operate and maintain channel
stabilization measures.
franklin county lake
Funding of $750,000 was included in the fiscal year 1997
appropriations for Conservation's Operations to provide design and
technical assistance in Franklin County, Mississippi.
Question. What is the status of this project?
Answer. In fiscal year 1997 NRCS received $550,000 for the Franklin
County Lake to complete the in-house engineering design, soil mechanics
work and A&E for final spillway design. An interagency agreement was
prepared to transfer $300,000 from NRCS to the US Forest Service to be
used for land acquisition and exchange support, securing permits,
environmental mitigation and support for removal of timber.
The work is on schedule and construction plans specifications are
currently being initiated. The design is to be completed this fall and
ready for construction next fiscal year.
Question. What environmental and economic benefits will be realized
upon completion of this project?
Answer. The project is expected to provide recreational benefits to
the citizens of Franklin County as well as Mississippi and surrounding
states. A mitigation plan is being completed to assure that fish and
wildlife and other environmental benefits are maximized for the project
area.
Question. What funding is included in the fiscal year 1998 request?
Answer. No specific funding is included in the fiscal year 1998
request. However, the fiscal year 1998 budget request contains funds
that could be used for the project.
great lakes basin program
For fiscal year 1997, $250,000 was included to continue work on the
Great Lakes Basin Program for soil and erosion and sediment control.
Question. What is the status of the project? Are there other
federal agencies which contribute funding for this project? Which
agencies and how much is each contributing?
Answer. This project has been active since its inception in 1991.
No other federal agency contributes funding for this project. NRCS is
contributing $350,000 in fiscal year 1997.
Question. What is the timetable to complete this project? What
funding will be needed in each fiscal year to complete this project?
Answer. The project is expected to continue through the year 2002.
$750,000 will be needed in each fiscal year through the year 2002 to
complete this project.
Question. How much is included in the fiscal year 1998 budget
request?
Answer. $750,000 is available in the fiscal year 1998 budget
request for this project.
great lakes watershed initiative
For fiscal year 1997, the Committee stated its expectation that the
Department provide technical assistance and funding to assist the Great
Lakes watershed initiative.
Question. What is the status of this project?
Answer. Twelve demonstration farms, six in the Lake Erie drainage
and six in the Lake Ontario drainage, are currently being established.
The next phase of compiling data and analyzing results on practices
such as integrated pest management, constructed wetlands for dairy
facilities, bark bed filter strips, grass filter strips, stabilized
livestock crossing systems, chemical mixing and rinsing pads, packed
gravel barnyard treatment systems and alternative watering systems has
been initiated.
Question. What is the timetable to complete this project? What
funding will be needed in each fiscal year to complete this project?
Answer. This initiative is scheduled to run through the year 2002.
NRCS technical assistance funds in the amount of $75,000 will be needed
each fiscal year through the year 2002.
Question. How much is included in the fiscal year 1998 budget
request?
Answer. $75,000 is available in the fiscal year 1998 budget
request.
chesapeake bay
The Committee provided $4.75 million for continued work on the
Chesapeake Bay.
Question. What is the nature and status of this work? What are the
environmental benefits of this work?
Answer. This work entails providing technical assistance to farmers
throughout the Chesapeake Bay drainage basin to plan and install best
management practices (BMP's) to control runoff, reduce erosion, manage
nutrients and pesticides, and improve and maintain wildlife habitat.
Specific accomplishments to date include the installation of nearly
1,500 animal waste systems to safely contain manure, nutrient
management plans on over one million acres to keep nutrients from
washing into or infiltrating water supplies, dead bird composting
facilities on more than one third of the poultry operations to reduce
the volume of carcasses, kill pathogens, prevent odors and protect
water quality and resource management systems have been applied to more
than 100,000 acres to reduce erosion and water runoff from agricultural
land. Integrated pest management is now being practiced on over 1.2
million acres in the basin. About 3,000 acres have been enrolled in the
Wetland Reserve Program. The work is on schedule to reach the goal of a
40 percent reduction of nutrients in the Bay by the year 2000.
Environmental benefits include improved water quality in the Bay
and its tributaries, through a reduction of sediment, nutrients and
pesticides. Improved wildlife/fisheries habitat in the Bay and
throughout its drainage basin is also an environmental benefit.
Question. How much funding will be needed, by fiscal year, to
complete this project?
Answer. A base level of $4.75 million will be needed through fiscal
year 2000 to reach the primary goal of a 40 percent reduction of
nutrients the Bay.
Question. How much is included in the fiscal year 1998 request?
Answer. The fiscal year 1998 budget request includes $4.75 million
to continue this work.
gis center for advanced spatial technology
The Committee has supported the GIS Center for Advanced Spatial
Technology in Arkansas and its work with digital soil maps and the
continuation of the National Digital Orthophotography Program.
Question. Has NRCS maintained its strong relationship with the
center and has NRCS remained the lead agency within the USDA for the
development of GIS capabilities?
Answer. Yes, the NRCS has continued to maintain a strong
relationship with the GIS Center for Advanced Spatial Technology (CAST)
in Arkansas.
The NRCS is a leader within the USDA for the development of digital
GIS information such as the digital orthophotography, soils databases
and Natural Resource Inventory (NRI) databases. The Forest Service is
also a major user of GIS within the USDA. With the increasing
availability of digital geospatial databases, the NRCS is using GIS
technology in more offices than ever before. GIS is being used at all
levels of the organization, this includes the field service centers,
state, regional and national headquarters offices.
We foresee the largest use of GIS will happen at the field service
center level. The NRCS has about 300 sites presently using GIS. The
NRCS and the Farm Service Agency are currently working on a GIS
Business Process Reengineering project with the goal to provide
improved services to USDA customers by using GIS and digital geospatial
data. We believe business processes which acquire, access, analyze,
update, share and display geospatial data may have the greatest
potential to increase information accuracy, data-sharing and at the
same time reduce duplication and customer time spent at the field
service centers.
mud river dam project
The Committee in fiscal year 1997 encouraged the Department to
continue working on the upper MUD River Dam project in West Virginia.
Question. What is the status of this project? What other Federal or
State agency's funding is available for the project? What funds are
needed, by fiscal year, to complete this project? How much is included
in the fiscal year 1998 budget request?
Answer. The Upper Mud River Watershed Project is about 95 percent
completed. A contract for the recreation facilities was awarded and
construction is underway for the final recreation phase. A contract for
dam repairs is planned to be awarded in April 1997, with work beginning
in June 1997. All work will be contracted in fiscal year 1997 and
project completion is expected by December 1997. No fiscal year 1998
budget request is anticipated.
mississippi delta water resources study
The Committee provided fiscal year 1997 funding for the Mississippi
Delta water resources study at the fiscal year 1996 funding level.
Question. What is the status of this study?
Answer. The Mississippi Delta Water Resources Study is
approximately two-thirds completed with about 75 percent of the needed
data collected. Draft reports have been prepared. Approximately 5 staff
years will be dedicated to this project from within NRCS and the
remaining staff time needed will be from other sources.
Question. What funds are needed, by fiscal year, to complete this
study? How much is included in the fiscal year 1998 budget request?
Answer. The study is scheduled for completion at the end of fiscal
year 1997. No funds are requested for the study in the fiscal year 1998
budget.
golden meadow, louisiana plant materials center
The Committee provided $100,000 to Golden Meadow, Louisiana, Plant
Materials Center for fiscal year 1997 to facilitate the testing of
application technologies in the development of an artificial seed for
smooth cordgrass.
Question. What is the status of the project?
Answer. The project has gone well. Protocols have been worked out
that permit production of artificial seed at will. The plan is to
produce large numbers of them during the spring of 1996 in order to
establish field plantings. The field plantings will evaluate
establishment and survival characteristics under different
environmental conditions. Depending on the success of field plantings,
it may be necessary to ``fine-tune'' planting methodology and/or
production techniques of the artificial seed.
Question. What funds are needed, by fiscal year, to complete this
study? How much is included in the fiscal year 1998 budget?
Answer. The 1998 budget will continue funding at a comparable level
in order to maintain the momentum and progress that has already been
achieved. A funding level of $150,000 annually would allow for
completion of the project by the year 2001.
crowley, louisiana, rice research station
Question. Has the NRCS continued its work with the Crowley, LA,
Rice Research Station on the development of additional species which
will help stop erosion on inland wetlands and barrier islands? What
programs have the NRCS helped with the Station? How much is requested
in your fiscal year 1998 budget to help with this research?
Answer. The relationship between the NRCS and Crowley Rice Research
Station has been a productive one which has led to development of an
artificial seed for smooth cordgrass. This species can be very
effective in reducing erosion on inland wetlands and barrier islands.
Since the species seldom produces viable seed, however, a unique
approach of using artificial seed was adopted to provide adequate
materials. The effort has now reached the point where field testing
will be undertaken.
Another species, California bullwhip, with proven erosion control
characteristics also has potential for tissue culture work. This is
being considered by the Research Station, and preliminary evaluations
of their potential are being undertaken in order to develop a new
release. NRCS has helped the Station in identifying those species that:
have both the greatest application for conservation uses, and the
potential for tissue culture work. NRCS also assists in field testing
of new materials and has been able to accelerate such efforts through
productive interactions with the Station. Examples include: efficiency
of transplant methodology and hydro-mulching of artificial seed.
Continuation of the interaction between NRCS and the Crowley Rice
Research Institute would cost $125,000 in fiscal year 1998.
research on nutria-resistant materials
The Committee provided in fiscal year 1997 $150,000 to continue a
program for research on nutria-resistant materials.
Question. What is the status of this research and the location
where the research is on-going?
Answer. The work to date has focused on smooth cord grass with an
underlying strategy of producing sufficient plants in a restoration
effort to survive impact of nutria activities. The effort has reached
the stage where it can now be field-tested in 1996 on a broader scale.
Previous evaluations have been undertaken at the Crowley Rice Research
Station. Current plans are to establish 10 evaluation plots in Cameron
Parish, LA. It is estimated that restoration success can probably be
achieved even with a 10-20 percent loss to nutria during plant
establishment. Other options such as including chemical additives to
gel capsules will be explored as warranted.
Question. Is funding requested for fiscal year 1998 for this
project? How much?
Answer. The 1998 budget proposes to fund this work at the current
level of $150,000 in order to maintain momentum that has been
generated.
rural recycling and water resource protection initiative
The Committee provided $3 million for the continuation of the
multiyear rural recycling and water resource protection initiative in
the Mississippi Delta region of Louisiana, Arkansas and Mississippi.
Question. What is the status of this project?
Answer. The project is approximately one third complete.
Question. What funds are needed, by fiscal year, to complete this
initiative? How much is included in the fiscal year 1998 budget
request?
Answer. Approximately $3 million is needed in each fiscal year from
1998 through fiscal 2002 to complete the initiative. The fiscal year
1998 budget request includes $3 million for the rural recycling and
water resource protection initiative.
new york city watershed agriculture program
Question. How did the Department assist in the evaluation of the
New York City Watershed Agriculture Program? How much money does the
fiscal year 1998 budget request for this program?
Answer. The Congressional earmark stated that NRCS would assist the
Watershed Agricultural Council with the evaluation of its programs to
be conducted by EPA in 1997. To date there has been no contact from the
Watershed Agricultural Council or EPA indicating the assistance they
desire from NRCS. The 1998 budget did not include a specific request
for this program.
indian creek watershed project
How is the Department providing assistance to complete the Indian
Creek Watershed project in Mississippi in fiscal year 1997?
Question. What is the status of this project?
Answer. The plan for the Indian Creek Watershed in Mississippi has
been completed by NRCS and is now undergoing review here in the
National office. Planned works of improvement provide flood protection
to approximately 350 socially and economically disadvantaged residents
and business owners in the rural community of Luka, Mississippi. The
cost of the project is estimated at $3.6 million and the benefit/cost
ratio is 0.3/1.0.
Question. What funds are needed, by fiscal year, to complete this
initiative? How much is included in the fiscal year 1998 budget
request?
Answer. Approximately $3.06 million of Public Law 83-566 funds
would be needed to implement this project. The project will compete
with other approved projects for funding.
trinity basin cooperative study
The Committee urged the Department in fiscal year 1997 to provide
necessary funding to meet Federal obligations to complete the upper
Trinity basin cooperative study in Texas.
Question. What is the status of this study?
Answer. The study is progressing well. This is the fifth year of
this seven year study being carried out with the Tarant County Water
District.
Question. How much is the Department providing in fiscal year 1997?
How much is in the fiscal year 1998 budget request for this study?
Answer. Funding for fiscal year 1997 was $200,000 and is being used
for further development of the SWAT model to include in stream
dynamics. With that capability, the model will be able to be linked
with several EPA models such as WASP4 for reservoirs. In addition,
extensive sampling and monitoring of streams is being carried out so
that the model can be calibrated to existing conditions. The fiscal
year 1997 funding should provide enough money to complete the project.
monroe county, west virginia, plant materials center
In the fiscal year 1997 Committee report, the Department was
instructed to begin construction of the plant materials center in
Monroe County, West Virginia, from funds earmarked for this purpose in
previous appropriations.
Question. What is the status of this plant materials center?
Answer. The conceptual design package dealing with buildings to be
constructed at the plant materials center is nearing completion. It is
scheduled to be reviewed by the end of March so that bids can be
received. In late April, it is anticipated that the contract can be
awarded for the construction of buildings. Construction should begin
later this summer.
Question. What is the amount that the Department will use in fiscal
year 1997 for this project? How much money is in the fiscal year 1998
budget request for this project?
Answer. The fiscal year 1997 budget estimate for this plant
materials center being constructed at Alderson, West Virginia is
$401,000. We anticipate that the funding level for fiscal year 1998
will be the same.
Question. Does the Department have a feasibility study on the
establishment of this plant materials center? When will you provide it
to the Committee?
Answer. During the course of the development of the fiscal year
1996 appropriations bill and the accompanying report, agency officials
discussed with Subcommittee staff several ways to approach the plant
materials center in West Virginia. As those discussions concluded, the
Subcommittee staff relayed that it was decided to include language
which would direct the construction of this center utilizing funds
normally included in the appropriations for this program. Even though a
feasibility study was discussed, the usefulness of the center and the
Subcommittee's intent was clear. Therefore, no agency staff time or
funds were dedicated to a study and we have proceeded with design and
anticipated construction of the plant materials center.
national natural resources conservation service foundation
Question. The Committee included bill language in the fiscal year
1997 Appropriations bill which allowed up to $250,000 of conservation
operations to be used for the National Natural Resources Conservation
Service Foundation. How much did the Department provide in fiscal year
1997?
Answer. The Department did not Fund the Foundation in fiscal year
1997. A small amount of staff time was used to collect the nominations
for the Board, file them, and to respond to questions about the status
of the Foundation.
Question. How much is requested in the fiscal year 1998 budget?
Answer. No funds are requested for the Foundation in fiscal year
1998 because some members of Congress have questioned using Federal
funds for this purpose.
watershed and flood prevention operations
devil's lake basin
Question. Please provide a summary of the situation in the Devil's
Lake basin, the actions that NRCS has taken to address this situation,
and the funding included in the fiscal year 1998 request to address
this problem.
Answer. Devils Lake residents and agencies are preparing for a lake
level of 1,440.5' in June. The snow pack is still heavy with 3" of
stored moisture. The Corps of Engineers is raising the City of Devils
Lake dikes to 1,440 for spring runoff. The North Dakota Department of
Transportation is raising three state highways and one federal highway
to 1,440 and adding erosion barriers. The North Dakota Soil and Water
Commission is promoting the As Soon As Possible (ASAP) wetland
restoration program, and with the newest 70 applications will achieve
10,200 acre-feet of storage.
NRCS is participating on the Devils Lake Interagency Task Force and
assisting the State of North Dakota in implementing the Devils Lake
Emergency Response Plan for Upper Basin Water Retention.
Eight NRCS Field Offices are providing priority scope and effect
determinations where health and safety are issues.
NRCS detailed the Watershed Regional Technology Team from Lakewood,
Colorado to develop a comprehensive water management plan for the St.
Joe and Calio Sub-Watershed Basins.
NRCS is working with the Devils Lake Task Force to develop
comprehensive water management plans in nine sub-basins over a 9 year
period. The expected cost is $4.3 million and a funding source has not
yet been identified. However, the Basin has been declared a priority
area for both the Conservation Reserve and Environmental Quality
Incentives Programs.
watershed projects status
The Committee expressed its expectation that work continue on the
Little Sioux and Mosquito Creek watersheds in Iowa; the Little Auglaize
watershed in Ohio; Little Whitestick-Cranberry Creek in West Virginia;
the Potomac headwaters in West Virginia; and Virgil Creek in New York.
Question. What is the status of each of these projects? What is the
timetable for completion for each of these projects? What funding will
be needed in each fiscal year to complete each project?
Answer. The Little Sioux Watershed Project in Iowa is one of the
eleven watersheds authorized under the Flood Control Act Public Law 78-
534. The project received directed funds of $1.4 million in fiscal year
1997 and is about 68 percent completed. The remaining structural work
could be installed by 2016 at an annual cost of $750,000 and the
remaining land treatment could be applied by 2041 at an annual Federal
cost of $1,400,000.
Mosquito Creek Watershed in Iowa is authorized under the Watershed
Protection and Flood Control Act Public Law 83-566. The project
received directed funds of $100,000 in fiscal year 1997 and is about 85
percent completed. Expected future funding needs are about $1.5
million.
The Little Auglaize Watershed in Ohio is authorized under Public
Law 83-566 for flood control. The project received directed funds of
$1.3 million in fiscal year 1997 and is about 95 percent completed. At
present funding levels and Ohio priorities, the project will be
completed in fiscal year 1999.
Little Whitestick-Cranberry in West Virginia is authorized under
Public Law 83-566 and received directed funding of $3.4 million in
fiscal year 1997. This installs the first phase of the project and the
remaining needs are about $3.0 million.
Potomac Headwaters Watershed is a large Public Law 78-534 project
in West Virginia, Virginia, and Maryland and is administered by West
Virginia. The project received $2.3 million in directed funds in fiscal
year 1997 and the remaining needs are about $80 million. A portion of
the fiscal year 1997 funds are being utilized to begin Community-based
Comprehensive Resource Management Plans where 1996 floods occurred.
Virgil Creek Watershed in New York is a Public Law 83-566 Flood
Prevention project with a single dam. The project received directed
funds in fiscal year 1997 of $2.0 million to contract for the first
phase of the dam. Every effort will be made to direct the remaining
$2.5 million in fiscal year 1998.
Question. How much is included in the fiscal year 1998 budget
request for each of these projects?
Answer. No project specific budget requests are made by NRCS for
Public Law 83-566 and Public Law 78-534. The Watershed Protection and
Flood Prevention Operations appropriation is allocated according to the
quality of the approved projects, their contributions to the NRCS
Strategic Plan, and commitments of sponsors.
lower amazon and flat creek project
The Committee encouraged the Department in the fiscal year 1997
Appropriations bill to work with local government entities and using
other conservation programs in Oregon to provide assistance on the
Lower Amazon and Flat Creek project.
Question. What is the status of this project? Which local
government entities is the Department working with? Were other
conservation programs used? If so, which ones?
Answer. The Lower Amazon and Flat Creek project is a proposal to
modify existing flood control measures to restore flood plains and
wildlife habitat near Eugene, Oregon. The project is in active planning
by the U.S. Army Corps of Engineers, Bureau of Land Management, Natural
Resources Conservation Service, City of Eugene, and the Lane County
Council of Governments. Opportunities for other conservation programs
are being examined, including State of Oregon as well as USDA Wildlife
Habitat Incentives Program and the Wetland Reserve Program.
Question. How much money is requested in the fiscal year 1998
budget for this project?
Answer. Again, no project specific fiscal year 1998 budget
proposals have been made by NRCS.
west virginia resource management plans
The Committee directed the NRCS in the fiscal year 1997
Appropriations bill to provide resources to complete resource
management plans for communities in West Virginia where the 1996 floods
occurred.
Question. What is the status of these community-based comprehensive
resource management plans?
Answer. NRCS in West Virginia has provided the necessary resources
to complete innovative community-based comprehensive resource
management plans for communities devastated by the floods of 1996.
fiscal year 1997 funds were made available from the Potomac Headwaters
Public Law 534 allocation and is being used to secure an A/E consulting
firm to develop a North Fork South Branch Potomac River Watershed Plan.
The consultant will work under the direction of a NRCS Community Based
Assistance planner and will provide direct assistance to the local
resident North Fork Watershed Committee.
Question. What is the amount of necessary resources provided in
fiscal year 1997? How much is requested in the President's fiscal year
1998 budget?
Answer. $300,000 was made available in March, 1997, and no specific
additional needs or budget requests have been identified for fiscal
year 1998.
water storage and delivery systems on hawaii and maui
Question. How has the Department enhanced the water storage and
delivery systems on the islands of Hawaii and Maui as the Committee
directed in the fiscal year 1997 Appropriations? How much does the
Department estimate that it will cost to enhance these systems? How
much is requested in the President's fiscal year 1998 budget?
Answer. NRCS and Hawaii state sponsors have developed three water
storage and delivery system plans on the islands of Hawaii and Maui
under authority of the Watershed Protection and Flood Control Act
Public Law 566.
On Maui, the Upcountry Maui Watershed Plan/Environmental Impact
Statement (EIS) proposes storage and a distribution system to irrigate
473 acres in Upper Kula, supply irrigation water for the Hawaiian
farmers in the Department of Hawaiian Homelands Keokea agriculture
plots, and better utilize Other Important farmland. The project also
relieves the demands on the Olinda Water Treatment Plant and will aid
potable water supplies. The total cost of the project is $9.0 million
with about 49 percent paid by the local sponsors. The Final Plan/EIS is
complete.
On the Big Island of Hawaii, two water storage and delivery system
projects are developed. The Waimea-Paauillo Draft Plan/EIS has been
completed The Plan proposes a 131 million gallon reservoir at Kauahi, a
reservoir supply line, extended irrigation system, and a livestock
drinking water distribution system. The project will serve 167 farmers
on 1,985 acres and 265 ranchers on 22,900 acres. Most of the farmers
and ranchers are of native Hawaiian ancestry. Total installation will
be $17.4 million
The Lower Hamakua Watershed Project on Hawaii was initiated in
response to serious social and resource problems that followed the
failure of a major sugar plantation. The draft Plan/EIS is being
revised to address botany, stream archaeology, and land rights.
Preliminary costs are $5.0 million.
Again, no project specific budget requests are made by NRCS for
Public Law 566. The Watershed Protection and Flood Prevention
Operations appropriation is allocated according to contributions to the
NRCS Strategic Plan, quality of plans and readiness of sponsors.
ewp funding to mississippi counties
Question. How much did NRCS allocate to the following Mississippi
counties with EWP funds appropriated for fiscal year 1997: Adams,
Alcorn, Clairbome, Covington, DeSoto, Forrest Grenade, Hinds, Holmes,
Itawamba, Jones, Leake, Lee, Lowndes, Madison, Monroe, Neshoba, Panola,
Perry, Pontotoc, Prentiss, Rankin, Tippah, Union, Warren and Yazoo. How
much is requested in the President's fiscal year 1998 budget for these
counties? What is the status of the emergency watershed needs for each
of these counties?
FIRST GROUP UNDER WATERSHED AND FLOOD PREVENTION OPERATIONS
------------------------------------------------------------------------
Fiscal year
1997 Status of
appropriation needs
------------------------------------------------------------------------
Adams................................... $5,463,000 $1,500,000
Alcorn.................................. .............. 300,000
Clairborne.............................. .............. 500,000
Covington............................... .............. 200,000
DeSoto.................................. .............. 1,000,000
Forrest................................. .............. 1,000,000
Grenada................................. .............. 600,000
Hinds................................... .............. 3,000,000
Holmes.................................. .............. 500,000
Itawamba................................ .............. 200,000
Jones................................... .............. 500,000
Leake................................... .............. 200,000
Lee..................................... .............. 1,500,000
Lowndes................................. .............. 200,000
Madison................................. .............. 5,000,000
Monroe.................................. .............. 200,000
Neshoba................................. .............. 500,000
Panola.................................. .............. 200,000
Perry................................... .............. 100,000
Pontotoc................................ .............. 200,000
Prentiss................................ .............. 200,000
Rankin.................................. .............. 1,500,000
Tippah.................................. .............. 200,000
Union................................... .............. 200,000
Warren.................................. .............. 300,000
Yazoo................................... .............. 200,000
-------------------------------
Total............................. 5,463,000 \1\ 20,000,000
------------------------------------------------------------------------
\1\ This need for $20 million for Emergency Watershed Protection funds
is a special authority within the President's request for Emergency
Supplemental Appropriations for fiscal year 1997. This authority would
allow NRCS to address damages in Mississippi from storms in 1991-94.
EWP funding requests are not a part of the fiscal year 1998 budget
process.
vermont projects
In the fiscal year 1997 appropriations bill the Committee
encouraged the Department to complete work on the following projects in
Vermont as funding allowed: Lower Otter and Dead Creek, Lemon Fair
River, lower Winooski River, lower LaMoille River, lower Black River,
and the Barton and Clyde River projects.
Question. What is the status and costs of each of these projects?
Answer. The Lower Otter and Dead Creek, Lemon Fair River, Lower
Winooski River, Lower LaMoille River, Lower Black River, and the Barton
and Clyde River projects received $425,000 in directed funds in fiscal
year 1997 for work on these projects. An additional $60,000 is needed
in fiscal year 1998 for completing them.
Question. How much is requested for each of these projects in the
President's fiscal year 1998 budget?
Answer. No specific projects were identified in the fiscal year
1998 budget request.
watershed planning
zuni river watershed
The Committee provided fiscal year 1997 funding of $300,000 for the
Zuni River watershed.
Question. What is the status of work on this project? What is the
timetable for completion of the project? What funding will be needed in
each fiscal year to complete this project?
Answer. The Zuni River Watershed Act (ZRWA) was passed by Congress
in August 1992 with the purpose of authorizing the development of a
plan for the management of natural and cultural resources within the
Zuni River Watershed and upstream from the Zuni Indian Reservation. An
advisory group of 22 different agencies, groups, and individuals was
formed to direct the development of a plan, A working group of eight
individuals was organized to provide detailed guidance. Ten technical
teams were formed to carry out the actual study. A full time
coordinator has been provided by NRCS.
Accomplishments in fiscal year 1996 include the completion of field
work by the Field Resource Inventory Team. This data became available
for the technical teams to begin evaluating the watershed and
developing recommendations. The field work by the Hydrology/Erosion
Team was completed. This information will be the basis for the erosion
assessment and recommendations. A field review by the Advisory
Committee was held and landowners interviews were carried out.
Question. How much is included in the fiscal year 1998 budget
request?
Answer. Plans for fiscal year 1997 are to complete the project and
issue the final plan in September 1997. A video is also planned for the
presentation of the report. However, no additional construction costs
were identified for the 1998 fiscal year.
little auglaize and piney creek watersheds
The Committee expressed its expectation that work continue on the
Little Auglaize watershed in Ohio and the Piney Creek Watershed in
Mississippi.
Question. What is the status of the work on these watersheds? What
is the timetable for completion of these projects? What funding will be
needed in each fiscal year to complete each project?
Answer. The Little Auglaize Watershed is authorized under the
Watershed Protection and Flood Control Act Public Law 566 for flood
control. The project received directed funds of $1.3 million in fiscal
year 1997 and is about 95 percent complete. At the present funding
levels and Ohio priorities, the project will be completed in fiscal
year 1999.
Piney Creek Project is a sub-watershed within the Yazoo Watershed
authorized by the Flood Control Act of 1944 (Public Law 534). Of the
total Yazoo allocation to Mississippi, Piney Creek received about
$200,000 and installed two structures in fiscal year 1996. Allocations
to the Yazoo are expected to continue at present levels with the Piney
Creek share determined by state priorities.
Question. How much is included in the fiscal year 1998 budget
request?
Answer. Again, no project specific budget requests are made by NRCS
for Public Law 566. The Watershed Protection and Flood Prevention
Operations appropriation is allocated according to contributions to the
NRCS Strategic Plan, quality of plans and readiness of sponsors.
technical assistance for gangland conservation
The Administration's request includes an increase of $4.1 million
for Conservation Technical Assistance for training for gangland
conservation and the improvement of conservation district skills.
Question. The budget states that the money requested will be
supplemented with up to $944,000, for a total of $5 million to train
NRCS staff. From which account does this supplemental money come?
Answer. The additional $944,000 that may be utilized to implement
the grazing lands training program will come from a variety of sources.
Conservation Technical Assistance funds can be used to support the
training if necessary. Additionally, funding may be leveraged with
those from federal, state and local partners to provide training to a
wider audience that would include representatives from federal, state,
and local governments, industry, private livestock producers and the
public. Participating partners may include the member organizations of
the National GULCH Steering Committee, Conservation Districts,
Universities, and others.
Question. How many full-time equivalent employees will be hired
with these additional funds?
Answer. The funds have not been requested to hire new federal
employees. However, approximately 1,000 employees will benefit from
this training. A majority of the training will be developed to include
a variety of partners, including university, extension, industry,
private grazing land owners and managers, as well as the public that
benefit from properly managed grazing lands.
digitization of the geographical information systems
The President's fiscal year 1998 request proposes an increase of
$10 million to accelerate the recent rate of acquisition of the digital
orthophotography maps and data digitization. The request states that an
increase from the base of $7.5 million would allow USDA to continue the
1997 initiative of providing the service centers with digital
orthophotography map and digitized soil survey data for completed soil
surveys for the entire United States in about 9-10 years.
Question. Should less than $10 million be available for this
function, how does one calculate the rate of digitization?
Answer. This money will be used to accelerate both soil survey
digitizing, and the production of digital orthophotography. However,
before the soils can be digitized, two significant business processes
which constitute two-thirds of the work involved to develop a digital
product must be completed. First, the older soil maps must be updated
and recompiled to fit the new accurate orthophoto base map. The updated
maps are quality controlled for accuracy and matching to adjoining
maps. Second, information about the soils such as descriptions and soil
correlations must be completed. The digitizing process itself is in
usually the least expensive and time consuming of the three major
business processes. The rate of digitizing alone is based on the
complexity of the individual soil survey areas. In areas where the soil
surveys are complex, mapping of the soils to the new digital
orthophotography base map and digitizing requires more time as compared
to areas where the patterns of soils and the detail on the maps are not
as complex. Based on our experience, the average cost to just digitize
a soil survey area is $20,300. If less than the $10 million is
available for digitizing soil surveys, fewer soil survey areas will be
digitized based on the cost for digitizing.
The rate of digital orthophotography production is calculated on a
single map basis, approximately $1,000 per digital orthophoto map. An
average county has approximately 70 maps for complete coverage, this
translates to an average of about $70,000 per county.
To ensure easy access to soils and natural resource information by
our customers and partners, the NRCS goal is to have the digital
orthophotography and digital soils data completed for the nations
private lands by the year 2002. This date matches the USDA target for
putting geographic information systems (GIS) in Field Service Centers
to improve business process efficiencies, reduce duplication and
improve customer satisfaction. If $10 million is made available, the
acquisition of digital orthophotography and the digitizing of soils
will be completed in year 2003. If the $10 million is not approved, the
acquisition of digital orthophotography and the soil digitizing will
not be completed on schedule.
Question. How will the work be accomplished without additional USDA
employees being added to the payroll if the $10 million increase
requested is provided?
Answer. The additional $10,000,000 being requested is to accelerate
the digitizing and acquisition of digital orthophotography initiative
started in fiscal year 1997. In fiscal year 1997, we are putting into
place an infrastructure of people and technology to provide quality
digitized soil surveys. Once this infrastructure is operational and the
staffs are sufficiently trained, our digitizing capacity will be
greater than it currently is. Taking advantage of this increased
production capacity will not require adding more people to the payroll
of NRCS. In addition, we plan to increase the amount of digitizing to
be contracted. Re-direction of staff already employed by the agency for
this accelerated initiative will provide more staff years to do this
work.
Digitizing the soil maps is only part of the work that has to be
done to provide a quality product as we transition the soil survey
program from one originally designed to produce hard-copy publications
to one that develops maps and related soil descriptions and
correlations into digital format. Having the maps and associated
resource data developed for use in an information system that is
accessible by the public allows many customers to produce their own
information without having the NRCS to do it all for them. Bringing
older soil survey information to up-to-date standards is a heavy
workload, but must be done to ensure that the maps and related data
match between differently soil surveys. This will take several years to
complete as the soil surveys that we call modern soil surveys have been
conducted over the last 50 years. With the changing needs of modern
customers, this has left us with a patch work quilt of soil surveys
across the nation. Some surveys meet current needs, however many do not
meet current standards. We estimate that about 20 percent of the soil
surveys are out of date, and need some form of updating to meet
customer expectations. This would be about 400 soil surveys. This
updating requires field mapping work, and associated quality assurance
checks to ensure our surveys meet the National Cooperative Soil Survey
quality standards.
No additional employees will be needed to acquire digital
orthophotography since the work is contracted to the private sector.
The US Geological Survey administers the digital orthophotography
contract, and staffing is already in place for this function. Digital
orthophotography is delivered to the NRCS in a form ready to use in a
GIS and for soil mapping and digitizing.
soil survey resource information
The fiscal year 1998 budget request proposed an increase of $5
million to fund 75 Full Time Equivalents (FTE) to prepare 2,400
completed soil surveys for digitizing and to provide information to
update soils data.
Question. Would this function be completed in fiscal year 1998? If
not, when will you expect to finish this function and how much more
money would you anticipate needing for those fiscal years beyond 1998?
Answer. The initiative for updating soils data in association with
the digitizing of soil survey areas was proposed for a 6 year project
funded at $5 million each year. Soil Survey information, like any other
kind of information, must meet the current needs of customers if it is
to remain useful. Soil Survey information is now available for about 94
percent of the nation's privately owned land and for about 76 percent
of the entire country. The soil surveys we call modern soil surveys
have been conducted over the last 50 years, and with the changing needs
of modern customers that has left us with a patch work quilt of soil
surveys across the nation. Some meeting current needs, some not. This
$5 million a year would be used to ensure critical data needed to
provide current interpretations would be available for those soil
surveys digitized. This would not however, do the entire job of bring
all soil surveys up to current standards
Question. Is the NRCS currently doing any soil surveys? If so, how
much money will be allocated for these surveys in fiscal year 1998? How
many will be completed in fiscal year 1998?
Answer. NRCS is currently conducting soil surveys in 640 areas that
have not been previously mapped, and is updating older soil surveys in
224 areas where the information is no longer adequate to meet current
customer needs. Assuming similar funding as we received in fiscal year
1997 we will allocate $76.4 million dollars to this initiative. Of that
approximately 25 percent or $19 million is used in providing soil
science expertise to assist the agency and our customers in the use of
soil information. The remainder is used for soil survey and the
associated support activities.
Approximately 50 to 55 soil surveys are completed each year.
technical assistance for resource conservation and development program
The fiscal year 1998 budget calls for an increase of $18 million
under the Resource Conservation and Development program to fund 400
non-federal watershed and rangeland coordinators in 25 states for high-
priority watersheds.
Question. Which are the 25 states that have high-priority
watersheds? Are these recently designated high-priority watersheds?
Answer. The states and the particular high-priority watersheds that
would benefit from the assignment of coordinators have not been
selected at this time. The selections of locations would be made by the
Deputy Chief for Programs and the state conservationists based upon
recommendations from the state technical committees, local leaders and
partners. The list would be developed once funding for the coordinators
was allocated.
environmental quality incentives program
The Department of Agriculture announced on March 19, 1997,
preliminary state funding allocation for the Environmental Quality
Incentives Program (EQIP). The Department allocated $170 million for
state priority areas. The remaining $30 million will be allocated to
the states when their final needs for technical, financial, and
educational assistance are determined.
Question. It is estimated that NRCS will award 5,143 contracts
costing approximately $170 million over fiscal years 1997 and 1998. How
did NRCS decide on this number of contracts and these costs?
Answer. NRCS conducted a workload analysis to estimate this
information. For the analysis, we assumed that $180 million would be
available each year for financial assistance in contracts and that 10
percent, or $20 million, of EQIP funds would be available for technical
assistance costs related to operating the EQIP program. The actual
technical assistance costs to carryout EQIP will be more than the $20
million. Using our experience in the Great Plains Conservation Program
and the Colorado River Salinity Control Program, which used long-term
contracts, we assumed that an average contract would cost about $35,000
based on about 40 percent of contracts would be at the $50,000 per
contract payment limit, and about 60 percent of contracts would average
$25,000 per contract. This results in 5,143 contracts per year.
Question. When do you think that the states' final needs will be
assessed? How will the Department assess these needs?
Answer. The final allocations will be made when the final rule is
effective. The preliminary funding information was distributed in March
so that state conservationists could make decisions as to the amount of
funds that are provided for significant state-wide natural resource
concerns and the amount that will be allocated to each priority area.
National guidance provides that at least 65 percent of the funds
allocated to the State must be allocated to priority areas. However,
the State conservationist, with the advice of the State Technical
Committee and concurrence of FSA, may allocate a higher percentage to
priority areas and less than 35 percent to significant state-wide
natural resource concerns. The state funding decisions will be shared
with the national office about April 7th. We will review them to ensure
that on the national level 50 percent of the funds are targeted to
natural resource concerns related to livestock production, and then
finalize allocations.
new world mine
Question. The Clinton Administration has offered $65 million to
Crown Butte Mines, Inc., in a cash deal to stop development of a
proposed mine near Yellowstone National Park. To offset the $65
million, the administration proposes deferring entry of 2 million acres
into the Conservation Reserve Program (CRP) from 1997 to 1998. I
understand this proposal will require legislative action. Is that
correct?
Answer. Yes, legislation will be necessary to complete the proposed
exchange of assets.
Question. Why did the Administration offer up CRP funds as an
offset?
Answer. Since protecting the New World Mine is an important natural
resource concern, it seemed appropriate to find an offset from another
Federal natural resource protection program. The offset proposed from
the CRP would provide the needed savings with limited impact on the
program.
Question. How will this impact the CRP?
Answer. The impact on the CRP will be minimal. There will be no
change in the maximum enrollment target for additional acreage for the
two years combined, fiscal years 1997 and 1998. The target is to enroll
28 million acres over this period of which the amount for fiscal year
1997 will still be at least a very ambitious 17 million acres. The
Administration's proposal will not reduce the amount of acreage
eventually eligible for the CRP and we still intend to enroll the same
36.4 acres by 2002.
Question. CRP unobligated balances are essential to fund technical
assistance for program needs in fiscal year 1997, fiscal year 1998 and
future years. Do you believe that this proposal will set a precedent by
the Administration as other PAYGO problems arise?
Answer. The Administration will have to address PAYGO problems as
they arise and will always seek the best alternative to address them.
We do not think this proposal will set a precedent as far as using the
CRP enrollment activity for fiscal year 1997 made this an attractive
alternative this year.
Question. How will it impact the funds required for CRP/WRP
technical assistance in future years?
Answer. It should not impact future technical assistance needs for
CRP/WRP in 1997 and 1998 since this will be funded through unobligated
1996 CRP funds. Technical assistance for the CRP and WRP are more
directly affected by the 1996 Farm Bill which amended Section 11 of the
CCC Act by limiting the total amount of CCC funds made available for
non-program payments to the total amount spent in 1995.
Question. Is it not true that the enrollment for CRP is
unpredictable because farmers are watching crop prices before they
decide how much land to enroll?
Answer. The number of farmers that will bid in any CRP sign-up is
unpredictable. Short-term and long-term consideration of prices is
certainly a factor. A high price scenario that farmers project may only
be temporary.
Question. What are the CRP enrollment projects in fiscal year 1998
and the outyears?
Answer. The fiscal year 1998 budget assumes the following
enrollment projects for CRP:
Acres
1998.................................................... 19,000,000
1999.................................................... 8,500,000
2000.................................................... 5,300,000
2001.................................................... 758,000
2002.................................................... 1,000,000
Question. What are the assumptions underlying these projections?
Answer. CRP enrollment is assumed to gradually increase to 36.4
million acres by 2002 which is the maximum enrollment level authorized
for this program. With 21.4 million acres scheduled to expire on
September 30, 1997, 4.8 million acres the following year and 3.4
million acres on September 30, 1999, it is not practical to expect full
replacement of all expiring acres during fiscal year 1997. Therefore,
at the time the budget estimates were completed, 19 million acres were
projected as the maximum amount likely to be replaced in 1997 with the
remaining expiring acres and additional acres needed to return to the
36.4 million acres occurring over several years.
Question. Please explain the PAYGO offset. How much would be saved
by delaying the sign-up of 2 million acres of farmland in the
Conservation Reserve Program from 1997 to 1998?
Answer. Legislation is required to authorize the use of royalties
under this proposal. A critical factor in being able to exchange the
royalties is compliance with the so called ``PAYGO'' requirements of
the Budget Enforcement Act of 1990 which requires legislation to be
budget neutral and to have no net impact on the Federal budget deficit.
The Administration estimates that deferring two million acres from the
current CRP sign-up for one year will save about $103 million over five
years.
Question. Would this be fiscal year 1998 savings?
Answer. These savings are projects over a five year period so a
portion would come in 1998.
Question. Why would it not increase the amount needed to reach your
CRP acreage target in fiscal year 1999?
Answer. The proposal only serves to postpone the sign-up of a small
portion of the projected acreage, not to reduce the size of the
program. The target of enrolling 28 million acres over the next two
years will not change.
plant materials centers
Question. Which of the 26 Plant Materials Centers have completed
their research? How many products has each center produced and what are
they?
Answer. None of the plant centers have completed their work. The
work of developing and transferring new plant technology for NRCS Field
Offices is an ongoing process which will continue to require new state-
of-the-art information to adequately meet emerging resource challenges.
The 1996 Farm Bill, for example, has a number of provisions and
technology needs which can best be met by information from the plant
materials program. Some of the technology needs are yet to be
developed.
Centers organize their work load into separate projects that are
comprised of individual studies addressing specific conservation needs.
At the present time there are approximately 500 active studies
receiving attention. As the objectives of individual studies are met,
the study is terminated and new ones are initiated. Projects are
undertaken to work on high priority needs, and a typical study takes 3-
4 years from its inception, to implementation, to transfer of
information at the current funding level.
Products from centers most commonly include: releases of new
materials; printed information on where, how, and when to use plants;
presentations to Field Office staff and land users; revisions of plant
science information in NRCS's Field Office Technical Guides; and new/
revised plant technical guides that evaluate critical land management
approaches. Products like these number in the hundreds annually on a
program-wide basis. On a per center basis, a ``typical'' number would
be 20 or more. There is some year-to-year variation depending on the
number of studies reaching completion.
Question. What products are currently in the pipeline?
Answer. The plant materials program is a diverse one with many
projects underway. Specifically, the program is developing plant
recommendations, technology, and products for: Farm Bill Programs such
as the Conservation Reserve Program (CRP), Environmental Quality
Incentives Program (EQIP), Wildlife Habitat Improvement Program (WHIP),
and Wetlands Reserve Program (WRP); critical habitats like wetlands,
riparian corridors, and disturbed areas; environmental concerns
relating to native plants, noxious/invasive plants, threatened and
endangered species; management practices including buffer strips, soil
bioengineering, waste management; and, program outreach efforts on
tribal issues and with limited resource farmers.
technical assistance
Question. In the fiscal year 1997 Committee report, the Department
was urged to implement CRP and the Wetlands Reserve program (WRP) in
their entirety, including technical assistance, through the Commodity
Credit Corporation (CCC) as authorized in the 1996 FAIR Act. You
indicated in your prepared testimony that the CCC reimbursement cap
prevents this. Why does it, when Section 341 of the FAIR Act directs
you to use CCC funds to ``carry out'' these programs?
Answer. Section 161 of the Federal Agriculture Improvement and
Reform Act of 1996 (the 1996 Act) amended Section 11 of the Commodity
Credit Corporation Charter Act to restrict the transfer of funds from
CCC to any agency of the Federal government, any State, the District of
Columbia, any territory or possession or any agencies thereof.
Transfers may not exceed the amount that was transferred in fiscal year
1995. This restriction was effective October 1, 1996. Section 341 of
the 1996 Act amended section 1241(a) of the Food Security Act of 1985
(the 1985 Act) to provide mandatory funding through the Commodity
Credit Corporation to carry out Conservation Reserve Program, Wetlands
Reserve Program and EQIP. While section 1241(a) authorizes use of CCC
funds, section 161 restricts the amount of CCC funds that can be used
by agencies to administer programs on behalf of CCC. The reference in
section 1241 of the 1985 Act is similar to other statutes that
authorize CCC to carryout specific functions. Similarly, the section 11
cap restricts the use of CCC funds under these other programs.
EQIP is exempt from the section 11 cap because section 1241(b)
specifically provides that ``Of the funds of the Commodity Credit
Corporation, the Secretary shall make available $130,000,000 for fiscal
year 1996, and $200,000,000 for each of fiscal years 1997 through 2002,
for providing technical assistance, cost-share payment, incentive
payments, and education under'' EQIP. The specific language in
subparagraph (b) provides authority to utilize CCC funds for EQIP
technical and educational assistance in amounts greater than specified
in section 11 of the CCC Charter Act.
environmental quality incentives program
Question. Many of the local conservation districts have written
regarding the use of Conservation Operations technical assistance funds
for technical assistance for the Environmental Quality Incentives
Program (EQIP).
Have Conservation Operations Technical Assistance funds been used
to provide technical assistance for EQIP? If so, why? What is the
percentage of this money that has been used?
Answer. In fiscal year 1996, NRCS had to utilize some conservation
operations technical assistance funds to implement EQIP or we would not
be able to administer the program in all States. For 1997, NRCS has not
yet used the $20 million, or 10 percent, of CCC funds approved by the
Office of Management and Budget for technical assistance. Discussions
about the total funding for technical assistance provided from the CCC
will continue with OMB as better information is developed. NRCS will
continue to analyze its conservation technical assistance program in
order to determine a more accurate estimate of how much is needed to
operate EQIP, other farm bill programs, and the ongoing conservation
assistance underway with Conservation Districts.
Question. What is the percentage of technical assistance from CCC
needed to provide adequate technical assistance for EQIP? What about
CRP?
Answer. NRCS estimates that at least 19 percent of EQIP funds are
needed for use in 1997 in providing technical assistance for producers.
The technical assistance needs will probably increase in subsequent
years. Early analysis indicates it is possible that higher technical
assistance needs may be required in future years because: EQIP
contracts are 5 to 10 year contracts--there will be engineering,
design, oversight, and follow-up activities by NRCS in each of the
years of the contract; and, some of the EQIP contracts will have
structural practices, such as animal waste facilities, waterways,
terraces, etc., which will require significant time commitment from
NRCS engineers and technicians for the design, building, and follow-up.
However, some of the conservation technical assistance program funds
will continue to subsidize the implementation of EQIP because the CCC
Charter language does not permit CCC funds to be used for equipment and
computers which are necessary to carryout the program.
NRCS and FSA have entered into an agreement concerning
reimbursement for the costs of providing technical assistance for CRP
that provides that NRCS will receive $77 per bid offered for fiscal
year 1997 and $456 per bid accepted into the program, if the land is
newly enrolled or requires a new conservation plan. In addition, NRCS
is beginning to tract actual time spent working on CRP so that in
future years reimbursement will be calculated based on actual time
spent. For fiscal year 1997, the reimbursement for NRCS technical
assistance for CRP will not be paid using CCC funds, but CRP
unobligated balances from the appropriated account.
wetlands reserve program technical assistance
Question. Under current law, reimbursement for NRCS technical
assistance for WRP is limited to available funds under the section 11
cap. The FAIR ACT amended the Commodity Credit Corporation Charter Act,
section 11, limiting the total amount of CCC funds made available for
reimbursement to the 1995 level, effecting reimbursement agreements of
all other Agencies competing for the limited funding source available.
In addition to the section 11 cap, the FAIR Act prevents the use of
reimbursable funds for purposes other than salary. CCC funds cannot be
used for supplies, equipment, transportation expenses, etc., thus these
funds will have to be absorbed through the Conservation Operations
Account.
What is the estimated amount of funds needed for those purposes not
covered by CCC funds?
Answer. The technical assistance funds needed for CCC conservation
programs affected by the section 11 cap are as follows.
Program Fiscal year 1998
Wetland Reserve Program................................. $18,200,000
Wildlife Habitat Incentives Program..................... 7,500,000
Conservation Farm Option................................ 3,750,000
Farmland Protection Program............................. 720,000
Conservation Reserve Program............................ 20,642,073
--------------------------------------------------------
____________________________________________________
Total............................................. 50,812,073
These funds, however, should be available in fiscal year 1998
assuming sufficient levels of unobligated 1996 CRP and WRP funds which
were appropriated and therefore not subject to the Section 11 cap.
Question. What unobligated funds will be used and what amount?
Answer. Unobligated WRP appropriations will be used to fund the
$18,200,000 needed for WRP. Unobligated CRP appropriations will be used
to fund the $20,642,073 needed for CRP and the $7,500,000 needed for
WHIP.
Question. Will appropriated funds be necessary? If so, how much?
Answer. For fiscal year 1998, the $3,750,000 needed for CFO and the
$720,000 needed to fund FPP are proposed to come from the section 11
cap. However, since CCC funds cannot be used for personal property.
NRCS will need to fund the purchase of such items from the conservation
operations technical assistance account. Approximately 27 percent of
the technical assistance costs normally are spent on personal property.
Therefore, we expect that approximately $200,000 would be needed to pay
the cost of doing business in the implementation of CFO and FPP in
fiscal year 1998.
watershed and flood prevention operations
Question. How many new projects do you anticipate approving in
fiscal year 1998?
Answer. We anticipate approving 7 new watersheds operation projects
in fiscal year 1998.
In your statement Mr. Under Secretary, you state that the fiscal
year 1998 budget request for Watershed and Flood Prevention Operations
is $40 million plus $60 million in Conservation Operations for
technical assistance.
Question. Why has NRCS moved technical assistance for water
resources from the Watershed and Flood Prevention Operations?
Answer. Technical Assistance for water resources has been moved
from the Watershed and Flood Prevention Operations to Conservation
Operations in an attempt to consolidate all technical assistance
activities except for the Resource Conservation and Development program
under one appropriation account.
Question. How will this impact the activities currently funded
under these functions?
Answer. This consolidation of technical assistance funds will not
impact the activities currently funded under these functions. The $60
million, which is approximately the current level, will be allocated to
states to be used for implementation of Watershed and Flood Prevention
Projects as is the current practice.
watershed and flood prevention language changes
Question. The NRCS request has changes to the appropriations
language. Please explain the rationale for each of the following:
language that makes funds available to high-priority projects; deletes
language for providing $15 million under Public Law 534 authority;
deletes language for the $200,000 for employment under the Organic Act
of 1944; and, language that allows up to $15 million to be used to
offer subsidized loans through the Rural Utilities Service or Rural
Business Cooperative Service.
Answer. As a result of a $881 million unfunded commitment and
limited funding to reduce that amount, NRCS plans to give priority and
fund those approved projects which have the highest net benefits.
Projects will be evaluated regionally and priorities established.
However, many projects have been waiting their turn for funding and
commitments made in the past will have to be honored.
Deletion of the $15 million under Public Law 78-534 represents a
combining of the funds for Public Law 83-566 and Public Law 78-534 into
a single line item which was proposed in the 1997 President's budget.
These programs are very similar in purpose, scope and procedures.
Combining of the fund allows us more flexibility to utilize the money
where the greatest need exists regardless of the program.
In the past loan money was available to sponsors through the
Farmer's Home Administration for loan under the Public Law 83-566
program. Because of high interest rates on the money, loans were rarely
made over the past 10 years. During the past two years or so no money
was provided to the Rural Development agencies for these loans. Under
the 1998 proposal, this program has a more attractive interest rate
because the funds would be used to buy down the interest rate that
sponsors would have to pay for their loans. The use of $15 million for
subsidized loans through the Rural Utilities Service or Rural Business
Cooperative Service is an attempt to revitalize the loan program, and
allow sponsors the option of borrowing funds at a reduced rate to more
quickly complete their projects.
Question. Will this loan from RUS or RBCS be used only for existing
Small Watershed Projects?
Answer. The appropriation and funding allocation is for Public Law
83-566, therefore, the Public Law 566 funds for subsidized loans
through RUS or RBCS could only be used for these small watershed
projects.
funding high priority public law 534 projects
Question. You suggest deleting language that provides for $15
million under Public Law 534 and shifts the funding of high-priority
projects under Public Law 566 authority. What would not be funded as a
result of this shift in funding?
Answer. The funding for projects in Public Law 534 and Public Law
566 will largely not change as a result of this shift in funding.
Deletion of the $15 million under Public Law 78-534 represents a
combining of the funds for Public Law 83-566 and Public Law 78-534
which was done in the 1997 appropriation language. These programs are
very similar in purpose, scope and procedures. Combining of the fund
allows us more flexibility to utilize the money where the greatest need
exists regardless of the program.
nrcs salaries and expenses
Mr. Under Secretary, you state in your testimony that since
December 1994 NRCS has been closing field offices and consolidating
services, and reducing staffers at headquarters.
Question. Please give the levels of staffing from 1994 to present
that have been cut at the field office level and the headquarters
operations.
Answer. We will provide a table showing the percentage of staffing
levels for NRCS locations.
NRCS STAFFING LEVELS (PERCENT)
------------------------------------------------------------------------
Fiscal year--
--------------------------------
1997 1996 1994
------------------------------------------------------------------------
National headquarters.................. \1\ 3 3 4
Field offices.......................... 77 75 72
State offices.......................... 15 17 22
Other.................................. 5 5 2
------------------------------------------------------------------------
\1\ In fiscal year 1996 staff for NHQ was 392, down from 536 in fiscal
year 1994, the fiscal year 1999 target is 258.
nrcs institutes
You also state that the establishment of 6 NRCS Institutes will
occur so that science and technology can be focused on.
Question. What are these institutes and where are they located?
Answer. Two new Institutes, the Wildlife Habitat Management
Institute and the Information Technology Institute, in addition to six
original Institutes, have now been established. The eight Institutes,
their mission, and their headquarters location will be provided.
eight nrcs institutes
1. Soil Quality Institute--Ames, Iowa. Mission is to provide
leadership in soil quality, build partnerships, and develop, acquire,
and transfer soil quality information and technology.
2. Wetland Science Institute--Laurel, Maryland. Mission is to
develop, adapt, and transfer science and technology to protect and
restore wetlands.
3. Social Science Institute--Greensboro, North Carolina. Mission is
to develop and transfer information, procedures, training, and guidance
related to the social and economic aspects of human behavior.
4. Natural Resources Inventory and Analysis Institute--Ames, Iowa.
Mission is to improve NRCS's potential to assess status, condition, and
trends of our Nation's natural and environmental resources.
5. Watershed Science Institute--Seattle, Washington. Mission is to
incorporate ecological principles into natural resource conservation
and accelerate development and transfer of watershed-based technology.
6. Grazing Lands Technology Institute--Fort Worth, Texas. Mission
is to acquire, develop, coordinate and transfer economically and
ecologically sound grazing lands technology.
7. Information Technology Institute--Fort Worth, Texas. Mission is
to explore, develop, and transfer the science and technology of state-
of-the-art automated processes and tools.
8. Wildlife Habitat Management Institute--Jackson, Mississippi.
Mission is to cooperate with conservation partners in acquiring,
developing, and transferring wildlife habitat restoration and
management technology.
nrcs national headquarters structure adjustments
Question. The Department approved on January 31, 1997, further
adjustments to the NRCS National Headquarters structure. What were
these further adjustments?
Answer. The goal of the NHQ reorganization was to realign and
restructure the current NHQ organization based on our reorganization
appraisals and the Blue Ribbon Report on National Resources Inventory
and Performance Management. The goal was not to reduce staffing levels,
but to ensure an optimum organization structure for the Agency. Every
employee has a position at the same grade level and in the same local
commuting area under the new structure. There are no changes to the
Agency's budget as a result of the reorganization. We will provide
highlights of the major functional changes for the record.
highlighted major functional changes
1. Establish a new Deputy Chief for Soil Survey and Resource
Assessment. This new deputy is responsible for all programs and
activities related to the collection of natural resource and soils
data, the assessment of natural resource status, natural resources
conditions and trends, policy analysis, and strategic planning.
2. Deputy Chief for Programs to better reflect the focus of the
Deputy Area. It established a Department of Agriculture Program
Outreach Division as a result of the transfer of the Secretary's
Section 2501 program from the Farm Service Agency to NRCS. Also
transferred to this division are the 1890 and Hispanic Association of
Colleges and Universities programs from the Deputy Chief for
Management. It established a Civil Rights Program Compliance Division
to align Title 6 responsibilities with program operations.
3. Name change from Deputy Chief for Soil Science and Resources
Assessment to Deputy Chief for Science and Technology to more
adequately align the Deputy Chief with the science and technology
consortium of divisions, institutes, and centers which the Deputy Chief
supervises.
4. Name change from Deputy Chief for Management and Strategic
Planning to Deputy Chief for Management due to the transfer of
strategic planning functions to the new Deputy Area. As the result of
the separation of Title 6 and 7 responsibilities, it established the
Civil Rights Employment Division to provide leadership for Title 7. The
old Information Resources Management Division is now called the
Information Technology Division to reflect a refocus on technology, and
the addition of the Chief Information Officer centralized leadership
and decision-making relative to information technology agency-wide.
workload shifts related to fair act
You state that the President's request for Conservation Operations
is increased from fiscal year 1997 because of uncontrollable costs from
inflation and pay costs, the cost to relocate NRCS operations to the
USDA Service Centers, and increased program responsibilities with the
implementation of the conservation programs of the FAIR Act.
Question. What workload shifts did NRCS encounter as a result of
the passage and implementation of the FAIR Act?
Answer. There are several steps that we have taken to manage the
increases in workload from the new conservation programs and the
possible shifts in workload relative to implementation of the 1996 Act,
including new AMTA contracts. In allocating fiscal year 1997 funds for
EQIP, a natural resource-based allocation formula was developed so the
allocation of funds could be primarily based on conservation needs.
The 15th sign-up for CRP has resulted in tremendous workload in
certain areas of the country. We are managing this workload by
detailing employees from surrounding areas to assist in completing the
sign-up activities. On a Regional level, the Regional Conservationists
are coordinating the need for detailees between States.
NRCS is attempting to manage the workload shifts resulting from
implementation of the 1996 Act conservation programs without a
precipitous shift in employees from any area of the country. We assume
that there may be a gradual shift to certain high workload areas as
programs are implemented.
relocation cost requirements
Question. What are the fiscal year 1997 relocation cost
requirements?
Answer. NRCS has not tracked the costs for USDA Service Center
implementation agency-wide which have been funded within the annual
funds available to the agency. However, the database on service centers
will be enhanced to capture this information.
small watershed operations
Question. What process is NRCS using to revisit all Public Law 566
plans to reduce the backlog of work? How many plans do you anticipate
will be revised?
Answer. NRCS recently completed a ``Backlog Review'' where every
active watershed project was examined by NRCS, local sponsors, and
stakeholders. The intent of the review was to work out those projects
and structural works of improvement which were economically or
environmentally unsound. As a result of that review, 131 supplements
were prepared deleting 1900 miles of channel work and 410 structures.
Seventy nine projects were declared completed. About one third of the
measures needing to be deleted remain in the plans. These will be
deleted in fiscal year 1997 through an estimated 69 supplements to the
original plans.
backlog of watershed projects
Question. What is the number and dollar amount of project backlogs?
How much is included in the fiscal year 1998 request to address this?
Answer. The backlog is presently estimated at $881 million for
Public Law 566. The fiscal year 1998 budget proposes $40.0 million be
used to reduce the backlog.
high priority flood prevention projects
Question. The 1998 budget proposal provides no additional funds for
flood prevention work under the authority of Public Law 534, but would
continue work on the remaining high priority projects that qualify for
funding under Public Law 566. Which high priority projects remain?
Answer. We have not developed a specific list of projects that
would remain, however, all active Public Law 534 projects contain sub-
basin with high priority projects. Priority will be determined by
Congressional language, states priorities, funding availability,
contribution to the NRCS Strategic Plan, and sponsor commitment.
information systems
On March 7, 1997, the Colorado Springs Gazette announced that the
National Systems and Research Company had won a $212 million, five-year
contract to upgrade computer and communication systems for FSA and
NRCS.
Question. Why was this contract awarded at this time? Did this not
fall under the Department's moratorium on the new information system
technology investments?
Answer. National Systems and Research Company is one of 6 vendors
awarded a contract under a competitive procurement by the Farm Services
Agency for a wide range of IRM support services.
The procurement resulted in the award of 6 indefinite delivery,
indefinite quantity contracts to separate vendors. The 212 million
dollars is the total amount of delegated procurement authority issued
to the FSA contracting officer for contracts. Each of the 6 contracts
has a minimum guarantee of $5,000 per year, and a maximum amount of
$43,240,000 per year.
When appropriate and approved, specific task orders are to be
competed among the 6 contractors. Task orders are subject to the
constraints of the current Department moratorium. The contracts may be
used for certain investments permitted by the moratorium, or by
moratorium waivers. The contracts may not be used for investments
prohibited by the moratorium. While it is in effect, the moratorium
will constrain the use of these contracts.
The contracts are expected to support maintenance of current NRCS
and FSA computing systems, and the development, deployment, and support
of new computing systems for service centers, administrative
convergence, and other initiatives under the auspices of the
departmentally coordinated technical architecture and approved agency
information system plans.
conservation operations
language to limit agreements with districts for training
Question. Under Conservation Operations, the fiscal year 1998
budget requests appropriations language to impose a funding limitation
of up to $5 million for agreements with conservation districts to
support training in rangeland conservation. Why is this funding
limitation requested?
Answer. This language provides funding limitation for agreements
with conservation districts to support training in rangeland
conservation.
emergency watershed protection funds
Mississippi has specific needs for funds in Mississippi that do not
qualify for the EWP. These funds are needed to repair damages resulting
from storms occurring in 1991 and 1993. The counties in Mississippi
effected were Alcorn, Hinds, Claibome, Madison, Rankin. Forrest, and
Yazoo.
Question. Will funding from the fiscal year 1997 Emergency
Supplemental be available for non-exigency needs?
Answer. These needs were not part of the President's Emergency
Supplemental request.
Question. Does this request place any emphasis on any long term
solution to the non-structural flood damages?
Answer. Long-term flood damage solutions are addressed under
Watershed Operations and Flood Prevention Program (Public Law 566 and
Public Law 534) planning and installation rather than under the
Emergency Watershed Protection Program. However, the 1996 Farm Bill
included flood plain easements as an eligible EWP measure. We will
investigate non-structural easement opportunities in Mississippi.
emergency measure funding needs in mississippi
Question. What are Mississippi's needs for any pending fiscal year
1997 EWP projects and what is the projected cost? What Mississippi
needs are outstanding from past fiscal years and what is the estimated
costs?
Answer. Mississippi pending fiscal year 1997 EWP current needs as a
recent of the March tornado and rains are for a total cost of $2.4
million. Outstanding requests for storm damage for 1991-94 are $20
million dollars.
Question. If funding for the special projects are received, can you
implement the projects in a timely manner?
Answer. The special projects for 1991-94 could be installed over a
three-year period.
demonstration erosion control (dec)
The Yazoo Basin Demonstration Erosion Control Project was
established in 1984. It authorized the Natural Resources Conservation
Service, U.S. Corps of Engineers and the Agricultural Research Service
to work jointly on a program to demonstrate on a watershed system basis
methods of reducing flooding, erosion, and sedimentation in 6 selected
watershed of the foothills area in the Yazoo Basin. Today the DEC area
has been increased to include 16 watersheds in the area. From fiscal
year 1985 until fiscal year 1992, the NRCS received direct funding for
this program.
Question. Was any Demonstration Erosion Control (DEC) funding
available for the NRCS in fiscal year 1997?
Answer. The initial funding for the DEC program was received in
fiscal year 1985 and the Congress earmarked $4,100,000 for continuation
of the joint NRCS-Corps of Engineers project begun in 1984 to alleviate
flood and drainage problems in the Yazoo River Basin. The NRCS has
received directed funding for the DEC watershed in the amounts of $4.1
million in fiscal year 1985; $5 million in fiscal year 1986; $5.4
million in fiscal year 1987; $5 million in fiscal year 1988; $5 million
in fiscal year 1989; $7 million in fiscal year 1990; $7 million in
fiscal year 1991 and $8 million in fiscal year 1992. No funding was
provided for NRCS for the Demonstration Erosion Control (DEC) in fiscal
year 1997.
Question. Has the NRCS acquired any money from the Corps of
Engineers for DEC funding in fiscal year 1993 through fiscal year 1997?
If not, why?
Answer. The Corps of Engineers provided NRCS funding for the DEC
project as follows: $115,000 in fiscal year 1993; $660,000 in fiscal
year 1994; $4,430,000 in fiscal year 1995; and $1,785,000 in fiscal
year 1996. No funding was provided by the Corps for NRCS funding of DEC
in fiscal year 1997.
sharkey series soils
The Committee is aware that a PEER-reviewed study has been
conducted which indicates that a significant percentage of Sharkey
Series Soils in Sharkey County, Mississippi, which have been previously
considered ``wet'', have now been determined to possess characteristics
as ``non-hydric soil''.
Question. I have been told that NRCS concurs with the findings of
the Sharkey Soils Studies initiated by Dr. David Pettry, a soil
scientist for Mississippi State University. Is this true?
Answer. Dr. Pettry and others published a bulletin in 1996
suggesting that the Sharkey soil as mapped in Mississippi was given an
incorrect taxonomic classification of Inceptisols, and that the correct
classification should be Vertisols. It was also suggested that the
Sharkey soil had been incorrectly designated as a Hydric Soil and that
that designation should be dropped.
At the time of the meeting with Dr. Pettry, the NRCS was aware of
the problems with the taxonomic placement of Sharkey soil into the
order of Inceptisols and was already in the process of reclassifying
the soils into the order of Vertisols, so yes, NRCS was in agreement
with Dr. Pettry on that issue.
The field study was to review the actual mapping of the soils
designated as Sharkey and to review their designation as Hydric soils.
This field study verified that there is a hydric component and a non-
hydric component within the Sharkey series as mapped, and that the
designation of Sharkey series as a Hydric soil in the list of ``Hydric
Soils of the United States'' should remain. On this issue therefore
NRCS differed with Dr. Pettry.
Question. Please provide an explanation of any existing or future
implications which Dr. Pettry's findings might reflect upon wetlands
regulations for purposes of Section 404 of the Clean Water Act,
Swampbuster provisions, or any other field and on-site determinations
carried out by USDA, the Corps of Engineers, or other federal agencies.
Answer. The implications of Dr. Pettry's findings on the taxonomic
placement of Sharkey soils into the Vertisol order are mostly academic
and important to soil scientists in having the proper concept of the
formation of the soil and its location on the landscape for mapping
purposes.
The implications of the designation of Sharkey soil as a Hydric
soil do not change since that designation is to remain the same.
What this study does point out is the continuing need to update
soil survey information as new uses and interpretations of that
information develop. The Sharkey soils have been mapped in many areas
and a soil survey published before there was such a designation as
Hydric Soil. Had that been an important concept at the time Sharkey
soil was being mapped in those areas, perhaps fewer inclusions of soils
with better drainage or poorer drainage would have been included in the
design of the mapping unit. However, this is not greatly significant
for the purposes of the wetlands regulations of Section 404 of the
Clean Water Act, Swampbuster provisions, or any other field and on-site
determinations carried out by USDA and others because the designation
of a wetland must be verified in the field. The Hydric soil designation
is only one indicator that an area may qualify as a wetland.
The 1990 Farm Bill defined a `wetland', except when such term is
part of the term `converted wetland', to mean land that ``has a
predominance of hydric soils; is inundated or saturated by surface or
ground water at a frequency and duration sufficient to support a
prevalence of hydrophytic vegetation typically adapted for life in
saturated soil conditions; and under normal circumstances does support
a prevalence of such vegetation''.
It is unlikely that any of the acres identified and delineated as
jurisdictional wetlands on non-agricultural lands in the Mississippi
Delta will not change as a result of this study.
wetlands reserve program
Question. Please describe the current relationship with the private
organization that was selected to support the implementation of the
Wetlands Reserve Program.
Answer. On January 19, 1996 the NRCS and the National Fish and
Wildlife Foundation entered into a cooperative agreement in furtherance
of the WRP effort. Under that agreement the Foundation was to receive
and match $5,000,000 of WRP funds and help identify and establish
ecologically sound and cost-effective easements. On February 7, 1997
the agreement period was extended to August 30, 1997 to provide the
Foundation with additional time in which to raise matching funds and
complete easement efforts with the program funds that were provided
under the original January 19, 1996 agreement.
private delivery of federal conservation programs
It is my understanding that the Department of Agriculture is
considering contracting out certain delivery activities associated with
one or all of the following federal conservation programs: the Wetlands
Reserve Program (WRP), Conservation Reserve Program (CRP), or the
Wildlife Habitat Incentives Program (WHIP). As I understand it, this
contracting would be to non-profit and state conservation agencies in
the name of ``partnerships''
As I understand it, the reason this new delivery system is being
developed is because of a lack of resources and staff to successfully
carry these out.
I realize this Committee instituted a pilot program two years ago
with the National Fish and Wildlife Foundation, a government-sponsored
entity, to implement the Wetlands Reserve Program. Now this is being
expanded to totally private organizations.
Question. The President's budget proposes the closure of
significant numbers of Farm Service Agency field offices. How can you
justify contracting out the delivery of federal programs at the same
time we are closing these offices?
Answer. The partnerships that NRCS is striving to establish do not
focus on type of administrative services that are available from the
Farm Service Agency. We are seeking to work with those entities with
unique special experience and proven ability in the implementation of
projects of the same type in the same local areas as NRCS is now
charged with implementing through the WRP. Entities that, based on
their years of experience and similar wetlands and wildlife
conservation mission, bring unique talents and independent resources to
the WRP are the focus of the effort (e.g., Ducks Unlimited, The Nature
Conservancy, Pheasants Forever, State Waterfowl Associations such as
the Wisconsin Waterfowl Association and the California Waterfowl
Association, and State Wildlife Agencies). Through this partnership
approach we believe that NRCS will be able to learn from and work
closely with those most skilled and knowledgeable and who are
established in the local areas involved. We also believe that the
project results achieved through such partnership efforts will achieve
the greatest ecological benefits in the most cost efficient manner and
of the most benefit to private landowner participants. The necessity of
increases in agency personnel will also be moderated by this
partnership effort.
Question. What protection is there to prevent these private
organizations from assisting their big contributors in enrolling land
in the government programs they are implementing?
Answer. WRP project recommendation is a direct function of the
State driven ranking process that is in place in each State. The State
Conservationist, with the advice of the State Technical Committee,
develops the ranking criteria by which all applications are to be
rated. The ecological merits of the restoration that could be expected
to occur on the site is the dominant consideration. Cost factors
associated with the site are the second major consideration.
Determination of all ecological measures of the value of the site for
restoration are under the ultimate control of the NRCS field
representative who conducts the field review of the application. Cost
factors are based on projected easement land values and engineering
restoration considerations. These also are the responsibility of the
local NRCS field representative and other NRCS specialists as may be
needed (e.g. engineering and soils assistance). Development and
administration of the prioritized ranking list is under the full
control of the NRCS State Office.
Question. Under what authority would these partnerships be entered
into?
Answer. Generally, the basic authorizing legislation for the Agency
as amended by the 1985, 1990, and 1996 Farm Bills and other legislation
provide the authority for NRCS to enter into partnership agreements.
The Soil Conservation and Domestic Allotment Act of 1935 (the Soil
Conservation Act), 16 U.S.C. 590a, provides authority for the Secretary
to cooperate or enter into agreements with, or to furnish financial or
other aid to, any agency, governmental or otherwise, or any person,
subject to such conditions as he may deem necessary, for the purposes
of this Act. The WRP final rule, promulgated under the authority of
both the Wetlands Reserve Program statute (16 U.S.C. 3837 et seq.) and
the Soil Conservation Act, states that the Department may enter into
cooperative agreements with Federal or State agencies, conservation
districts, and private conservation organizations to assist the
Department with educational efforts, easement management and
monitoring, and program implementation assistance. 7 CFR 146.2(f).
the conservation farm option program (cfo)
Question. The regulations have not been promulgated for the
Conservation Farm Option Program (CFO). When will the final regulations
be published?
Answer. We expect to publish the final rule in the Federal Register
by September 30, 1997.
Question. The President's request makes available $2 million in
fiscal year 1997 and $15 million in fiscal year 1998 for the purposes
of a CFO pilot program. In what areas is the pilot program being
implemented? On what assumption does NRCS base the estimation of the
number of contracts for fiscal year 1997 and 1998?
Answer. The information on specific pilot areas is not available at
this time. Proposals for participation in the fiscal year 1997 program
have not yet been received. However, an effort will be made to
distribute the program funding geographically as well as among the
producers of wheat, feed grains, cotton and rice.
The number of contracts are estimated using an average value of
$50,000 divided into the available funding for each fiscal year.
Question. How much do you estimate will be needed for each of
fiscal years 1999-2002?
Answer. Funding for each of those fiscal years is authorized by the
Federal Agriculture and Reform Act of 1996 as follows: fiscal year
1999, $25 million; fiscal year 2000, $37.5 million; fiscal year 2001,
$50 million and fiscal year 2002, $62.5 million.
______
Questions Submitted by Senator Bumpers
reimbursement for nrcs technical assistance
Question. I understand the Department has taken the position that
the 1996 Farm Bill has placed restrictions on section 11 transfers from
CCC even for programs that were converted from appropriated to direct
spending. I further understand that carryover funds from the CRP and
WRP accounts may be available for the costs of technical assistance in
fiscal year 1997 and perhaps fiscal year 1998.
To what extent will these carryover funds be available to meet the
demands of providing technical assistance for NRCS and related programs
in fiscal year 1998 and future years?
Answer. With respect to the WRP, the 1996 unobligated appropriated
funds available of approximately $31 million, are proposed to support
the NRCS technical assistance needs for WRP in the fiscal year 1997 and
fiscal year 1998 program sign-ups only. Of the $31 million available,
approximately $12.327 million will be used for NRCS technical
assistance supporting the 1997 WRP program sign-up to enroll 130,000
acres, and $18.200 million in support of technical assistance for 1998
to enroll 212,000 acres. The full $31 million requested for 1997 and
1998 are not available under the limited 1995 CCC spending level cap
enacted under the Federal Agriculture Improvement and Reform Act of
1996. A similar situation exists for the CRP where about $111 million
in 1996 unobligated appropriated funds will be available for technical
assistance in fiscal years 1997 and 1998.
Question. What plans do you have in the event these funds are
exhausted?
Answer. I would hope some joint effort between the Administration
and Congress could be reached to resolve this matter in the future, and
provide needed technical assistance funding in support of the WRP, and
other conservation programs now limited under the CCC section 11 cap.
The technical assistance funding level needs of the WRP presently are
not sustainable under the Conservation Operations account at the
current funding level without reducing conservation work being
conducted out of NRCS field offices. Technical assistance for the
implementation of conservation practices, in support of the vast
conservation issues facing this nation, are vital to the health of our
nations lands. I would hope resolve on this important key issue is
reached in the near future.
Question. How would the implementation of conservation programs
(mandatory and discretionary) be affected if this subcommittee would
limit funding for technical assistance to a baseline equal to previous
year discretionary spending for technical assistance?
Answer. The fiscal year 1998 Presidents budget proposes an increase
of $20,349,000 for the NRCS Conservation Technical Assistance account,
to support partial pay increases for 90 FTE's who will provide
technical assistance to approximately 9,000 farmers and ranchers who
own approximately 700,000 acres of land, developing soil survey data,
and enhancing the infrastructure of the base program to broaden skills
for delivery of the 1996 Farm Bill programs.
The NRCS technical staff are the cornerstone for the implementation
of the conservation programs, who develop the critical conservation
plans so needed for program delivery. In our efforts to reorganize the
agency, great efforts were made to sustain this critical work force,
comprised of natural resource science expertise and capable of
utilizing developments in new scientific technologies in the area of
natural resource sciences for the implementation of conservation
programs.
Setting a limit on technical assistance funding in fiscal year 1998
would effect NRCS training for rangelands and improvements of
conservation skills. NRCS technical assistance is utilized under a
voluntary partnership with landowners, and is the primary vehicle
through which needed improvements in the management, and establishing
the condition of private grazing land is achieved.
A limit would also inhibit growth towards enhancements of the
conservation districts skills which are needed to carry out the
delivery of the 1996 Farm Bill programs, through cooperative agreements
with professionals trained in the management of pasture lands, grazing
lands, forests, and rangelands to assist in local program delivery.
A limit would also effect Soil Survey data developed through
Geographic Information Systems. This natural resource science
technology is vital to the implementation of the 1996 Farm Bill
programs. Soil survey data is an important component of program
delivery, used by all resources to make critical land use decisions
that range from taxation and development to farming and natural
resource protection under a voluntary approach with landowners. GIS
provide orthophotographic maps of reference points needed to make
decisions on soils, farm field boundary's, rivers, roads, for the land
users. This technology is a vital tool for Service Centers in
addressing local landowner concerns.
CCC programs for fiscal year 1998 will also require an increased
workload from the NRCS technical staff responding to enacted
legislation for CRP, WRP EQIP, WHIP, CFO, and FPP. Technical assistance
funding for these programs other than WHIP, which is funded from CRP,
are all subject to CCC and its restrictions. After exhausting all
available funds to support technical assistance needs, NRCS would still
be faced with critical funding choices and the operation of the agency
in regards to program delivery of the new programs. The impact of a
change to this effect would be far reaching.
technical assistance for eqip
Question. I understand that you will provide an amount for
technical assistance equal to 10 percent of full EQIP funding to carry
out these program.
How do you justify that amount?
Answer. The 1997 apportionment provided by the Office of Management
and Budget authorized 10 percent of EQIP funds for technical
assistance. Initial workload estimates for EQIP were based on data
gathered for a 1995 evaluation of the conservation technical assistance
program. This data indicates that actual costs to operate EQIP could be
higher that the 10 percent now apportioned. NRCS realizes that
additional data is needed by OMB and have therefore begun a process to
develop a new work measurement and program accountability system. We
hope that these improvements will provide a better justification for
future technical assistance needs relating to EQIP, other farm bill
related programs, and ongoing conservation assistance with Conservation
Districts.
Question. Is it not true that historically a larger percentage of
funding was required for technical assistance related to these
programs?
Answer. Yes. In researching the level of technical assistance
required to implement EQIP, we completed an analysis of the technical
assistance provided in 1995 to the four programs which have been
replaced by EQIP. The analysis indicates that in 1995 the technical
assistance provided was 767 FTE's--or about $41.5 million--or 31
percent of the appropriated funds for ACP, CRSC, WQIP, and GPCP.
Question. What will be the effect on implementing these programs if
discretionary spending for technical assistance is not made available
for EQIP?
Answer. The impact of not receiving sufficient funds to provide
technical assistance for EQIP are numerous. Field offices will have
major delays in getting plans and engineering designs prepared for
producers. In addition, programs that have been historically delivered
through the Conservation partnership--that is conservation districts,
state conservation agencies, and NRCS--will be disrupted.
The presence of Federal technical assistance leveraged over $734
million dollars in state and local financial and technical assistance
in 1996. This is about six times the 1995 NRCS field office base
program expenditures. Another $37 million was leveraged through
assistance in implementing EPA's 319 program grants directed at
reducing nonpoint source pollution from agriculture. Without the NRCS
technical presence in the base program, other agencies would not be
able to ensure that their cost sharing programs are technically sound
and professionally accountable. Diversion of staff from activities
supporting local and state initiatives will result in reduced capacity
to implement state cost-share programs. The unintended consequence may
be that the new Federal programs could substitute for, rather than
augment, state and local initiatives.
Diverting staff from the base program reduces support critical to
natural resources inventories and assessments which are used in the
National Conservation Program, strategic planning, and budget
formulation and accountability.
As part of the locally-led conservation effort, NRCS assists
districts in helping individuals and communities with a broad range of
natural resource issues including urban conservation, wellhead
protection, irrigation management, and wildlife habitat improvement.
Some of these locally-based concerns will not be addressed if funds are
shifted away from support of the base conservation program. NRCS will
providing technical assistance to nearly 200 state and local programs.
A reduction in NRCS resources seriously impacts the success of the
local and state cost sharing programs.
Many socially disadvantaged farmers and ranchers do not participate
in cost-sharing or Federal loan or commodity program. The base program
meets a critical outreach need by assisting limited resource farmers
with solving their natural resource problems. Servicing this group
requires substantially more time and effort than servicing NRCS's
traditional customers. Reducing staff time allocated to base activities
may disproportionately weaken service provided to limited resource
farmers and ranchers.
The base program provides a network of well trained and technically
competent conservationists located in most counties who are able to
respond to emergencies. Recent examples of disaster assistance include
the 1993 Midwest flood, flooding in California and the Northwest, and
hurricane Hugo. The base program provides the foundation for the
agency's rapid and efficient response to emergencies. The Emergency
Conservation Program treated 927,000 acres in 1994, 874,000 acres in
1995, and 1,354,000 acres in 1996. The Emergency Watershed Program
obligated $123 million in 1994, $134 million in 1995, and $139 million
in 1996 to protect flood damaged natural resources. Much of the
Emergency Watershed work protects streambanks from erosion and restores
hydraulic conditions to pre-disaster conditions.
Development of conservation planning standards, technical guidance,
soil surveys, and natural resource information is a fundamental
function of the base program. This information is the foundation for
implementing EQIP, as well as the other Federal, state, and local cost-
sharing programs. As staffing is directed away from the base program,
the science-based credibility of the agency will erode and application
of conservation technology will vary from county to county since
national technical standards will not be available.
orthophotography
Question. Could you please provide an update on the progress of
NRCS's Orthophotography activities and the agency's relationship with
the GIS Center for Advanced Spatial Technology in Arkansas?
Answer. The NRCS, Farm Service Agency and the US Geological Survey
continue to cost share and partner with state and federal agencies in
the development of digital orthophotography base maps. At this time,
approximately 21 percent of the conterminous US is complete, and
another 27 percent is in-work. This is an overall increase of 15
percent in one year. In Arkansas, the NRCS, Farm Service Agency and the
USGS are cost sharing in the development of digital orthophotography
for seven counties in fiscal year 1997.
The interest in using digital orthophotography as a base map is
increasing as the use of Geographic Information Systems (GIS) becomes
more widespread. Digital orthophotography provides a rich source of
information for a GIS. The images are accurate, current and contain
more information than traditional data input such as line maps. With
the advent of Pentium chips and increased disk storage for computers,
digital imagery is now easily accessible. The NRCS has increased the
use of digital orthophotography for soil mapping, soil digitizing, and
as the base map for all natural resource information collected and
analyzed for decision making at the Field Service Centers.
The NRCS has an excellent relationship with the GIS Center for
Advanced Spatial Technology (CAST) in Arkansas. The NRCS State GIS
Specialist for Arkansas is headquartered at the CAST facility. The NRCS
GIS Specialist utilizes the GIS technology and staff expertise provided
by CAST to help NRCS implement GIS at the county Field Service Centers.
CAST provides 1/4 technical and administrative support to the NRCS GIS
Specialist.
Through a cooperative agreement with NRCS, the CAST also provides
NRCS professionals with training in GIS, remote sensing and Global
Positioning Systems (GPS). The NRCS provides direct funding to help
carry out this cooperative agreement. The CAST has developed GIS
software to allow NRCS to more easily input a variety of digital data
into our GIS for NRCS activities. The CAST is working with the
Washington County NRCS and Farm Service Agency (FSA), and the County
Assessor's office on a GIS project to reduce the time NRCS and FSA is
required to collect information about the location of a farm when a
landowner applies for USDA farm program assistance. When this project
is complete, the farmer could point on the digital orthophoto map
showing the location of his farm, and another database will provide
land ownership information about the property. The automatic linkage to
county records will reduce errors in manually filling out forms and
provide the information almost instantly. The CAST is using GIS and
remote sensing analysis tools to provide NRCS field service centers
with land use/land cover maps for our use in working with the Fish and
Wildlife Service in improving wildlife habitats.
east and central arkansas water resources
Question. Could you please provide an update on agency activities
in respect to the East Arkansas ground water study and the Bayou Meto,
Beouf/Tensas, and Kuhn Bayou (Point Remove) projects?
Answer. Efforts have continued with the implementation of on-farm
water conservation measures in critical ground water decline areas.
This is a 26-county area experiencing critical ground water decline and
saltwater intrusion problems. In 1997, 338 irrigation system plans were
developed, 260,000 feet of pipeline installed, 13,880 acres of land
leveled, 15,900 acres of tail water recovery systems installed, and
extensive monitoring and water quality samples taken.
Work has continued on the Bayou Meto, Boeuf/Tensas and Kuhn Bayou
projects in 1997 which was the third year of this effort at the
direction of Congress.
Specifically in Bayou Meto, the inventory work for the on-farm part
of the work is now complete and the report is being reviewed by the
sponsoring local organization. Public meetings to inform the public of
the results of these studies and the establishment of a hydrology data
base will be carried out during the remainder of this year. The Corps
of Engineers has been authorized to plan a flood control/irrigation
project in this area and NRCS will play a major role in that effort
with funding anticipated from the COE.
Boeuf/Tensas local sponsors continue to inform the public of the
water decline and water quality status. They are in the process of
organizing an irrigation district. NRCS is working on developing GIS
data for use in the study. Work is about 50 percent complete on this
project.
Kuhn Bayou is part of the Eastern Arkansas project and NRCS is
performing some of the survey and design functions for this project. A
natural resources conservation plan has been developed. The sponsors
are seeking funding sources for implementation.
The fiscal year 1998 budget request contains funds which could be
used for these projects.
cooperation with corps of engineers in the delta
Question. Would you provide your views on the willingness of USDA
to work cooperatively with the Corps of Engineers and state, local, and
private sources toward long-term solutions to water resource problems
in the state, especially in the Delta?
Answer. NRCS has been partnering with the COE in this area one
these projects since 1987. Also involved is the Arkansas Conservation
Agency. All three parties are dedicated to this effort and must
participate for it to be successful. NRCS is anxious for this
partnership to continue so as to help the landowners in this region
solve their problems.
______
Questions Submitted by Senator Kohl
wetlands reserve program
In the 1996 farm bill, the Wetland Reserve Program (WRP) was
reauthorized, with changes in the program that required new enrollments
to be divided between 3 categories. One-third of the acres enrolled are
to be for permanent easements, one-third for 30-year easements, and
one-third for 10-year contracts. However, subsequent to the WRP
reauthorization, the Conservation Reserve Program (CRP) has been
modified to allow cropped or prior-converted wetlands to be enrolled in
that program.
Question. Has the fact that cropped and converted wetlands are now
permitted to be enrolled in the CRP affected interest in the WRP ten-
year contracts? If so, would you recommend any change in the WRP
structure to avoid future duplication between the two programs?
Answer. Landowner interest in the restoration cost-share agreement
component of the WRP is very low. While the CRP enrollment of wetlands
may have a bearing on this situation, it is not clear if this is a
major factor or just one of many related factors. We believe these
programs compliment each other rather than duplicate efforts by
allowing landowners more options for the conservation of wetlands.
Question. Your testimony regarding the Wetland Reserve Program
(WRP) suggests that you are getting more demand for the permanent
easement enrollments than for the other types of enrollments (30-year
easements or 10-year contracts). Given this demand for the permanent
easements, do you believe that the program should be modified to better
reflect the demand?
Answer. Our demand for permanent easements is very heavy. The
demand for 30-year easements is moderate and the demand for restoration
cost share agreements is very light. We are attempting to enroll the
130,000 acres in fiscal year 1997 in the one-third permanent, one-third
30-year easement, and one-third restoration cost-share agreement as
provided for in the 1996 FAIRA Act. It is obvious that, based on
landowner interest, we are badly under funding permanent easements, are
pretty much on target on 30-year easements, and are placing far too
much emphasis on restoration cost-share agreements. To achieve the most
cost effective and ecologically sound restoration results, it would be
more practicable if the ratio were 45 percent permanent easement, 40
percent 30-year easement, and 15 percent restoration cost-share
agreement. Even though the restoration cost-share agreements are in
less demand than easements we do fully support having this as one of
our WRP options.
Question. In the Fiscal Year 1997 Agriculture Appropriations Act,
language was included to allow for the 130,000-acre enrollment cap for
the Wetland Reserve Program to be exceeded if non-federal cost share
funds were secured to pay for these additional enrollments. Can you
tell me whether this provision has been helpful to the WRP
implementation in fiscal year 1997? Do you have an estimate of how many
additional acres will have been enrolled in fiscal year 1997 as a
result of this provision? Would you recommend that the subcommittee
continue to include this provision in fiscal year 1998? Are there other
such modifications that you would find helpful in fiscal year 1998 in
implementing the WRP?
Answer. The opportunity to work with partners, receive non-Federal
contributions, and apply these contributions to acres above the 130,000
fiscal year 1997 acreage cap has been very helpful.
With the $8,089,700 of non-Federal contributions, we will
ultimately be able to enroll approximately 9,000 acres of additional
easements. Because these funds were largely associated with permanent
and 30-year easements we are able to apply them back to these types in
the same proportion as they were received.
We would definitely appreciate having this option continued in
fiscal year 1998. Perhaps of equal value to the actual funds that are
being received and the additional acres that are being enrolled is the
fact that this provision has attracted a lot of partner attention. With
their funding participation comes very beneficial expert assistance in
the many and varied aspects of wetland restoration. This partnership
relationship is making the on-the-ground results of even greater value
to the involved landowners and the national wetland conservation
purpose as well.
It would be beneficial to the WRP and would allow us to be more
responsive to the tremendous level of landowner interest if the acres
that are enrolled in response to the level of non-Federal contribution
could be considered outside of the fiscal year 1998 acreage cap and the
overall program cap as well. An indication from the Congress that the
relative proportion of acres in each of the three categories of WRP
land should more nearly match the level of landowner interest in each
category would also be very helpful. In order to assist us in our
efforts to work with the many non-governmental conservation partners
and to enable us to enlist their support in the WRP effort, the
specific provision of authority for the use of CCC funds in conjunction
with such partnership agreements is needed.
______
Questions Submitted by Senator Leahy
allocation of eqip funds
Question. Last week NRCS allocated a majority of the fiscal year
1997 funds for financial assistance. Even though 50 percent of these
funds are intended for assistance to livestock operations, my state,
which is almost 90 percent livestock, received less than the two-year
average NRCS used as a base. How do the criteria in the formula used by
NRCS to allocate the EQIP funds account for livestock and what weight
do these criteria have on the overall formula?
Answer. We will provide a table sets forth each of the 26 elements
that we used in the 1997 allocation formula, it also shows the weight
that was assigned to each factor and whether the factor is considered
to affect livestock. This formula is used to determine the basic
percentage of the EQIP funds that each state should receive. As you can
see in the weights assigned to each of the factors, that the livestock
factors are assigned 50.2 percent of the total weight.
The basic amount determined by the formula was adjusted so that no
state would receive a dramatic increase or decrease in conservation
assistance funds which might negatively impact their ability to manage
or deliver the program. A historical funding level was used to limit
major shifts. The average amount received in a state for fiscal year
1994 and 1995 for the ACP, WQIP, GPCP, and CRSCP was used to establish
the historical level.
ELEMENTS OF ALLOCATIONS FORMULA
----------------------------------------------------------------------------------------------------------------
Total weight (percent)--
Element Measurement Source -------------------------
Livestock Nonlivestock
----------------------------------------------------------------------------------------------------------------
Cropland............................ Acres.................. NRI.................... .......... 5.9
Cropland eroding above T............ Acres.................. NRI.................... .......... 6.4
Irrigated cropland.................. Acres.................. NRI.................... .......... 4.4
Land in specialty crops............. Acres.................. NRI.................... .......... 3.2
Grazing and (non-Federal)........... Acres.................. NRI.................... 3.3 ............
Grazing land (Federal).............. Acres.................. Census................. 0.7 ............
Rangeland in fair and poor condition Acres.................. NRI.................... 4.2 ............
Pastureland needing treatment....... Acres.................. NRI.................... 4.2 ............
Forestland.......................... Acres.................. NRI.................... .......... 2.2
Forestland eroding above T.......... Acres.................. NRI.................... .......... 3.6
Wetlands............................ Acres.................. NRI.................... 2.9 2.9
Riparian areas...................... Acres.................. NRI.................... 2.15 2.15
Coastal zone land................... Acres.................. NOAA................... 1.75 1.75
Land subject to flooding............ Acres.................. NRI.................... .......... 2.4
Ground water vulnerability Index.................. USDA................... 2.6 2.6
(nutrients and pesticides).
Land with saline and alkaline soil Acres.................. NRI.................... .......... 2.7
problems.
Impaired rivers and streams......... Miles.................. EPA.................... 2.4 2.4
Water bodies........................ Acres.................. NRI.................... 1.3 1.3
Other land on farms/ranches......... Acres.................. NRI.................... .......... 2.5
Livestock........................... Animal units........... Census................. 3.3 ............
Animal waste........................ Tons................... Census................. 5.2 ............
Animal waste management system Average capital cost... EPA.................... 6.4 ............
capital cost.
Animal waste disposal............... Animal units/cropland Census and NRI......... 6.4 ............
acres.
Farms and ranches................... Number................. Census................. 1.95 1.95
Indian tribal land.................. Acres.................. BIA.................... 0.8 0.8
Limited resource producers.......... Number................. Census................. 0.75 0.75
---------------------------------------------------------------------------
Total......................... ....................... ....................... 50.2 49.8
----------------------------------------------------------------------------------------------------------------
priority distribution of eqip funds
Question. In allocating EQIP funds, NRCS placed a priority in the
first year on capitalizing on the experience of those States that had a
successful relationship with the State agriculture program, a solid
reputation for assisting farmers to improve their conservation
practices and a commitment by the State to contribute to the cost-share
program. I'm certain that lake Champlain and Memphremagog must have
ranked high under these criteria and I know you're familiar with the
commitment of farmers in these watersheds and the capability of the
NRCS staff in Vermont. But, I would imagine that many of the States
receiving large increases in the fiscal year 97 allocation may not be
able to use all of their allocation. Would you agree that when that
occurs, funds should be redistributed to States that have the
previously mentioned attributes? Would you also agree that States that
can show a considerable interest, even a list of farmers who want to
participate in EQIP should receive a higher allocation of those
remaining funds?
Answer. Yes, we intend to monitor the obligation of funds in each
State throughout the summer and will redistribute funds to ensure that
all 1997 EQIP funds are obligated before the end of the fiscal year.
States that can show that they have producers ready to enroll will be
able to receive additional allocations to the extent that funds are
available.
limitation on percentage increase in eqip by state
Question. Finally, when you allocated this year's funds, you placed
a 30 percent cap on the increase any one State could receive over the
previous year. I can understand why that cap would be placed on States
receiving a large allocation because it may dramatically increase the
workload. But I would think that this cap is not necessary for smaller
States because even 50 percent increase would be very manageable. Is
the cap necessary for small States and does NRCS believe it could be a
negative incentive for programs to expand as much as possible in the
next year?
Answer. We believe that the 30 percent cap is necessary in large,
as well as small States. Small States may actually have more difficulty
handling a rapid increase in funds than a larger State because a small
State does not have the depth of resources in all specialized technical
fields that are needed to implement a program such as EQIP. Large
States usually have on staff more than one employee with technical
expertise, such as engineer, biologist, or economist. In smaller
States, often employees with specialized expertise are shared with
another State. Large increases in workload, without more than one
employee to complete the task could result in a State having difficulty
in managing the program. We will be evaluating the implementation of
the program in all States during 1997 and will use the feed-back we
receive from both large and small States to evaluate whether the cap
was set at an appropriate level and whether the cap was appropriate for
both large and small States.
increased scope of crp, wrp, and eqip
Question. As CRP, WRP, and EQIP expand their scope, there will be
an increased demand for technical assistance from NRCS. Assuming the
Department does not increase staff to meet this demand, has the
Department considered developing partnerships with non-profit
organizations that can offer similar or complementary services, such as
the Sustainable Agriculture Research and Education or the Appropriate
Technology Transfer for Rural Areas programs?
Answer. The Department is evaluating all legal opportunities to
expand our partnerships to improve the implementation of conservation
programs in the field. One of the opportunities that we have been
researching is to increase partnerships with non-profit groups so that
program participants can benefit from the specialized expertise that
may be available within a non-profit group.
conservation farm option
Question. During the drafting of the Farm bill, we all recognized
the need to insure that the various conservation programs are
complementary and can be used by farmers as a ``toolbox'' of
conservation assistance. The Conservation Farm Option was intended to
help meet this goal. I see in your fiscal year 98 request that you are
going to begin implementation of the program in pilot areas. What type
of areas are you looking for to launch these program pilots?
Answer. Areas where there are diversified and well manifested and
documented natural resource problems would be suitable pilot areas.
Such areas that have a high number of eligible producers that are
willing to participate in the CFO program would be high priority areas.
This would provide the opportunity to plan and implement a variety of
innovative practices, combine several of our traditional programs and
have high probability of achieving measurable results. However, an
effort will be made to distribute the program funding geographically as
well as among the producers of wheat, feed grains, cotton and rice.
american heritage rivers initiative
Question. When the President announced the American Heritage Rivers
initiative it was stated that some of the funding would come through
NRCS conservation programs. What is the NRCS involvement in developing
the guidelines for this initiative? How does NRCS plan to re-focus its
programs for the rivers that are designated?
Answer. NRCS has a representative and alternate on the working
group developing guidelines for the American Heritage Rivers
initiative. The mechanism has not been established for focusing federal
services on designated rivers.
farmland protection program
Question. The Farmland Protection Program, and its predecessor
Farms for the Future, has been highly successful in Vermont. How many
farms have the program helped purchase easements on? How many did the
new program assist with fiscal year 1997 funds? What is the estimated
need for this program?
Answer. When easement acquisitions are completed, the Farmland
Protection Program will acquire contingent remainder rights on
approximately 203 farms. For fiscal year 1997, $2 million was approved
by the Congress. We are currently in the process of making
recommendations to the Secretary of Agriculture to implement the
program for this year. We will find out how many that the program may
assist in 1997 when allocation of funds is completed. The need of
Federal funds for this program in the immediate future is estimated at
$460 million based on the current pending offers that the State and
local government entities have.
wetlands reserve program technical assistance
Question. In 1998, the Wetlands Reserve Program estimated to have a
program increase of $44,885,000. Assuming a resulting increased demand
for technical assistance that NRCS is now unable to address through
program funds, how will NRCS meet this increased demand over the long-
term? What is the projected need for this assistance over the next five
years? How does this technical assistance lower the cost to the farmer
in enrolling land in the WRP?
Answer. The NRCS has no access to Commodity Credit Corporation
funds (CCC) for agency WRP technical assistance funding needs in fiscal
years 1997 or 1998. Consequently, the WRP technical assistance need for
fiscal years 1997 and 1998 will be covered through the use of 1996
prior year appropriated unobligated WRP funds that were initially
scheduled to be utilized in the purchase of 1996 WRP easements.
Approximately $31,000,000 of such prior year funds will be utilized. To
enable us to honor and complete these 1996 easement commitments we will
in turn utilize Commodity Credit Corporation Funds of approximately $31
million. Only through this switching of funds was the agency able to
find a way to fund technical assistance needs for fiscal years 1997 and
the projected technical assistance need associated with the
Administration's 1998 budget request. In the longer term, it will be
necessary for NRCS to be able to utilize CCC funds to cover WRP
technical assistance needs, since prior year appropriated WRP funds
will not be available in fiscal year 1999 and beyond.
Excluding fiscal years 1997 and 1998, since prior year WRP
appropriated funds are available for technical assistance needs for
these years, the WRP technical assistance funding need through fiscal
year 2002 will be approximately $38,188,000.
Technical assistance funding is required if the agency is to
provide landowner's who wish to enroll in the WRP with that
opportunity. Such funding also provides landowners with assistance in
achieving the most cost effective restoration results, thus lowering
the cost of the restoration effort by minimizing the likelihood that
restoration actions will fail and need to be subsequently reinstalled
The assistance also enables landowners to receive help in monitoring
their restoration results and the terms and conditions of their
easement commitments so as to achieve the optimum wetland restoration
and protection benefits from the WRP.
watershed sciences institute
Question. I am pleased that Vermont is a part of the NRCS Watershed
Sciences Institute. What is the current status of the Institute and
what future activities are planned?
Answer. The Watershed Sciences Institute is one of eight
functioning National Institutes in NRCS. Its mission is ``To
incorporate ecological principles into natural resource conservation
and accelerate the development and transfer of appropriate technology
in response to comprehensive watershed needs and environmental
sustainability at the watershed and landscape scales.'' The Institute
is acquiring and developing technologies such as those associated with
resource management and planning on a watershed scale; functional
restoration of streams and associated riparian areas; evaluation and
management of agricultural nonpoint source runoff and waterborne
pollutants; and agricultural sustainability.
Subcommittee Recess
Senator Cochran. Our next hearing will be on Tuesday, April
8, at 10 a.m., in room 124 of the Dirksen Senate Office
Building. At that time, we will review the budget request for
the Department's farm and foreign agricultural services.
The subcommittee stands in recess.
[Whereupon, at 11:20 a.m., Tuesday, March 18, the
subcommittee was recessed, to reconvene at 10:10 a.m., April
8.]
AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR
FISCAL YEAR 1998
----------
TUESDAY, APRIL 8, 1997
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:10 a.m., in room SD-124, Dirksen
Senate Office Building, Hon. Thad Cochran (chairman) presiding.
Present: Senators Cochran, Burns, Bumpers, and Kohl.
DEPARTMENT OF AGRICULTURE
STATEMENT OF DALLAS R. SMITH, ACTING UNDER SECRETARY,
FARM AND FOREIGN AGRICULTURAL SERVICES
ACCOMPANIED BY:
CHRISTOPHER E. GOLDTHWAIT, GENERAL SALES MANAGER
DENNIS KAPLAN, DEPUTY DIRECTOR, OFFICE OF BUDGET AND PROGRAM
ANALYSIS, DEPARTMENT OF AGRICULTURE
Farm Service Agency
STATEMENT OF BRUCE R. WEBER, ACTING ADMINISTRATOR
Foreign Agricultural Service
STATEMENT OF AUGUST SCHUMACHER, ADMINISTRATOR
Risk Management Agency
STATEMENT OF KENNETH D. ACKERMAN, ADMINISTRATOR
Opening Remarks
Senator Cochran. The subcommittee will please come to
order.
This morning we continue our hearings, reviewing the
President's budget request for fiscal year 1998, as it relates
to agriculture, rural development, and related agencies. This
morning we will specifically review the budget request of the
Farm Service Agency, the Foreign Agricultural Service, and the
Risk Management Agency.
Our witness list this morning includes Dallas Smith, who is
Acting Under Secretary for Farm and Foreign Agricultural
Services; Bruce Weber, Acting Administrator for the Farm
Service Agency; August Schumacher, Administrator for the
Foreign Agricultural Service; Christopher Goldthwait, General
Sales Manager; Kenneth Ackerman, Administrator for the Risk
Management Agency; and Dennis Kaplan, with the Department's
Office of Budget and Program Analysis.
We have received your written statements, which we
appreciate very much. We will make them all a part of the
record in full, and we encourage you to proceed to summarize
those statements, if you like, and make whatever comments you
think would be helpful to our understanding of this budget
request. We will then have an opportunity to discuss your
comments and ask questions.
Prepared Statement
We have a prepared statement from Senator Bumpers, and it
will be made part of the record.
[The statement follows:]
Prepared Statement of Senator Bumpers
Mr. Chairman: Thank you and welcome to all our guests
today.
To the average American, the term ``Department of
Agriculture'' is likely to suggest images of farmers tilling
the soil and moving their products to feed a hungry world. We
all know that the Department of Agriculture is much more than
that simple pastoral symbol. The Department of Agriculture of
today includes a vast research capability, marketing and
inspection, food safety, conservation, rural development, food
and nutrition assistance, and much, much more. But of all the
panels that will appear before this subcommittee, none better
than this represents the traditional, perhaps stereotypical,
client of the Department of Agriculture, the American farmer.
Although the goal of the American farmer at the time the
Department of Agriculture was created has little changed, the
means by which he meets that goal today would not even be
recognizable to the farmer of the 1860's. The farmer of 130
years ago had much of a continent yet to settle in which new
fertile lands reached to the horizon and natural resources
seemed ever abundant. With the closing of the frontier came a
realization that we needed to better manage our finite
resources and a role of government was created to help the
farmer accomplish his task. From region to region, farming
practices and structure might vary, but a constant champion and
protector of the farmer has been the USDA.
Nuances to that farmer/government relationship are ever
changing and last year has witnessed some of the greatest
changes in a generation. I fear that too many of us have lost
the memory of farm economies gone awry, leaving the nation in a
wrenching depression. I fear for the worst and hope for the
best.
Our national economy is strongly founded on the principle
of free enterprise. So it may seem strange to some that for so
long agriculture, the mainstay of the American economy, was
tied to a system of production controls and price supports. The
American farmer is a small individual producer playing to a
global market. He represents one of the very few, perhaps the
only, member of our economy who buys his inputs retail and
sells his products wholesale. The farmer is virtually unable to
pass any of his costs on to anyone else and his livelihood,
sometimes his very life, is often held in the balance by the
forces of nature. If we feel that abundant food is an important
resource of our society, and I believe we do, then it is
understandable that society has a stake in the well-being of
the American farmer.
Today we will hear from the agencies responsible for
delivery of government services to the farmer on the farm and
in the development and maintenance of foreign markets. With the
changes of the past few years, exports opportunities are more
important than ever. With the changes of last year, new
challenges face the farmers in the countryside and the changing
face of USDA is yet to finish this transformation. Risk
management may become the new by-word for our new farmer/
government relationship. Certainly, with the loss of programs
farmers have relied on for a generation, much is at risk.
Under Secretary's Opening Statement
Senator Cochran. Mr. Smith, you may proceed.
Mr. Smith. Thank you, Mr. Chairman, Senator Burns.
I am pleased to have this opportunity to discuss the 1998
budget and program proposals for the Farm and Foreign
Agricultural Services mission area of USDA. You have already
introduced the Administrators and also our representative from
the budget office at USDA. Statements by the Administrators
have also been submitted for inclusion in the record. I will
summarize my own prepared statement, after which we will be
pleased to respond to your questions.
Mr. Chairman, a fundamental goal of the Farm and Foreign
Agricultural Services mission area is to secure the long-term
economic vitality and global competitiveness of American
agriculture by expanding trade and economic opportunities, and
promoting income growth and development throughout rural
America. We are the production agriculture mission area at
USDA. How we accomplish our mission will, in large part, be
determined by the new policies set in place by the 1996 farm
bill. And one of our primary tasks this past year has been to
implement the policy and program changes provided in that act.
As a result of our efforts, nearly 99 percent of eligible
acres were entered into production flexibility contracts last
year. Although the new farm bill has provided much greater
flexibility to our farmers in their production and marketing
decisions, it has also increased the risk inherent in farming
by reducing the Federal Government's role in supporting income
and managing supplies.
Consequently, we remain concerned about the adequacy of the
safety net for our producers and have been working diligently
to expand and improve programs which help producers manage
their price and production risk. At the same time, we have
continued our efforts to reduce expenses, improve efficiency,
and deliver responsive, quality service to our farm and rural
customers.
The Farm Service Agency [FSA] is a major part of our
mission area. The Farm Service Agency administers the farm
credit programs, several conservation programs, and the
domestic commodity price and income support programs of the
Commodity Credit Corporation.
The farm credit programs administered by FSA continue to
serve as a vital source of credit for our Nation's farmers and
ranchers. The budget continues the trend toward emphasizing
guaranteed loans, which are made in partnership with private
lenders and have a low subsidy cost for the taxpayers. We
remain responsive, however, to the continued need for direct
loans, which are targeted to beginning farmers and members of
socially disadvantaged groups who show promise for success but
would be unable to obtain credit elsewhere.
The Conservation Reserve Program is the major conservation
program administered by FSA. The 1996 farm bill reauthorized
the CRP, set maximum enrollment at 36.4 million acres, and
switched the program's financing from direct appropriations to
CCC funding. The 1998 budget assumes that a competitive bid
process will be used to enroll nearly 19 million acres of new
and expiring CRP contract acreage in 1997. Enrollments in
subsequent years are assumed to gradually increase total
enrollment to 36.4 million acres by the year 2002.
Signup for CRP regular enrollment was held March 3 through
March 28. Preliminary results from the field indicate that
landowners submitted nearly 302,000 offers to enroll almost 26
million acres, of which about 18 million acres are currently
under contracts that expire at the end of September.
With technical assistance from the Natural Resources
Conservation Service, FSA will undertake the voluminous task of
evaluating the environmental benefits of all offers and, by
mid-June, will notify producers as to which acres have been
accepted in the program. Continuous signup is also in place for
certain high-priority practices involving small acreages, such
as riparian buffers, filter strips, and windbreaks.
The budget also reflects provisions of the 1996 farm bill
authorizing CCC funding for a number of new conservation
programs, including the Environmental Quality Incentives
Program, which replaces the Agricultural Conservation Program
[ACP]. EQIP is administered by the Natural Resources
Conservation Service, in cooperation with the Farm Service
Agency.
Reflecting the trend for Federal outlays for farm price and
income support programs, total CCC outlays have declined from
the 1986 peak of $26 billion to $4.6 billion in 1996. This is
the first time CCC outlays have dropped below the $5 billion
mark since 1981.
Including conservation programs and other programs for
which CCC funding was authorized by the 1996 farm bill, CCC
outlays are projected to total $7.8 billion in 1997, and $9.9
billion in 1998, and decline to about $7.6 billion by the year
2002.
Changes made by the 1996 farm bill have diminished the
traditional role of the farm programs as a buffer against
fluctuations in production and commodity prices. Our greatest
challenge is to find new ways to help farmers thrive in an
increasingly risky environment and yet not be involved in the
micromanagement of agricultural decisions.
The budget reflects legislation that we will be proposing
to the authorizing committees to improve the safety net for
farmers. Our legislation provides discretionary authority to
extend commodity loans for 6 months during periods of depressed
market prices or market disruptions, allows managed haying and
grazing of CRP acreage, increases fruit and vegetable planting
flexibility for acreage enrolled in the production flexibility
contracts, and provides for greater flexibility in the timing
of contract payments.
For the salaries and expenses of the Farm Service Agency,
we are requesting a total appropriated level of $954 million, a
net decrease of $1.9 million from 1997. Our staffing reductions
for 1998 continue to run well ahead of those projected in the
Department's reorganization plan. The 1998 budget calls for
staffing levels of about 5,900 Federal staff-years and 9,900
non-Federal county office staff-years--reductions of about 270
and 1,850 staff-years, respectively, from the 1997 levels. We
expect to achieve this reduction through a combination of about
530 buyouts and a reduction in force of about 1,600 staff-
years.
In addition, as part of the Department's streamlining
initiative and reflecting changes made by the farm bill, the
budget projects that 500 Farm Service Agency offices will be
closed by the end of 1999. This issue of office closures is a
very sensitive topic, and I want to take a moment here to put
the issue in an appropriate context.
First of all, although there have been many stories out in
the States--and I know that many of you have heard from your
constituents on this--the Secretary has not yet approved any
plan for how the closures might be accomplished. Moreover, he
has made it clear there will be no further office closures at
this time beyond a few remaining closures that have been
planned for some time in order to reach our original goal of
about 2,500 service centers.
Second, the Secretary has asked each of the involved
agencies, including the Farm Service Agency as well as the USDA
Service Center Implementation Team, to give their best advice
as to how we can organize within the budget levels. As you
know, the service center approach means that the number of
offices open for our customers relates to the budgets of other
agencies in addition to the Farm Service Agency.
Third, as USDA develops its approach to meeting the budget
requirements over time, it will do so in close consultation
with those that would be most affected.
In short, while we have made a general commitment that we
will reduce the number of our service centers, we have made no
decisions about individual offices. We are committed to working
with the Congress as we proceed with our review, and will keep
you fully apprised of our planning.
The Risk Management Agency [RMA] is also a very important
agency within our mission area. The Risk Management Agency and
the Federal Crop Insurance Corporation play a pivotal role in
fulfilling the mandates of the 1996 farm bill, while ensuring
that American agriculture remains solid, solvent, and globally
competitive into the 21st century. To accomplish these tasks,
RMA intends to refine existing products, create innovative,
cost-effective tools, educate farmers and the public, and
expand its partnership with the private insurance sector and
the agriculture community.
The administration's proposal to make revenue insurance
available nationwide reflects the strong demand among producers
that we have seen for new revenue insurance products, such as
crop revenue coverage, income protection, and revenue
assurance. In implementing the revenue insurance programs, no
additional premium subsidy has been paid, and the expected 1996
loss ratio experience is within the statutory limits and
comparable to RMA's standard multiperil production risk
coverage.
To offset the additional delivery expenses and the expected
growth involved in expanding revenue insurance nationwide, the
administration proposes to reduce the reimbursement rate paid
to private insurance companies for delivery expense, as well as
the loss ratio used to establish the premium rate structure.
Under this proposal, the reimbursement rate for delivery
expenses would be reduced from 28 percent under current law to
24.5 percent of the premium for multiperil coverage. This
reduction is based on extensive analysis conducted by our Risk
Management Agency and the General Accounting Office and would
reduce discretionary spending for delivery expenses by $203
million under current law to $150 million under the proposal.
Further, our proposal would make a portion of the overall
reimbursement rate discretionary and subject to appropriation,
whereas current law treats only the sales commissions portion
of the reimbursement as discretionary. We believe this change
offers insurance companies more flexibility for adjusting to
the reduced reimbursement rate.
The budget provides $68 million in discretionary spending
to pay Risk Management Agency's administrative expenses, which
reflects a modest increase of $4 million for full-time staff
positions, to adjust for recent losses and to improve RMA's
ability to service participating private sector companies.
Turning now to the international side of the Farm and
Foreign Agricultural Services mission area, I am pleased to
report that exports of U.S. farm and food products posted
another sales record in 1996. Exports climbed to $59.8 billion,
a gain of more than $5 billion from the previous year. With the
strong back-to-back gains of the last 2 years, U.S.
agricultural exports have increased by some $19 billion--or
close to 50 percent--since 1990. As a result, agricultural
exports supported 1 million jobs both on and off the farm, one-
third of which were in rural areas.
Continued progress in the international arena is crucial to
the economic security of American farmers and ranchers. The
changes made in domestic farm programs by the 1996 farm bill
have made U.S. producers more dependent than ever on exports to
maintain and expand their incomes. American agriculture is
currently twice as dependent on overseas sales as the U.S.
economy as a whole, and the sector will be 2\1/2\ times as
export-dependent by the turn of the century. It is critical,
therefore, that we continue our aggressive trade promotion
efforts to help U.S. producers and exporters take full
advantage of emerging export market opportunities. The 1998
budget continues USDA's commitment to export promotion and
growth by providing a total program level of just under $7.7
billion for international programs and activities.
For the CCC export credit guarantee programs, the budget
provides a total program level of $5.7 billion. Our proposals
continue two initiatives designed to increase the utility of
the CCC export credit programs, supplier credit guarantees, and
facilities finance guarantees.
The budget provides higher program levels for our two
export subsidy programs, the Export Enhancement Program [EEP]
and the Dairy Export Incentive Program. In the case of EEP, we
propose to make available $500 million, the maximum level
permitted by the 1996 farm bill.
For the Market Access Program, the budget continues funding
at its maximum authorized level of $90 million.
For Public Law 480 foreign food assistance, the budget
proposes a total program level of $990 million, a reduction of
$57 million from the current estimates for 1997. Our 1998
request level is expected to provide for approximately 3.2
million metric tons of commodity assistance, unchanged from the
current tonnage estimate for 1997.
For the Foreign Agricultural Service, the budget proposes a
funding level of $151 million, an increase of $15 million above
the 1997 level. Most of the proposed increase will be used to
help meet the cost of several FAS activities which are
currently supported with CCC funds made available to FAS
through reimbursable agreements. These activities include the
Emerging Markets Program and the operating costs of the CCC
computer facility, which serves as the Department's collection
point for international production intelligence and crop
estimates.
The FAS appropriations request also includes $2.4 million
for the Cochran Fellowship Program, which will continue the
program at its current 1997 level. The budget also includes new
provisions to address the difficulties in accurately estimating
and funding the annual operating cost of FAS overseas offices.
First, the budget provides an advance appropriation of $3
million for 1999 to fund documented wage and price increases
and/or exchange rate losses incurred during 1998. Second, the
budget proposes that funds appropriated to FAS in 1998 be
available for obligations for 2 years rather than 1 year.
In closing, I would like to note that today's budget
realities mean that the Government must be leaner and more
efficient, but the era of responsive and responsible Government
is not over. While there are things that Government cannot do
or Government should not do, there are many legitimate public
needs that only Government can meet. When it comes to advancing
the stability, sustainability and economic vitality of American
agriculture and of our farmers and ranchers, who are the
bedrock of our Nation's agricultural bounty, the FFAS mission
area has a vital role to play.
Mr. Chairman, members of the committee, that concludes my
statement. We will be pleased to answer any questions that you
might have.
Prepared Statements
Senator Cochran. Thank you very much, Mr. Secretary. We
thank you again for being here and for helping us to understand
the details of this budget request. We have your written
statements and they will be made part of the record.
[The statements follow:]
Prepared Statement of Dallas Smith
Mr. Chairman and members of the Subcommittee, I am pleased to have
this opportunity to discuss the 1998 budget and program proposals for
the Farm and Foreign Agricultural Services mission area of USDA. With
me today are August Schumacher, Administrator of the Foreign
Agricultural Service; Christopher Goldthwait, the General Sales
Manager; Randy Weber, Acting Administrator of the Farm Service Agency;
Kenneth Ackerman, Administrator of the Risk Management Agency; and
Dennis Kaplan from the Office of Budget and Program Analysis.
Statements by the Administrators, providing details on their
agencies' budgets and program proposals for 1998, have been submitted
to the Subcommittee. My statement will summarize the proposals, after
which we will be pleased to respond to your questions.
A fundamental goal of the Farm and Foreign Agricultural Services
mission area is to secure the long-term economic vitality and global
competitiveness of American agriculture by expanding trade and economic
opportunities and promoting income growth and development throughout
rural America. We are the ``production agriculture'' mission area. We
work to keep America's farmers and ranchers--the linchpins of our
agricultural economy--in business.
How we accomplish our mission will in large part be determined by
the new policies set in place by the Federal Agriculture Improvement
and Reform Act of 1996 (the 1996 Act), and one of our primary tasks
this past year has been to implement the policy and program changes
provided for in the Act. As a result of our efforts, nearly 99 percent
of eligible acres were entered into production flexibility contracts
last year.
Although the 1996 Act has provided much greater flexibility to our
farmers in their production and marketing decisions, it has also
increased the risks inherent in farming by reducing the Federal
government's role in supporting incomes and managing supplies.
Consequently, we remain concerned about the adequacy of the safety net
for our producers and have been working diligently to expand and
improve programs which help producers manage their price and production
risks. At the same time, we have continued our efforts to reduce
expenses, improve efficiency, and deliver responsive, quality service
to our farm and rural customers.
farm service agency
The Farm Service Agency (FSA) administers the farm credit programs,
several conservation programs, and the domestic commodity price and
income support programs of the Commodity Credit Corporation (CCC). The
CCC is also the source of funding for most of the cost-share and land
retirement conservation programs administered by the FSA and the
Natural Resources Conservation Service (NRCS), and many of the export
programs administered by the Foreign Agricultural Service (FAS).
Farm Credit Programs
The farm credit programs administered by FSA continue to serve as a
vital source of credit for our nation's farmers and ranchers. They
provide a safety net for producers who suffer a financial setback.
This budget continues the trend toward emphasizing guaranteed
loans, which are made in partnership with private lenders and have a
low subsidy cost for taxpayers. We remain responsive, however, to the
continued need for direct loans, which are targeted to beginning
farmers and members of socially disadvantaged groups who show promise
for success but would be unable to obtain credit elsewhere. Our goal is
to assist borrowers, through supervised credit, to achieve a successful
agricultural operation and graduate to private credit. Far more
attention than in prior years is being paid to repayment ability and
adequate security.
The 1998 budget provides for a total of about $2.8 billion in farm
credit program loans and guarantees, which is about $300 million less
than the amount that can be supported by the 1997 appropriation. Of the
reduction, about $200 million is in the guaranteed farm ownership loan
program. However, the 1998 budget level of $400 million is consistent
with the actual demand for the program in recent years. The
unsubsidized guaranteed farm operating loan program would be maintained
at a level of about $1.7 billion. The remaining farm ownership and
operating programs are generally funded at the 1997 supportable levels
with a modest increase for the credit sales program. In addition, the
1998 budget proposes to maintain the emergency disaster loan program at
$25 million.
Commodity Credit Corporation
Reflecting the trend for Federal outlays for farm price and income
support programs, total CCC outlays have declined from the 1986 peak of
$26 billion to $4.6 billion in 1996. This is the first time CCC outlays
have dropped below $5 billion since 1981. Including conservation
programs and other programs for which CCC funding was authorized by the
1996 Act, CCC outlays are projected to total $7.8 billion in 1997 and
$9.9 billion in 1998, and decline to about $7.6 billion by 2002.
Beginning in 1998, in response to recommendations of the Office of
the Inspector General, the request for appropriations to reimburse CCC
for net realized losses will cover the actual amount of the
unreimbursed losses incurred 2 years earlier. The 1998 budget requests
$784 million for the balance of 1996 losses not reimbursed through
appropriations in 1996 and 1997. Appropriations to reimburse CCC for
net realized losses incurred in 1997 will be requested in the 1999
budget.
Provisions of the 1996 Act also limit CCC expenditures for computer
equipment and cap reimbursements to agencies for administrative support
services at 1995 levels.
Conservation Programs
The Conservation Reserve Program (CRP) is the major conservation
program administered by FSA. The 1996 Act reauthorized the CRP, set
maximum enrollment at 36.4 million acres, and switched the program's
financing from direct appropriations to CCC funding. The legislation
also redefined the program, changing its primary focus from highly
erodible land conservation and supply management to environmental
protection, with wildlife habitat and water quality improvements
joining erosion reduction as primary program objectives.
The 1998 budget assumes a competitive bid process will be used to
enroll nearly 19 million acres of new and expiring CRP contract acres
in 1997. This figure is not, however, a target such as was used by CRP
in the 1980's. Instead, enrollment will depend upon the nature of the
bids. The goal of the CRP is to only retire lands where the benefits to
society from the retirement from agricultural production exceed the
costs. Enrollments in subsequent years are assumed to gradually
increase total enrollment to 36.4 million acres by 2002.
Signup for CRP regular enrollment was held March 3 through March
28. Results as of March 21 indicate that landowners submitted over
240,200 offers to enroll almost 20 million acres, of which about 14.7
million are currently under contracts that expire in September. With
technical assistance from NRCS, FSA will undertake the voluminous task
of evaluating the environmental benefits of all offers, and by mid-June
will notify producers as to which acres have been accepted into the
program. Continuous signup is also in place for certain high priority
practices involving small acreages, such as riparian buffers, filter
strips and windbreaks.
The budget also reflects provisions of the 1996 Act authorizing CCC
funding for a number of new conservation programs, most of which will
be administered by NRCS in cooperation with FSA.
The Agricultural Conservation Program, the Colorado River Basin
Salinity Control Program, the Water Quality Incentives Program, and the
Great Plains Conservation Program were replaced by the Environmental
Quality Incentives Program. The Flood Risk Reduction Program provides
incentives to move farming operations from frequently flooded land, and
the Conservation Farm Option gives producers incentives to create
comprehensive farm plans. The Wildlife Habitat Incentives Program
provides cost-share assistance to landowners to implement management
practices improving wildlife habitat. The Farmland Protection Program
provides for the purchase of easements limiting nonagricultural uses on
prime and unique farmland.
Under the Emergency Conservation Program (ECP), the Department
shares the cost of carrying out practices to assist and encourage
farmers to rehabilitate farmland damaged by natural disasters. ECP
received emergency funds of $25 million in 1997, and on March 19 the
Administration transmitted to Congress a request for ECP supplemental
funding of $20 million, plus a contingency reserve of $17 million to be
available at the request of the President. The 1998 President's budget
does not include a request for funding ECP, but proposes the
establishment of a new $5.8 billion contingent reserve for emergency
funding requirements for various disaster assistance needs. This fund
would be available to the President for disaster relief purposes,
including use in the Department's emergency conservation activities.
CCC outlays for CRP and other conservation programs are projected
in the 1998 budget to increase from negligible levels in 1996, when
rental payments were funded through appropriations, to $1.9 billion in
1997 and to $2.2 billion in 1998.
Commodity Programs
The 1996 Act replaced the deficiency payment program which had been
in place since the 1970's with a new program of payments that generally
are not tied to market prices or to current plantings. Dairy policy
also is changed under the 1996 Act with a phaseout of price support and
consolidation of milk marketing orders. The new law also alters the
sugar and peanut programs. As a result, a great deal of the volatility
associated with forecasting commodity program outlays has been removed.
Commodity program outlays are a barometer of changing programs and
policies. The 1998 budget projects that CCC outlays for commodity
programs will increase from about $5 billion in 1997 to $6.2 billion in
1998, and then decline again to about $4 billion by 2002.
This budget also reflects legislation that we will be proposing to
the authorizing committees to improve the safety net for farmers,
reflecting the President's pledge when he signed the 1996 Act. Our
legislation provides discretionary authority to extend commodity loans
for 6 months during periods of depressed market prices or market
disruptions, allows managed haying and grazing of CRP acreage,
increases fruit and vegetable planting flexibility for acreage enrolled
in production flexibility contracts, and provides for greater
flexibility in the timing of contract payments. The change in CRP
haying and grazing provisions is estimated to reduce CRP outlays by
about $25 million per year.
Legislation will also be proposed to expand revenue insurance
coverage nationwide, improve farm credit services, and make other
technical adjustments to improve farm programs.
Changes made by the 1996 Act have diminished the traditional role
of the farm programs as a buffer against fluctuations in production and
commodity prices. Our greatest challenge is to find new ways to help
farmers thrive in an increasingly risky environment and yet not be
involved in the micromanagement of agricultural decisions. That is why
risk management has become a top priority, and why the President and
the Department attach such importance to enactment of legislation
designed to improve the programs that help farmers better manage price
and production risk.
FSA Salaries and Expenses
For FSA salaries and expenses we are requesting a total
appropriated level of $954 million, a net decrease of $1.9 million from
1997.
Our staffing reductions for 1998 continue to run well ahead of
those projected in the Department's reorganization plan. The 1998
budget calls for staffing levels of 5,877 Federal staff-years and 9,879
non-Federal county office staff-years--reductions of 269 and 1,850
staff-years, respectively, from 1997 levels. We expect to achieve this
reduction through a combination of about 530 buyouts and a reduction in
force of about 1,589 staff-years.
Since 1993, FSA has downsized its work force by approximately 4,700
FTE's, or about 21 percent, due to streamlining efforts and the
programmatic impacts of the 1996 Act. The additional reduction of 2,119
FTE's proposed in the 1998 budget would bring the cumulative FSA work
force reduction since 1993 to 30 percent. This breaks down to 34
percent for non-Federal county office employees and 23 percent for
Federal employees, including Federal county farm credit staff.
As part of the Department's streamlining initiative, the budget
projects that 500 county FSA offices will close by the end of 1999. No
decisions have been made as to which offices will be affected, and none
will be made without the appropriate consultations with Congress. In
1997, the Department will contract for an independent study of FSA and
NRCS to look for additional opportunities for streamlining and
increasing the efficiency of our service to customers, as well as
undertake a major review of our regulations, in conjunction with NRCS,
to significantly reduce the paperwork burden on farmers.
risk management agency
Farmers today face a risk environment dramatically different from
that which existed a few years ago. Deficiency payments and ad hoc
disaster aid have been eliminated, and a number of other price and
production assistance programs have been significantly reduced by the
1996 Act and other legislation. To fill this void, producers must take
active steps to reduce their agricultural risks.
The 1996 Act created the Risk Management Agency (RMA) to administer
the crop insurance program and to carry out other risk management
functions. Previously, the crop insurance program was administered by
the FSA, which retains responsibility for the Noninsured Crop Disaster
Assistance Program (NAP), and which provides basic catastrophic crop
insurance through its county offices in States where private crop
insurance resources are limited.
The RMA and the Federal Crop Insurance Corporation (FCIC) play a
pivotal role in fulfilling the mandates of the 1996 Act while ensuring
that American agriculture remains solid, solvent, and globally
competitive into the 21st century. To accomplish these tasks, RMA
intends to refine existing products, create innovative, cost-effective
tools, educate farmers and the public, and expand its partnerships with
the private insurance sector and the agricultural community.
The 1998 budget provides funding for the crop insurance program
administered by RMA under both current law and new legislation to be
submitted to the authorizing committees to improve the safety net for
farmers by establishing a nationwide program for revenue insurance.
Revenue insurance protects producers' incomes against shortfalls due to
either price or yield fluctuations. Our legislative proposal is
intended to be budget neutral overall. However, it provides for a
reduction in the discretionary spending portion of program expenses.
Under current law, funding for sales commissions, which has been
treated as mandatory spending, shifts to discretionary spending in
1998. All other expenses of RMA are treated as mandatory, although
subject to appropriation, for which the budget provides ``such sums as
may be necessary.''
The Administration's proposal to make revenue insurance available
nationwide reflects the strong demand among producers that we have seen
for new revenue insurance products, such as Crop Revenue Coverage,
Income Protection, and Revenue Assurance. However, current law limits
RMA's authorities in the revenue insurance area to pilot programs. In
implementing the revenue insurance programs, no additional premium
subsidy has been paid, and the expected 1996 loss ratio experience is
within the statutory limits and comparable to RMA's standard multiperil
production risk coverage. The additional cost to the Federal government
has been an increase in delivery expenses, including underwriting gains
paid to the insurance companies.
To offset the additional delivery expenses and the expected growth
involved in expanding revenue insurance nationwide, the Administration
proposes to reduce the reimbursement rate paid to private insurance
companies for delivery expenses, as well as the loss ratio used to
establish the premium rate structure.
Under this proposal, the reimbursement rate for delivery expenses
would be reduced from 28 percent under current law to 24.5 percent of
the premium for multi-peril coverage. This reduction is based on
extensive analysis conducted by RMA and the General Accounting Office
and would reduce discretionary spending for delivery expenses from $203
million, under current law, to $150 million under the proposal.
Further, our proposal would make a portion of the overall reimbursement
rate discretionary and subject to appropriation whereas current law
treats only the sales commissions portion of the reimbursement as
discretionary. We believe this change offers insurance companies more
flexibility for adjusting to the reduced reimbursement rate.
Finally, our legislative proposal will provide more flexibility for
determining subsidy amounts and establishing pilot programs. It will
also make certain changes in program compliance requirements. None of
these changes is expected to have a budgetary impact.
The current law budget also includes funding for $257 million in
mandatory account spending to reimburse the reinsured companies for the
delivery of limited and buy-up coverage. This is a decrease from 1997
due to the legislative mandate that a portion of administrative
expenses paid to the reinsured companies be transferred to the
discretionary account. Under proposed legislation, it is estimated that
an additional $10 million in administrative reimbursements to reinsured
companies would be required.
RMA Salaries and Expenses
Staff levels for RMA have decreased dramatically in recent years
even as the program has grown in size, scope, and expectations. Overall
staff resources, including administrative resources from the FSA, have
been reduced by more than 20 percent since 1993. As of September 30,
1996, there were 536 employees in RMA, at headquarters and in 10
regional service offices and 6 compliance offices.
Under current law, the budget provides $68 million in discretionary
spending to pay RMA's administrative expenses, which reflects a modest
increase of $4 million for full-time staff positions to adjust for
recent losses and to improve RMA's ability to service participating
private sector companies. Funding for the new and expanded programs is
intended to ensure that the programs are implemented as expeditiously
as possible. The current law budget also includes $203 million for the
payment of sales commissions out of the discretionary account. Our
legislative proposal would reduce the discretionary portion of the
administrative reimbursements paid to reinsured companies to $150
million and allow for the payment of expenses other than just sales
commissions.
foreign agricultural service
Turning now to the international side of the FFAS mission area, I
am pleased to report that exports of U.S. farm and food products posted
another sales record in 1996. Exports climbed to $59.8 billion, a gain
of more than $5 billion from the previous year.
With the strong, back-to-back gains of the last 2 years, U.S.
agricultural exports have increased by some $19 billion, or close to 50
percent since 1990. As a result, agriculture led all U.S. trade
categories as the most significant contributor to the U.S. balance of
trade and supported one million jobs both on and off the farm, one-
third of which were in rural areas.
Early forecasts of agricultural exports for the current year
suggest a more moderate sales pace. Current projections for 1997 call
for exports to reach $56.5 billion, down about 6 percent from 1996, but
still the second highest value on record. The anticipated reduction
mainly reflects increased foreign production of grains and lower
average prices for wheat and coarse grains. High-value exports are
forecast to set another record this year.
These strong export gains provide convincing evidence that American
agriculture is reaping the benefits of the North American Free Trade
Agreement, the Uruguay Round Agreement on Agriculture, and the more
than 200 other trade agreements the Administration has successfully
negotiated. As a result of these agreements, we now have the most open
world market of this century and enormous opportunities for additional
export growth.
Continued progress in the international arena is crucial to the
economic security of American farmers and ranchers. The changes made in
domestic farm programs by the 1996 Act have made U.S. producers more
dependent than ever on exports to maintain and expand their incomes.
American agriculture is currently twice as dependent on overseas sales
as the U.S. economy as a whole, and the sector will be two-and-a-half
times as export-dependent by the turn of the century. It is critical,
therefore, that we continue our aggressive trade promotion efforts to
help U.S. producers and exporters take full advantage of emerging
export market opportunities. At the same time, we must continue to
adapt and improve these efforts to meet today's challenges and keep
pace with intense competition.
Much of our recent export success can be directly linked to the
combined effects of our trade policy initiatives, export assistance
programs, and the market development efforts of FAS working with our
agricultural cooperators and others, including participants in the
Market Access Program (MAP).
Overseas, FAS field offices support USDA programs and the U.S.
agricultural export drive in 95 locations around the globe. These
offices continue to function as the ``eyes and ears'' for U.S.
agricultural exporters, and the thousands of attache reports that they
prepare each year are now available to the widest possible U.S.
audience almost instantly via the Internet. In line with the
Department's Long-Term Agricultural Strategy, we have increased staff
in the Pacific Rim and Latin America, and decreased staff in Europe.
Domestically, FAS has expanded its outreach and information efforts
to educate U.S. businesses about the tremendous potential of global
markets. A key part of this effort is the location of export advisors
at the state level--at the California, Colorado, and Oregon State
Departments of Agriculture and the Iowa State Office of the FSA.
FAS has joined forces with cooperators and MAP participants such as
the American Hardwood Export Council and the American Seafood
Institute, and with local entities such as state departments of
agriculture across the country to sponsor export seminars for small and
new-to-export businesses. Last July, in conjunction with FSA, FAS
conducted outreach efforts in 47 states plus Puerto Rico. The state-
hosted events attracted over 2,000 participants, bringing together
producers, bankers, agribusinesses, exporters, shippers, universities,
and Federal, state, and local officials.
Through these and other programs, the Department plays a vital role
in working with the private sector to identify emerging market
opportunities overseas and in using our export promotion and market
development tools to achieve our shared trade objectives.
The 1998 budget continues USDA's commitment to export promotion and
growth by providing a total program level of just under $7.7 billion
for international programs and activities.
For the CCC export credit guarantee programs, the budget provides a
total program level of $5.7 billion, which includes $5.3 billion for
GSM-102 short-term guarantees and $400 million for GSM-103
intermediate-term guarantees. The overall increase of $200 million
above the 1997 level consists of guarantees which will be made
available to emerging markets for U.S. agricultural products.
The GSM-102 program level continues two other credit initiatives--
supplier credit guarantees and facilities financing guarantees. The
budget provides for $350 million of supplier credit guarantees, an
increase of $100 million above the 1997 level. These guarantees, which
were first made available in late 1996, allow exporters of U.S.
agricultural products to obtain CCC guarantees for short-term credit
extended directly to foreign buyers. Supplier credit guarantees are
expected to be particularly useful in facilitating sales of processed
and consumer-ready products, which are among the fastest-growing
components of U.S. agricultural exports. To date, supplier credit
guarantees have been made available to facilitate U.S. agricultural
exports to Mexico, Guatemala, El Salvador, Panama, Jamaica, Indonesia,
Malaysia, Singapore and the Philippines.
Also under GSM-102 authority, the budget includes $100 million of
facilities financing guarantees, unchanged from the current estimate
for 1997. Under this initiative, CCC will provide guarantees for the
establishment or improvement of facilities and/or services designed to
address infrastructure barriers to increased export sales. We
anticipate publishing an interim final rule this spring for this
program.
The budget provides higher program levels for our two export
subsidy programs in 1998--the Export Enhancement Program (EEP) and
Dairy Export Incentive Program (DEIP). In the case of EEP, we propose
to make available $500 million, the maximum level permitted by the 1996
Act and a $400 million increase over 1997. The budget includes $89
million for DEIP in anticipation of higher sales under this program.
One of the more promising developments in 1996 was the virtual
suspension of global export subsidies, which mask market signals and
distort trade. EEP and DEIP program activity was reduced in 1996 as a
result of world commodity supply and competitive conditions.
Unfortunately, the responsible restraint by the United States has been
tested by renewed European Union subsidization, which began last
September. We must be ready to protect our agricultural trade interests
including the resumption of EEP, if necessary, and therefore, we have
provided full funding for EEP in 1998.
For the Market Access Program (MAP), formerly the Market Promotion
Program, the budget continues funding at its maximum authorized level
of $90 million. The MAP provides cost-share assistance to nonprofit
agricultural trade organizations, state and regional trade groups, and
private companies which carry out export promotion activities overseas.
The program has proven to be particularly effective in promoting sales
of high-value products.
During the past year, changes have been made in MAP to target more
resources to small businesses. In 1996, 56 percent of the funds for
promotion of branded products was made available to small entities, up
from 41 percent in 1994, and another 20 percent was made available to
farmer cooperatives. Additional program improvements recently have been
made which are designed to broaden participation, clarify program
criteria, strengthen evaluation and accountability, and simplify
program requirements for participants.
The budget includes a proposed rescission of $50 million in budget
authority for the Public Law 480 Title I concessional sales program in
1997 in order to provide a partial offset for a supplemental
appropriations request for the Special Supplemental Nutrition Program
for Women, Infants, and Children (WIC). This proposal will reduce the
Title I program level by $60 million and estimated commodity shipments
by 200,000 metric tons. However, allocations of commodity assistance
already announced for 1997 will not be affected by the rescission
because the reduction will be taken from a reserve of unallocated funds
and from unobligated funds carried over from 1996.
For 1998, the budget proposes a total Public Law 480 program level
of $990 million, a reduction of $57 million from the revised estimate
for 1997. This reduction will occur in the Title I concessional sales
program; funding for Titles II and III will remain largely unchanged
from 1997 enacted levels. Our 1998 request level is expected to provide
for approximately 3.2 million metric tons of commodity assistance,
unchanged from the revised tonnage estimate for 1997.
The 1998 budget for Public Law 480 also shifts the budget and
expenditures for the Title I program from the international affairs
function to the agriculture function of the Federal budget. This
proposal is an outgrowth of recent changes in the Title I statutory
authorities, which have placed a much greater emphasis on the program's
market development objectives. With these changes, the role and
importance of the Title I program in the Department's overall long-term
market development strategy has increased. Shifting Title I to the
agriculture function will allow the program to be managed and budgeted
as part of a consistent package of agricultural export programs.
FAS Salaries and Expenses
The Foreign Agricultural Service administers the Department's
important trade, export, and international cooperation activities. As
the Subcommittee will recall, last year's budget continued the pro-
active approach to the fundamental objective of increasing U.S.
agricultural exports by 50 percent by the year 2000. With the resources
provided for 1997, FAS has expanded market development activities,
including the Cooperator Program, and our domestic outreach efforts to
facilitate the entry of small and medium sized producers into the
international marketplace.
For 1998, the FAS budget proposes a funding level of $150.9 million
and 885 staff-years, an increase of $15.4 million above the 1997 level.
Most of the proposed increase will be used to help meet the costs of
several FAS activities which are currently supported with CCC funds
made available to FAS through reimbursable agreements. The budget
proposes that future funding of these activities will be included in
the FAS appropriation. With this change, their funding will no longer
be subject to the annual limitation on CCC reimbursable agreements
established by the 1996 Act.
These activities include the Emerging Markets Program, under which
technical assistance and training are provided to promising overseas
growth markets where there is potential to increase U.S. exports
significantly over the long term. They also include the operating costs
of the CCC Computer Facility, which serves as the Department's
collection point for international production intelligence and crop
estimates, and for other, related FAS Information Resources Management
costs.
An increase of $500,000 is requested to implement a systematic
process to review, identify, and catalog technical barriers to trade
and other technical requirements that limit export opportunities in the
top 30 export markets accounting for the majority of U.S. agricultural
trade. This review will lead to recommendations for overcoming the
identified barriers and expanding U.S. exports to these markets.
For the Cochran Fellowship Program, the budget provides funding of
$2.4 million, unchanged from this year's level.
The budget also includes new provisions to address the difficulties
in accurately estimating and funding the annual operating costs of our
overseas offices. First, the budget provides an advance appropriation
of $3 million for 1999 to fund documented wage and price increases and/
or exchange rate losses incurred during 1998. Second, the budget
proposes that funds appropriated to FAS in 1998 be available for
obligation for 2 years rather than 1 year. This will allow any savings
that may be realized in the cost of overseas operations to be carried
over for use the following year.
In conclusion, today's budget realities mean that government must
be leaner and more efficient, but the era of a responsive and
responsible government is not over. While there are things that
government can't do, or shouldn't do, there are many legitimate public
needs that only government can meet. When it comes to advancing the
stability, sustainability, and economic vitality of American
agriculture, and of the farmers and ranchers who are the bedrock of our
nation's agricultural bounty, the FFAS mission area has a vital role to
play.
Mr. Chairman, that concludes my statement. We will be pleased to
answer any questions you and other members of the Committee may have.
______
Prepared Statement of Bruce R. Weber
Mr. Chairman and Members of the Subcommittee, I am pleased to
present the fiscal year 1998 budget for the Farm Service Agency (FSA).
When our statement was presented to you last year, Congress had just
enacted the Federal Agriculture Improvement and Reform Act of 1996.
That legislation made significant changes in the design and funding of
the programs that this agency administers. Implementing the legislative
changes and working toward increased cost savings are our major tasks
in 1997. Our 1998 budget reflects the new direction in farm programs
coupled with a significant contribution toward the bipartisan effort to
balance the Federal budget by 2002. As I discuss the budget estimates
for our various activities--price and income support and related
programs of the Commodity Credit Corporation, conservation programs
funded by the Commodity Credit Corporation, the farm credit programs of
the Agricultural Credit Insurance Fund, and a number of others--I will
highlight the major changes. To conclude, I will summarize our request
for administrative support, noting the impact of the program and budget
changes on FSA staffing.
commodity credit corporation
Domestic farm commodity price and income support programs are
administered by the Farm Service Agency and financed through the
Commodity Credit Corporation, a government entity for which FSA
provides operating personnel. The CCC is also the source of funding for
most of the conservation programs administered by FSA and NRCS, and it
funds most of the export programs administered by FAS. Funds are
borrowed by the Corporation from the Treasury to finance CCC programs.
The Corporation has the authority to have outstanding Treasury
borrowings of up to $30 billion at any one time. Commodity support
operations, handled primarily through loans and payment programs, and
some limited purchase programs, currently include those for wheat,
corn, soybeans, minor oilseed crops, cotton (upland and extra long
staple), rice, tobacco, milk and milk products, barley, oats, sorghum,
peanuts and sugar.
commodity program outlays
The CCC budget attempts to capture the impact of economic or other
conditions 2 years into the future. The current 1998 budget estimates
largely reflect estimated supply and demand conditions for the 1997
crop. However, a great deal of the volatility associated with
forecasting commodity program outlays has been removed due to the
provisions of the 1996 Farm Bill. The price and income support program
funded by CCC for the 1996 crops and beyond are determined by that
legislation, which has fundamentally restructured income support
programs and discontinued supply management programs for producers of
feed grains, wheat, upland cotton, and rice. The deficiency payment
program, which was tied to market prices and had been in place since
the early 1970's, has been replaced with a new income support program
of payments that generally are not related to current plantings or to
market prices. The new law also expands planting flexibility and
suspends the authority for the Secretary to require farmers to idle a
certain percentage of their cropland in order to be eligible for income
support payments.
The budget includes proposed legislation that will build better
programs to help farmers manage risk and thereby improve the safety net
for farmers, reflecting the President's concerns when he signed the
1996 Farm Bill. The proposed legislation would provide discretionary
authority to extend commodity loans for 6 months during periods of
depressed market prices or market disruptions, allow for managed haying
and grazing on CRP acres, increase fruit and vegetable planting
flexibility for acreage enrolled in production flexibility contracts,
and provide greater flexibility in the timing of production flexibility
contract payments. The change in CRP haying and grazing provisions is
estimated to reduce CRP outlays by about $25 million per year.
Mr. Chairman, reflecting the trend for Federal outlays for farm
price and income support programs, total CCC outlays have declined from
the fiscal year 1986 high of $26 billion to $4.6 billion in fiscal year
1996. This is the first time CCC outlays have dropped below $5 billion
since fiscal year 1981. Including conservation programs and other
programs for which CCC funding was authorized by the 1996 Farm Bill,
CCC outlays are projected to total $7.8 billion in fiscal year 1997 and
$9.9 billion in fiscal year 1998, and decline to about $7.6 billion by
fiscal year 2002. This outlay trend is shown on the graph below.
[GRAPHIC] [TIFF OMITTED] T01AP08.040
For fiscal year 1998, total net outlays are expected to increase by
$2.1 billion to $9.9 billion--about a 27-percent increase, reflecting
higher net commodity lending outlays of $467 million; the absence of
deficiency payment refunds in fiscal year 1998, whereas $1.1 billion
will be received in 1997; an increase of $400 million in the export
enhancement program; higher net interest expenditures of $297 million;
and increased conservation program expenses of $241 million. While no
deficiency payment refunds are estimated for fiscal year 1998,
production flexibility contract payments will decline by $644 million.
ADP Expenses and other Section 11 Activities
Section 161 of the 1996 Farm Bill significantly limits the use of
CCC funds for operating expenses. CCC no longer has authority to
purchase personal property, except within authorized limitations. CCC
spending for equipment or services relating to automated data
processing (ADP), information technologies or related items (including
telecommunications equipment and computer hardware and software, but
excluding reimbursable agreements), was limited by the 1996 Act to $170
million in fiscal year 1996, and $275 million for the six-year period
including fiscal years 1997 through 2002, unless additional amounts for
such contracts and agreements are provided in advance in appropriation
acts. The amount actually obligated for ADP-related expenses in fiscal
year 1996 was $144 million. The 1996 Act also requires that CCC submit
to Congress on a quarterly basis an itemized report of all expenditures
over $10,000, excluding program payments.
Section 161 of the 1996 Act also amended Section 11 of the CCC
Charter Act to limit the uses of CCC funds for reimbursable agreements
and transfers and allotments of funds to State and Federal agencies.
Starting in fiscal year 1997, the total of CCC fund uses under that
section in a fiscal year, including agreements for ADP or information
resource management activities, may not exceed the total of such
allotments and transfers in fiscal year 1995. CCC obligations for
Section 11 activities in fiscal year 1995 were $45.6 million, and
obligations in fiscal year 1996 were $49.4 million.
The 1998 budget assumes that expenditures for computer and
telecommunications equipment will total $109 million in fiscal year
1997 and $104 million in fiscal year 1998. The budget projects annual
spending under the cap on reimbursable agreements will total $41.2
million in fiscal year 1997 and $35.6 million in fiscal year 1998.
Reimbursement for Realized Losses
The 1998 budget reflects an estimated need for $784 million to
reimburse CCC for its realized losses, a reduction of $716 million from
the fiscal year 1997 reimbursement of $1.5 billion. In prior years, the
request for appropriations to reimburse the CCC for net realized losses
has been based on an estimate of losses incurred one year earlier which
have not been previously reimbursed. The estimate could exceed or fall
short of the actual amount of loss. Beginning in 1998, in response to
OIG recommendations, the request for appropriations to reimburse CCC
for net realized losses will cover the actual amount of the
unreimbursed losses incurred 2 years earlier. Fiscal year 1996 losses
totaled $7.8 billion, of which $5.5 billion was restored by
appropriations in 1996 and $1.5 billion was restored by appropriations
in 1997, leaving a balance of $784 million to be restored in 1998.
Appropriations to reimburse CCC for net realized losses to be incurred
in 1997, currently estimated to total $9 billion, will be requested in
the 1999 budget.
Appropriation Language Changes
Two CCC appropriation language changes are proposed in the budget:
--New language establishing a minimum program level for export
credits for emerging markets.
--A shift in funding for the Emerging Markets Technical Assistance
Program from CCC to FAS appropriation. With this change, these
activities will be carried out with discretionary, rather than
mandatory funding and will no longer be included in the annual
limitation on Section 11 CCC reimbursable agreements and other
transfers. The increase in FAS funding is offset by a $10
million decrease in the fiscal year 1998 CCC reimbursable
agreements and other transfers cap.
ccc-funded conservation programs
Conservation Reserve Program
The 1996 Farm Bill reauthorized the Conservation Reserve Program,
established maximum enrollment at 36.4 million acres, and changed the
program's financing from direct appropriation to CCC funding. The
legislation also redefined the program, changing its primary focus from
highly erodible land conservation and supply management to
environmental protection, with wildlife habitat and water quality
joining soil erosion reduction as primary program objectives.
Continuous signup is available for certain high priority practices
involving small acreages, such as riparian buffers, filter strips, and
windbreaks. Signup for CRP regular enrollment was held March 3 through
March 28. I am pleased to report that as of March 21, the end of the
third week of the 4-week signup, landowners had offered to enroll
almost 20 million acres, of which about 14.7 million are currently
under contracts that expire in September. The remaining 5.3 million
acres are new offers. With technical assistance from the Natural
Resources Conservation Service, FSA will carry out the massive job of
evaluating the environmental benefits of all offers, and will notify
producers by mid-June as to the acres that have been accepted into the
program.
In 1997, CCC is making payments of approximately $1.765 billion for
rental costs and about $8 million for sharing the cost of permanent
cover on replacement acres. Fiscal year 1997 CRP technical assistance
costs of $83 million for NRCS and FS are funded by unobligated balances
of CRP funds appropriated prior to enactment of the 1996 Farm Bill. For
1998, CCC program costs are expected to total approximately $1.928
billion, consisting of $1.667 billion for rental payments on previously
enrolled and extended acres; $246 million for cost-sharing of permanent
cover on enrolled acres; and $15 million for NRCS technical assistance
funded under the CCC Section 11 cap on reimbursables and transfers. An
additional $24 million in NRCS and FS technical assistance costs in
1998 will be funded by unobligated balances of CRP appropriated funds.
Other CCC-Funded Conservation Programs
The 1996 Farm Bill restructured many of USDA's conservation
programs and, as with the CRP, changed the financing to CCC funding.
With the exception of the Flood Risk Reduction Program, the CCC-funded
conservation programs are administered under the lead of NRCS. NRCS
will discuss these programs with you in detail, and I will just mention
them briefly.
The Wetlands Reserve Program was reauthorized by the 1996 Farm
Bill, and funding of $163.6 million is included in the CCC budget. The
new Environmental Quality Incentives Program encompasses the objectives
of four previous conservation programs: the Agricultural Conservation
Program, the Water Quality Incentives Program, the Great Plains
Conservation Program, and the Colorado River Basin Salinity Control
Program. The CCC budget reflects $200 million for the EQIP in 1998. The
Conservation Farm Option is a pilot program which allows an eligible
producer to receive a single payment totaling what he or she would have
received separately under the CRP, WRP, and EQIP. For 1998, $15 million
is included for the CFO in the CCC budget. The new Farmland Protection
Program will use $18 million in 1998 to share with State and local
governments the cost of acquiring conservation easements on specified
farmland. CCC funding of $22.5 million will be used in 1998 for the
Wildlife Habitat Incentives Program, which shares the cost of
developing habitat for upland wildlife, wetland wildlife, threatened
and endangered species, fish, and other types of wildlife. The Flood
Risk Reduction Program enables production flexibility program
participants with acreage that is frequently flooded to receive in
advance up to 95 percent of the production flexibility contract
payments they are projected to receive from the time of enrollment in
the FRRP through September 30, 2002. In exchange the producer must
agree to terminate the production flexibility contract on FRRP acres,
comply with swampbuster and conservation compliance requirements, and
forgo future payments for disasters, crop insurance, and conservation
programs, as well as loans for contract commodities, oilseeds, and
extra-long staple cotton. The FRRP is funded at $10 million in 1997,
but no funding is proposed for 1998.
appropriated conservation programs
Agricultural Conservation Program
As I indicated, the 1996 Farm Bill repealed the Agricultural
Conservation Program in its sixtieth year and incorporated its
objectives into the new Environmental Quality Incentives Program funded
by CCC.
The fiscal year 1996 ACP appropriation of $75 million remained
available after April 4, 1996, to fund previously approved practices as
well as new practices that met the objectives of the EQIP. Outlays
under the program from 1996 and prior obligations, including long-term
agreements, will continue for a number of years.
Emergency Conservation Program
The Emergency Conservation Program assists producers in
rehabilitating farmland damaged by natural disaster and in carrying out
emergency water conservation measures during periods of severe drought.
The program shares the cost of practices to restore the land to its
productive capacity as it existed prior to the disaster. As might be
expected, funding needs for this program vary widely from year to year,
depending upon the occurrence of natural disasters.
No ECP funding was provided in the fiscal year 1997 Appropriations
Act, but supplemental funding of $25 million was made available by the
Omnibus Consolidated Appropriations Act. All of those funds were
allocated, along with over $8 million in unused allocations for prior
disasters that were returned from the States and re-allocated. As of
March 28, $277 thousand remains. As a result of winter storms in the
West, flooding in the Ohio Valley, and other recent disasters, requests
for emergency conservation assistance are expected to be substantial
when flood waters recede and realistic estimates can be made. On March
19, the Administration forwarded to Congress a request for emergency
supplemental appropriations, which includes an ECP request of $20
million plus another $17 million in contingency funding for ECP to be
released upon the official request of the President.
The Budget requests no specific funding for the ECP for fiscal year
1998 but instead includes a request for a Governmentwide disaster
contingency account.
Dairy Indemnity Program
The Dairy Indemnity Program compensates dairy farmers and
manufacturers who, through no fault of their own, suffer income losses
on milk or milk products removed from commercial markets due to
residues of certain chemicals or other toxic substances. Payees are
required to reimburse the Government if they recover their losses
through other sources such as litigation. The 1998 appropriation
request of $100 thousand would cover program needs in an average year
with no major contamination incidents. However, 1997 has already proven
to be exceptional, with Arizona alone experiencing a loss in excess of
$120 thousand due to contamination of feed grown in soil containing
residues of a pesticide used years ago. This claim, along with a
sizable aflatoxin problem in Texas and smaller ones in six other
States, has exhausted the full $257 thousand available for allocation
at the start of the year. Although additional requests from producers
have come in, we have notified our county offices that no funds are
currently available.
farm credit and related programs
Agricultural Credit Insurance Fund
The programs of the Agricultural Credit Insurance Fund provide a
variety of loans and loan guarantees to farm families who would be
unable to obtain credit otherwise. The majority of FSA lending activity
occurs in partnership with private lenders through the guarantee
programs, which provide a safety net for producers by providing a means
for them to continue to obtain credit from their regular lenders when
they have suffered a financial setback. This budget continues the trend
toward emphasizing guaranteed loans, which are most cost-efficient for
the taxpayer because of their low subsidy cost. We remain responsive,
however, to the continued need for direct loans, which are targeted to
beginning farmers and members of socially disadvantaged groups. Our
goal is to assist borrowers, through supervised credit, to achieve a
successful agricultural operation and graduate to private credit.
The 1998 budget provides for a total program level of $2.8 billion
in ACIF loans and guarantees, approximately $300 million less than the
current estimate for 1997. Of this amount, $2.3 billion would be for
subsidized and unsubsidized loan guarantees, and $532 million would be
for direct loans.
Farm Ownership Loans.--For direct farm ownership loans we are
requesting a loan level of $30.8 million, which requires an
appropriation of just over $4 million. For guaranteed farm ownership
loans in fiscal year 1998, we are requesting a loan level of $400
million, which requires an appropriation of $15.4 million.
Farm Operating Loans.--We are requesting a subsidy appropriation of
$29.6 million to enable us to make direct farm operating loans of $450
million. For guaranteed farm operating loans, an appropriation of $19.3
million will make possible $200 million in loans with subsidized
credit. For our largest farm operating loan program, unsubsidized
guarantees, a request for $19.9 million in appropriated funds will
cover the Federal cost of $1.7 billion in loans.
Other Loan Programs.--The Budget requests $25 million for credit
sales of acquired property, which requires budget authority of $3.3
million. This program assists qualified applicants to purchase property
in FSA inventory.
The Budget also proposes a subsidy of just over $6 million to
support a program level of $25 million in emergency disaster loans in
fiscal year 1998. I would like to note that in fiscal year 1997, in
addition to the $6.4 million regular appropriation, we have a carryover
subsidy of $28.9 million that will support additional emergency
disaster loans of $95.2 million. The carryover is from the funds that
were made available in fiscal year 1996 by the 1997 Agriculture
Appropriations Act, to remain available until expended. We expect to
fully utilize these funds in the current fiscal year.
In addition, we are requesting $132 thousand to provide $1 million
in Indian tribe land acquisition loans.
The 1998 budget proposes a farm credit program level close to the
1997 level but at a reduced cost, thanks to a combination of agency
efforts to reduce direct loan delinquency rates and the benefits of
expected lower interest rates in a strong economy. In 1997, total
direct lending authority is $568 million, supported by a subsidy of $74
million. The budget, in contrast, estimates total direct lending
authority of $532 million for 1998, with a subsidy of $43 million. So,
while total direct lending authority decreases by about 6 percent, the
supporting subsidy decreases by more than 40 percent. Through better
management of the credit programs and by utilizing the tools provided
in the 1996 Farm Bill, we will be able to continue to serve the credit
needs of the Nation's small, family farmers while producing the kind of
cost cutting performance necessary to achieve a balanced budget.
State Mediation Grants
Since 1987, State Mediation Grants have enabled a number of States
to develop programs to deal with conflicts involving distressed
agricultural loans. The Department of Agriculture Reorganization Act of
1994 expanded the program from farm credit cases only, to include
disputes concerning wetland determinations, conservation compliance,
pesticides, and other issues. Operated primarily by State universities
or departments of agriculture, the program provides a neutral mediator
to assist producers in resolving disputes before they result in
litigation, bankruptcy, or other serious consequences. Moreover,
mediation, at $200 to $250 per case, offers significant savings over
national level administrative hearings, which cost about $3,000 to
$4,000 per case, not including indirect costs such as travel and salary
of FSA employees involved in the appeal.
Currently 22 States have programs that qualify for grants. Three
other States are developing programs, and additional States are
considering doing so. For fiscal year 1998 the Budget requests $4
million, an increase of $2 million over fiscal year 1997, to meet the
rising demand expected as a result of the program's broadened scope and
to accommodate newly participating States.
administrative support
The costs of administering all FSA programs are funded by a
consolidated Salaries and Expenses account. The account is comprised of
direct appropriation, transfers from program loan accounts under credit
reform procedures, user fees, and advances and reimbursements from
various sources. These reimbursements include funding from the Foreign
Agricultural Service and Risk Management Agency for common
administrative support activities provided by FSA personnel.
For FSA Salaries and Expenses we are requesting a total
appropriated level of $954 million, a net decrease of $1.9 million from
fiscal year 1997.
Our staffing reductions for 1998 continue to run well ahead of
those projected in the Department's reorganization plan. The budget for
FSA calls for 1998 staffing levels of 5,877 Federal staff-years and
9,879 non-Federal county office staff-years--reductions of 269 and
1,850 staff-years, respectively, from the 1997 levels of 6,146 and
11,729. We estimate that this total reduction of 2,119 staff-years will
be achieved through a combination of about 530 buyouts and a reduction
in force of about 1,589 staff-years. Salary and benefit savings of
$75.9 million from the proposed staffing reductions will be mostly
offset by one-time separation costs estimated at $56.3 million and by
pay-related costs of $18.9 million for remaining staff.
As a result of the 1996 Farm Bill, 1998 workload in some areas such
as commodity program payments, conservation, basic farm record
maintenance, and compliance will continue the decline begun this year.
Other activities are expected to remain constant or, in some cases such
as commodity loan activity, to increase.
Although FSA workload is lower in 1997 due to the 1996 Act, FSA is
faced with a CRP signup that, as you know, was held March 3 through
March 28 and will enroll as much as 19 million acres. The associated
workload was not considered in the agency's analysis of Farm Bill
workload because, although that Act provided the opportunity to
increase enrollment, decisions concerning alternate enrollment levels
had not been completed at the time of the analysis. The addition of
this workload will stretch current resources and may require the hiring
of temporary employees. The decision to increase enrollment levels
includes enrolling an additional 8 million acres in 1998. Although
workload is expected to continue to decline in 1998, required staffing
reductions coupled with the increased enrollment level may again
require relying upon temporary employees to fully accomplish CRP-
related workload.
From 1993 through the current fiscal year, FSA has downsized its
work force by approximately 4,700 FTE's, or about 21 percent, due to
streamlining efforts and the programmatic impacts of the 1996 Farm
Bill. The additional reduction of 2,119 FTE's proposed in the 1998
budget would bring the cumulative FSA work force reduction since 1993
to 30 percent, which breaks down to 34 percent for non-Federal county
office employees and 23 percent for Federal employees, including
Federal county farm credit staff.
The President's Budget projects that, as part of the USDA
streamlining initiative, 500 county FSA offices will close by the end
of fiscal year 1999. I would like to emphasize, however, that no
decisions have been made as to which offices will be affected. We are
currently in the planning stages of determining the various criteria
that will be used as a basis for these decisions. However, we will not
make any decisions without the appropriate consultations with Congress.
The Department is also planning an independent study of FSA, the
Natural Resources Conservation Service, and other county-based agency
activities to look for additional opportunities for streamlining and
increasing the efficiency of our service to our customers.
Mr. Chairman, this concludes my prepared statement. I will be happy
to answer your questions and those of the other Subcommittee Members at
any time.
______
Prepared Statement of August Schumacher, Jr.
Mr. Chairman, members of the Subcommittee, I appreciate the
opportunity to review the work of the Foreign Agricultural Service
(FAS) and to present the President's budget request for fiscal year
1998.
1996--a record year for exports
Exporters of U.S. farm and food products posted another sales
record in fiscal year 1996 in both volume and value. Exports climbed to
$59.8 billion, a gain of more than $5 billion from the previous year.
This marked the second straight year of robust trade growth. In fiscal
1995, U.S. agricultural exports surged to $54.6 billion, up 25 percent
from 1994.
With the strong, back-to-back gains of the past two years, U.S.
agricultural exports in 1996 were up by some $19 billion or close to 50
percent since 1990. In an average week this past year, U.S. producers,
processors and exporters shipped more than $1.1 billion worth of food
and farm products to foreign markets, compared with about $775 million
per week at the start of this decade.
Fiscal year 1996 sales were up in two of the three major categories
of agricultural exports--bulk commodities (such as grains), and
consumer-oriented products (mainly foods and beverages). In the
intermediate products category (semi-processed commodities, live
animals and seeds), exports were off 4 percent from 1995's record
level.
The overall export gains out paced the more moderate growth in
imports, raising the fiscal year 1996 agricultural trade surplus to a
new record of $27.4 billion--up from $25.0 billion in fiscal 1995. In
the most recent comparisons among 11 major industries, agriculture
ranked No. 1 as the leading positive contributor to the U.S.
merchandise trade balance.
U.S. wood and fishery products didn't fare quite as well as
agricultural products this past year. Wood product exports were valued
at $7.1 billion, off 4 percent from 1995's record. Sales of edible fish
and seafood, at $2.9 billion, were down about 10 percent. However,
combined U.S. exports of agricultural, wood and fish products in fiscal
1996 rose 7 percent to a record-high $69.7 billion.
As you can see, we've experienced solid growth in export demand as
our product mix becomes more diversified and as we implement the trade
agreements that have improved market access. But we have much hard work
ahead of us. As domestic farm supports are reduced, export markets
become even more critical for the economic well-being of our farmers
and rural communities, as well as suburban and urban areas that depend
upon the employment generated from increased trade.
Today, U.S. agricultural exports support about 1 million American
jobs--with about one third of them in the farm sector. The other two-
thirds are off-farm in processing, marketing and transportation. These
jobs, on average, are higher paying than non-export related jobs.
Early forecasts of agricultural exports for the current year
suggest a more moderate sales pace. In December, USDA analysts
projected fiscal year 1997 exports at $56.5 billion, down about 6
percent from 1996, but still the second highest value on record. The
anticipated reduction mainly reflects increased foreign production of
grains and lower average prices for wheat and coarse grains. High-value
exports such as livestock, poultry and soybean products are forecast to
set another record this year.
Mr. Chairman, one of Secretary Glickman's goals for the Department
is to expand economic security for all of our farmers and ranchers. To
do that, we have to expand economic opportunities, and increasingly,
these opportunities lie overseas.
To help American agriculture tap into these opportunities, FAS
works to:
--identify constraints to U.S. exports and implement strategies for
overcoming these constraints;
--aggressively pursue reductions of trade barriers and trade-
distorting practices on the part of key trading partners;
--provide export assistance through expanding credit, market
promotion and market development beyond what the private sector
could do by itself;
--ensure that U.S. farmers and our research community have
information about areas of emerging foreign demand;
--defend U.S. agricultural interests by keeping U.S. policy views
before the international community;
--strengthen the export knowledge and skills of producers, processors
and exporters so they can compete more effectively in the
international marketplace;
--educate foreign buyers on the merits of U.S. products and how they
can be purchased; and
--support economic development efforts, especially in emerging
markets and developing countries.
Through these aggressive measures we are helping our farmers and
ranchers meet the competitive challenges both now and in the future.
Market Access and Development
Much of our recent export success can obviously be linked to the
combined effects of our trade policy initiatives, export assistance
programs, and the market development efforts of FAS working with our
agricultural cooperators and others, including participants in the
Market Access Program (MAP). For over 40 years, USDA and U.S.
agricultural producers and processors have had a unique partnership
that allows us to pool our technical and financial resources to conduct
market development activities around the world. When the Uruguay Round
Agreement was reached, our cooperators had, in many cases, already laid
the groundwork for export sales through their on-going market
development activities. And in many instances, use of our export
assistance programs, such as Public Law 480 and the export credit
guarantee programs, had served to introduce quality American products
to foreign buyers. So, in fiscal year 1996, the first full year of
implementation of the Uruguay Round Agreement, U.S. agriculture was
able to take advantage of the solid foundation built over the years and
post some notable gains.
Pork.--For the first time, Korea opened its market for pork, both
fresh and processed. As a result of the increased market access and
preparatory work to introduce U.S. pork by the U.S. Meat Export
Federation, U.S. pork suppliers now have a 30-percent share of the
Korean processed pork market, a 10-fold increase over the token 3-
percent market share for the United States in 1994. In addition, the
Round enabled U.S. suppliers to crack the Korean market for fresh/
chilled pork. The first U.S. container of fresh pork was shipped in
September 1996 and now the product is being shipped at the rate of a
container a day.
In the Japanese market, the U.S. Meat Export Federation has also
been helping to pave the way for U.S. pork exporters to take advantage
of increased access, despite stiff competition from Denmark and until
recently, Taiwan. Several years of trade servicing, and, more recently,
promotion directly to consumers have culminated in the United States
capturing a phenomenal 46 percent of the market for fresh and chilled
product valued at $950 million market.
Beef.--In Korea, where the U.S. Meat Export Federation has also
been active for many years, the U.S. beef industry has seen its export
volume rise more than 50 percent as a result of a successfully
negotiated bilateral agreement. In 1995, U.S. exporters shipped 91,000
tons of beef to Korea, capturing 63 percent of the market.
Rice.--Increased market access and the U.S. Rice Federation's
success in persuading Japanese rice traders and consumers of the
dependability of high quality U.S. supplies at competitive prices led
to more than $125 million in U.S. sales this crop year. This accounts
for almost half of the market--up from virtually zero in 1993.
Soybeans and meal.--Capitalizing on increased market access to the
Philippines, the American Soybean Association has been promoting the
use of soybean meal to poultry and swine producers. Over the past two
years, the value of U.S. soybean and product exports to the Philippine
market has grown 122 percent to $160 million.
In Indonesia, increased market access, reduced tariffs and the
American Soybean Association's promotion of soybean meal in poultry
rations helped to boost U.S. soybean meal exports from zero to 100,000
tons valued at $20 million over the past two years.
Cotton.--Under the sanitary and phytosanitary provisions of the
Uruguay Round, Guatemala changed a phytosanitary provision that had
increased the cost of U.S. cotton, making it uncompetitive with cotton
from other countries. To educate Guatemalan officials about the quality
of U.S. cotton and the thoroughness of USDA cotton inspection
procedures, FAS organized a training program for Guatemalan plant
health officials. Cotton Council International's sponsorship of trade
team exchanges and technical assistance have also helped U.S. exporters
capture 90 percent of the Guatemalan cotton market with exports valued
at $42 million in the 1995/96 marketing year.
Feed grains.--In the Philippines, U.S. corn exporters registered
about $66 million in sales for the 1995/96 marketing year, capturing 75
percent of this once-closed market. The U.S. Feed Grains Council played
a key role through its market development and trade servicing
activities.
Fruit.--The California Table Grape Commission's technical
assistance was invaluable to U.S. government negotiators in their
successful efforts to gain access to the Korean fresh table grape
market in 1996 and to resolve subsequent sanitary and phytosanitary
barriers. U.S. grape exports for the first 10 months of 1996 were
valued at $1.3 million and are expected to grow substantially in the
future as the U.S. industry works to develop the market.
The Agreement also opened the Korean market for oranges in 1995.
U.S. exporters registered sales of $5.3 million in 1995, a figure that
rose to $13.6 million in 1996. The U.S. agricultural office in Korea is
projecting significantly higher sales for 1997.
Processed Products.--Tariff cuts for processed products, in some
cases substantial, provided for in the Uruguay Round Agreement are
expected to help boost the United States' competitive position in
markets around the world. This is especially true in markets where
consumers are increasingly looking for convenient, ready-to-eat food
products. For example, Thailand will cut in half its tariffs on french
fries, potato chips and other processed potato products. The National
Potato Promotion Board, a MAP participant, has broadened its promotion
activities to higher-valued items such as speciality and battered/
coated fry products, resulting in significant new sales. For example,
U.S. frozen french fry exports to Thailand have shown steady growth,
increasing from $2.2 million in 1994 to more than $4.4 million in 1996.
These are just some of the gains that have come about as a result
of the Uruguay Round Agreement and the willingness of U.S. agricultural
exporters to devote the time and resources to develop these
opportunities--a task that may take years, but one that pays good
dividends when trade agreements are concluded. The Agreement represents
real progress toward creating a trading environment where markets, not
governments, determine the production and marketing decisions of
farmers and exporters. But this Agreement is only the beginning of a
process to achieve fairer trade--it is by no means the end. In 2000, we
will continue the reform process and will begin negotiations for
continuing the process of progressive reductions in support and
protection, building on the successes of the Uruguay Round.
Bilateral Trade Issues
We also realized notable accomplishments with some of our bilateral
trading partners. Working with other U.S. government agencies, we
encouraged European Union (EU) and Japanese officials to decide the
issues surrounding genetically modified organisms using scientific
arguments. As a result, the EU approved Round-Up Ready soybeans and BT
corn, and Japan approved seven new genetically modified products.
Working with USDA's health and safety agencies and the USA Poultry
and Egg Export Council, we were able to preserve our largest and
fastest growing markets for poultry, resolving disputes with Russia and
China. Following the discovery of Karnal bunt in the southwest U.S.
wheat crop, FAS, working closely with other USDA agencies, the U.S.
Wheat Associates and several state wheat commissions, overcame a
significant threat to U.S. exports by successfully negotiating with 33
countries and the EU on alternative phytosanitary certification
procedures to keep U.S. wheat exports flowing to these countries. These
markets traditionally take half of U.S. wheat exports, representing $2-
$3 billion in annual U.S. sales.
Overseas Offices
Overseas, FAS field offices support USDA programs and the U.S.
agricultural export drive in 95 locations around the globe. These
offices continue to function as the ``eyes and ears'' for U.S.
agricultural exporters, and the thousands of attache reports that they
prepare each year are now available to the widest possible audience
almost instantly via the Internet.
FAS has moved aggressively to adjust overseas staff in line with
the Department's Long-Term Agricultural Strategy. Over the past decade,
we have increased staff in the Pacific Rim and Latin America, and
decreased staff in Europe. In addition, the number of foreign national
staff employees working primarily on market development activities has
been increased by about 5 percent.
Domestic Outreach
Domestically, FAS expanded its outreach and information efforts to
educate U.S. businesses about the tremendous potential of the
international marketplace. A key part of this effort is the location of
export advisors at the State level--at the California, Colorado, and
Oregon State Departments of Agriculture and the Iowa State Office of
USDA's Farm Service Agency.
FAS has joined forces with cooperators and MAP participants such as
the American Hardwood Export Council and the American Seafood
Institute, and with local entities such as State departments of
agriculture across the country to sponsor export seminars for small and
new-to-export business. We have enlisted the local expertise of banking
institutions to help explain financing options, both those supported by
FAS and other financing tools, and have asked other Federal agencies
such as APHIS to help explain foreign country import requirements. The
goal of these and other activities is to excite small companies about
the opportunities opening to them in export markets and to educate them
to ensure their initial forays into international trade are successful.
Last July, FAS, in conjunction with the Farm Service Agency,
conducted outreach efforts in 47 states plus Puerto Rico. These
outreach efforts were an outgrowth of the Global Attache Conference
that was held July 15-19, 1996. The states hosted export events that
were attended by one of USDA's 50 diplomats serving as agricultural
attaches or trade officers worldwide. The events included farm and
plant tours, along with an FAS presentation explaining the importance
of agricultural exports to the national and local economy, global
opportunities, and USDA services and programs. Over 2,000 people
attended the events, bringing together producers, bankers,
agribusinesses, exporters, freight-forwarders, university officials,
and Federal, State and local government officials.
Cooperation and Development
In fiscal 1996, the Cochran Fellowship Program provided training in
the United States for nearly 700 participants from 44 countries. A
number of Cochran participants have furthered U.S. trade initiatives
by, for example, assisting in resolving sanitary and phytosanitary
issues in Korea, Mexico, and Indonesia. Participants from Russia,
Uzbekistan, Cote d'Ivoire and China purchased U.S. agricultural
commodities as a result of contacts made during their training. Many of
these purchases were first-time sales to new international customers
and could result in future sales as well. In addition, former Cochran
participants have influenced policy within their countries. The
privatization of state-collective farms and rural land mortgage systems
in Russia, for example, are being implemented by former Cochran
participants.
FAS' Scientific Cooperation Program supports efforts to improve the
competitiveness of U.S. farmers by developing new food and fiber
products; developing novel processing technologies for safe,
convenient, value-added products; and developing technologies that
create new products from residuals, byproducts, and wastes generated by
food and agricultural production and processing operations. So far in
this fiscal year, the Program has awarded 35 research projects and 15
exchange visits involving 40 different countries and representing a
wide range of U.S. universities and USDA agencies. Priority subjects
covered include trade barriers and phytosanitary issues, food safety,
exotic diseases and pests, and biological control.
Through our programs of technical assistance, research, and
training, we've conducted over 2,200 activities in over 90 countries
around the world. These activities helped to enhance the
competitiveness of U.S. agriculture, preserve our natural resources,
and assist countries in enhancing their national food security. As part
of our key role in the international effort to increase global food
security, FAS led the U.S. government's intensive interagency efforts
in preparation for the World Food Summit that brought world leaders to
Rome last November. In partnership with the U.S. private sector and
non-government organization (NGO) communities, we will continue to play
an important role by following through on the U.S. commitments made as
a result of the Summit.
Export Programs
Our export programs and services continue to play a key role in
supporting U.S. exporters in overseas markets. FAS constantly seeks to
refine and expand all of its export programs to meet changing demands
of the international marketplace and keep pace with the competition. We
are seeking continued budget support for these programs, which will
allow us to continue to improve these export tools and reach out to
additional potential exporters.
Our export credit guarantee programs provide assistance to U.S.
exporters in emerging markets where the financial markets provide
insufficient credit and international competitors are offering credit
or subsidized commodity prices. Exporters using GSM-102 and GSM-103
export credit guarantee programs registered sales totaling $3.2 billion
for 18 countries and 5 regional markets in 1996. Mexico, our third
largest export market, was the largest export credit guarantee program
last year with U.S. sales totaling $1.4 billion--or over 27 percent of
our exports to Mexico. Mexico's credit repayments are fully on
schedule. For 1997 we anticipate total GSM export credit guarantees to
be about the same or slightly higher than the fiscal 1996 level.
We have launched a new export credit guarantee program--a supplier
guarantee program--designed to help expand exports of processed and
other high-value products. Under this program, which is a component of
GSM-102, the Commodity Credit Corporation (CCC) guarantees a portion of
the risk of default by an importer on short-term credits, up to 180
days, extended by a U.S. exporter. A $50 million program has been
authorized ($30 million has been announced) for exports to Mexico, a
$10 million program announced for Guatemala, a $5 million program
announced for Jamaica, and a $35 million program announced for
Southeast Asia. Programs are also being developed for Latin and Central
America and the Caribbean. Since this is a new activity, we are
undertaking an extensive outreach effort to both overseas and U.S.
audiences to expand the understanding of this activity. We are
confident this program will help us further increase our exports of
these products.
Another new program to be carried out under GSM-102 authority will
be a facilities guarantee program. We anticipate publishing an interim
final rule this spring for this program.
In addition, our food aid authorities--Public Law 480, Title I and
Food for Progress--provided about 1.2 million metric tons of food
assistance with a program value of about $370 million to 27 countries
during fiscal year 1996.
In 1997, funding for Public Law 480, including the Titles II and
III grant programs, totals over $1 billion and provides about 3.2
million metric tons of commodity assistance. This amount is sufficient
to provide for anticipated programming needs and to more than meet our
2.5-million-ton commitment to the international Food Aid Convention.
Within FAS, we are seeking to improve the market development impact of
Title I, particularly by working with private sector entities as
authorized by the Federal Agriculture Improvement and Reform Act of
1996.
In the Market Access Program, we continue to hone our allocation
procedures, particularly with respect to participant contributions and
export performance, to target resources more effectively to those
programs offering the best prospects for success and to encourage
increasing private sector contributions. The success of these efforts
is in part reflected in the growth in U.S. participant and industry
contributions as a share of government costs. Participant and industry
contributions rose from 48 percent in 1994 to almost 54 percent in
1995, the most recently completed year. In addition, as directed by
Congress, 70 percent of the resources allocated for brand promotion has
been awarded to small companies or cooperatives.
Among the more promising developments in fiscal 1996 was the
virtual suspension of global export subsidies, which mask market
signals and distort trade. The restrained use of the Export Enhancement
Program (EEP) in 1996 allowed U.S. exporters to market their products
unaffected by government actions. We don't consider that current world
market conditions warrant the use of subsidies by anyone. In general,
U.S. supplies are relatively tight and we are exporting what we have
available without the need to use subsidies. Unfortunately, the
responsible restraint by the United States has been tested by renewed
EU subsidization, which began in September 1996. We must be ready to
protect our agricultural trade interests including the resumption of
EEP, if necessary, and, therefore, have requested full funding of the
EEP for 1998.
U.S. dairy exporters sold nearly 48,000 metric tons of cheeses,
nonfat dry milk and whole milk powder with the help of the Dairy Export
Incentive Program (DEIP) in fiscal 1996
challenges ahead
As you can see, 1996 was a busy year, and 1997 and 1998 promise to
be just as busy as we work to build prosperity for America's farmers
and ranchers. On the trade policy front, we have set our sights on
2000, when multilateral negotiations for continuing the process of
progressive reductions in agricultural support and protection will be
initiated. This year, we will begin to set the U.S. objectives and
goals for agriculture for those negotiations.
We will also continue to place high priority on the important work
done in international organizations that contribute to U.S. farm
exports. This includes science-based standard setting by the Codex
Alimentarius Commission, the International Plant Protection Convention
and the International Office of Epizootics.
Bilaterally, the accession of China to the WTO is a top priority.
We will work to ensure that we reach a commercially meaningful
agreement with the Chinese, and we must resolve several outstanding
sanitary and phytosanitary issues.
In addition to China, we also face both short-and long-term
sanitary and phytosanitary issues with other countries as well. We
continue to work with our trading partners through the WTO and
bilaterally to address these concerns and to ensure that such import
restrictions are based on sound science.
Another critical area is the trade treatment of biotechnology
products. New developments in biotechnology have the potential to
increase food production, lower farming costs, improve food quality and
safety, and enhance environmental quality. However, the benefits for
both farmers and consumers will not easily be realized without greater
transparency and efficiency in the approval process.
We also continue to address issues with our partners in the North
American Free Trade Agreement (NAFTA). The road is not always smooth,
and a number of contentious issues remain to be addressed. Work also
continues with Congress to develop fast-track legislation to begin the
process by which Chile will join the NAFTA.
With our export assistance programs, we face the constant challenge
of ensuring that our programs help exporters compete in the constantly
changing world marketplace. For example, we are currently reviewing our
operational requirements for the GSM programs, seeking ways to expand
the programs' benefits to U.S. agriculture. As I noted earlier, we
expect to launch another new export credit guarantee program--the
facilities guarantee program--later this year. This program is designed
to provide guarantees for the sale of capital goods and services that
are used for the improvement or establishment of agricultural
facilities in emerging markets.
We are seeking to improve the market development impact of Title I,
particularly through agreements with private sector entities as
authorized by the Federal Agriculture Improvement and Reform Act of
1996.
Our work with developing countries will also be challenging. These
countries are important to U.S. agricultural interests now and will
become even more so as we move into the next century. Two dollars out
of every five that U.S. farmers earn overseas come from developing
country markets, and these markets are where the biggest growth
opportunities lie for U.S. agriculture. So what are we doing to focus
on them? We will follow up the work begun at the World Food Summit. In
addition, we will continue to use all the tools available to us--the
Cochran Fellowship program, scientific exchanges and collaborative
research, for example--to help ready American agriculture for the next
century.
But in the end, we believe that open markets and expanded trade
offer the best and surest ways to economic growth and prosperity. But
just as we have targeted markets for export growth, so have other
exporters, and we will continue to face stiff competition around the
globe.
FAS recently completed an annual review of the export promotion
activities of 22 countries that account for our major competition. The
study found that just like the United States, many of our competitors
have announced ambitious export goals and are reorienting their export
programs to attract larger numbers of small-and medium-sized firms to
exporting. The EU and other countries assist their producers and small
businesses to develop foreign markets through activities similar to our
Market Access Program (MAP) and Foreign Market Development (FMD)
Program. Market promotion by EU countries is estimated at $350.2
million in 1995/96, with slightly less than half of that amount
provided by EU-member governments. The rest of the funds comes from
producer boards and other fees. Australia, Canada, and New Zealand have
strong national government promotion agencies and rely heavily on their
statutory marketing boards to carry out market development activities
for producers of specific agricultural products.
In addition to market promotion activities, the EU also carries out
an extensive subsidy program. Of the $9 billion budgeted by the EU in
1996 for export subsidies, over 85 percent was for exports of high-
value products such as fresh and processed fruits and vegetables, wine,
dairy products, and meat and meat products.
As our study shows, our competitors are not standing still. We in
the United States can not stand still either. Our Long-Term Trade
Strategy and the FAS Strategic Plan we are developing in accord with
the Government Performance and Results Act will provide the blue print
that we are and will continue to follow to identify and meet our export
goals. We must continue to work aggressively to meet the competitive
challenges facing us now and in the future.
fas budget request
The challenges I just described illustrate why I believe FAS must
continue to play a prominent role in export expansion. Today's budget
realities mean that government must be leaner and more efficient, but
the era of a responsive and responsible government is not over. While
there are things that government can't or shouldn't do, there are many
legitimate public needs that only government can meet. Whether it's
working to resolve trade disputes, supporting the American private
sector as it battles in export markets against foreign competitors
flush with funds from their national treasuries, or educating potential
exporters, FAS has a vital role to play.
Mr. Chairman, in the current year FAS is continuing the aggressive
approach to achieving our fundamental objective of increasing U.S.
agricultural exports by 50 percent by the year 2000. With the resources
provided by this Committee, FAS is expanding market development
activities, including the Cooperator Program and our domestic outreach
efforts, to facilitate the entry of small and medium sized producers
into the export market.
Overseas, FAS is moving aggressively to adjust overseas staff in
line with the Department's Long-Term Agricultural Strategy. We have
recently opened an office in Hanoi, a new Agricultural Trade office in
Indonesia, and an Agricultural Trade Office for the Caribbean region in
Miami, Florida. Within the next few months we will open an Agricultural
Trade Office in Moscow and an office on the U.S./Mexico border. By this
summer, we will have augmented American staffing in Tokyo, Seoul,
Geneva, and Moscow. The number of foreign national staff employees
working primarily on market development activities has been increased
by about 5 percent.
While maintaining necessary activities in mature markets, we will
continue to look for ways that we can strengthen USDA's presence in
areas of the world that are experiencing the most rapid development and
changes.
We believe the future offers continued opportunity for the
expansion of U.S. agricultural exports. Strengthening our ability to
compete globally has the direct payoff of increased farm income for
America's farmers and ranchers and the continued economic development
of rural communities.
The world marketplace is intense and our competitors are upping the
stakes. For example, in fiscal year 1996, FAS expenditures for all
activities: export promotion, trade servicing, FAS personnel and
operating costs--everything--was less than the European Union spent
that year just to subsidize its barley exports.
Mr. Chairman, the fiscal year 1998 FAS budget proposes a direct
funding level of $150.9 million and 885 staff-years, an increase of
$15.4 million above fiscal year 1997 funding levels. The activity
structure of the fiscal year 1998 FAS budget reflects implementation of
the Government Performance and Results Act and transition to a
performance-based management system. In this regard, FAS has adopted a
new budget activity structure that incorporates the policy objectives
of USDA's Long-term Agricultural Trade Strategy.
Significant proposals by policy objective include:
Strategic Outreach and Market Intelligence.--The 1998 President's
budget proposes that funding for the operating costs of the CCC
Computer Facility and other, related FAS information Resources
Management costs, which in the past have been funded through a
reimbursable agreement with CCC, shall be funded through the FAS
appropriation. This change will shift funding for these activities from
mandatory to the more appropriate category of discretionary spending.
Also, future funding for these activities will no longer be subject to
the annual limitation on CCC reimbursable agreements established by
provisions of the 1996 Farm Bill.
The total of the Computer Facility and other IRM costs is estimated
at $9.7 million in 1998. The budget provides increased funding of $4.0
million to partially meet these costs; the remaining $5.7 million will
be met through a reduction in marketing programs carried out through
the ATO's and increased cost-share contributions by participants in the
Cooperator Program.
Market Access.--The budget includes an increase of $500,000 to
implement a systematic process to review, identify, and catalog
technical barriers to trade and other technical requirements that limit
export opportunities for U.S. agricultural products in the top 30 U.S.
export markets. The review will lead to recommendations for overcoming
the identified barriers to expanded U.S. agricultural exports to these
markets These markets account for the majority of U.S. agricultural
export trade. The catalog will include codified and non-codified
information from the various governmental agencies regulating or
affecting imports in these major markets.
Long-term Market Development.--The 1998 President's budget proposes
that technical assistance activities carried out under the Emerging
Markets Program and authorized by section 1542(d) of the 1990 FACT Act
be funded through FAS appropriations rather than through CCC funds made
available to FAS under a reimbursable agreement. This change shifts the
costs of these activities from mandatory to discretionary spending, but
funding will remain at the currently authorized level of $10 million
annually, which corresponds to provisions of its authorizing statute.
The fiscal year 1998 budget also proposes to continue the Cochran
Fellowship Program at the fiscal year 1997 level of $2.4 million.
The budget also includes new provisions to address the difficulties
in accurately estimating and funding wage and price increases
associated with the operations of our overseas Counselor, Attache and
Trade Offices. First, the budget provides an advance appropriation of
$3 million for fiscal year 1999 to fund documented wage and price
increases and/or exchange rate losses incurred during fiscal year 1998.
Second, in conjunction with the advance appropriation, the budget
proposes that funds appropriated to FAS in fiscal year 1998 be
available for obligation through September 30, 1999.
export programs
Mr. Chairman, the commercial export programs we administer are
expected to grow in importance as the market-opening provisions of the
Uruguay Round Agreement are implemented. Our program proposals provide
the tools to meet these new sales opportunities, tempered by the need
to reduce Federal spending.
For the export credit guarantee programs, the budget proposes a
total program level of $5.7 billion. This includes $5.3 billion for the
GSM-102 program and $400 million for the GSM-103 program. As part of
the GSM-102 program, the budget includes $350 million for supplier
credit guarantees and $100 million for our new facilities financing
guarantees. We are continuously looking at ways to use this guarantee
authority to meet changing market needs.
To provide a partial offset for a high priority supplemental
appropriations request for the Special Supplemental Nutrition Program
for Women, Infants, and Children (WIC), a $50-million rescission of
budget authority is proposed for Public Law 480, Title. I. This
proposal will reduce the Title I program level by $60 million and
estimated commodity shipments by 200,000 metric tons. This proposed
reduction does not change the country allocations already announced.
For 1998, the budget provides a total program level of $990 million
for Public Law 480 foreign food assistance, a reduction of $57 million
from the revised estimate for 1997. The reduction in Public Law 480
funding proposed for 1998 will occur in the Title I program; funding
for Titles II and III will remain largely unchanged from 1997 enacted
levels. The 1998 request level is expected to provide total estimated
shipments of Public Law 480 commodities of 3.2 million metric tons,
unchanged from the revised tonnage estimate for 1997.
The 1998 President's budget shifts the budget and expenditures for
the Public Law 480 Title I credit sales program from the International
Affairs Function (Function 150) to the Agriculture Function (Function
350) of the Federal budget. Provisions of both the 1990 and 1996 Farm
Bills have redirected the focus of the Title I credit sales program to
place far greater emphasis on its market development objectives With
these changes, the importance and role of the Title I program in the
Department's overall long-term market development strategy has
increased. As a result, the Department strongly believes that the Title
I program should be managed and budgeted as a part of a consistent
package of agricultural export programs. Because all other USDA export
programs are included in the Agriculture Function of the budget, the
Title I program should be included in that Function as well. In
addition, this shift in Title I to the Agriculture Function will not
affect the overall level of U.S. foreign food aid efforts because Title
I program activities will continue to contribute to U.S. international
food aid commitments.
For the Market Access Program, the budget proposes a program level
of $90 million for fiscal 1998, the maximum program level authorized by
the FAIR Act, and unchanged from fiscal year 1997.
For our subsidy programs, the proposed levels for EEP and DEIP
allow for changed market conditions and provide the necessary tools to
respond to other governments' actions. Program activities in fiscal
year 1996 were much lower than in previous years due to world market
conditions. The budget provides $500 million for EEP, the maximum level
established by the 1996 Farm Bill and $89 million for DEIP in
anticipation of higher sales under this program.
This concludes my statement, Mr. Chairman. I will be glad to answer
any questions.
______
Prepared Statement of Kenneth D. Ackerman
Mr. Chairman and Members of the Subcommittee, I am pleased to
present the fiscal year 1998 budget for the Risk Management Agency
(RMA), which supervises the Federal Crop Insurance Corporation (FCIC).
It is my privilege to appear before you as Administrator of the newly
formed Agency.
Farmers today face a risk environment dramatically different from
that which existed a few years ago. In 1996, Congress enacted the
Federal Agriculture Improvement and Reform Act (1996 Act), which is
designed to strengthen the Federal crop insurance program by giving
American farmers much improved and expanded risk management tools, as
well as education programs that will enable them to make more informed
decisions. However, this Act and previous legislation changed the
landscape of American agriculture by phasing out the traditional
Federal programs that have provided a safety net to farmers for price
and production risks over the past 60 years. Deficiency payments and ad
hoc disaster aid have been eliminated, and a variety of other price and
production assistance programs have been significantly reduced. To fill
this void, producers today must take active steps to reduce their
agricultural risks. They must rely on an increasingly wide and
sometimes confusing array of risk management products being offered
primarily by or through the private sector.
RMA plays a pivotal role in fulfilling the mandates of the 1996 Act
while assuring that American agriculture remains solid, solvent and
globally competitive into the 21st century. To accomplish these tasks,
RMA intends to refine existing products, create innovative, cost-
effective tools, educate the public, and expand its partnerships with
the agricultural community.
organization, size and location, and field structure
Provisions of the 1996 Act required the Secretary to establish an
independent office responsible for supervision of FCIC, administration
and oversight of programs authorized under the Federal Crop Insurance
Act, and development of programs involving revenue insurance, risk
management savings accounts, and other programs designed to help
producers manage risk and support farm income. Consequently, RMA was
established as an independent entity in April of 1996. The more than
22,000 county crop programs are formulated, implemented, and monitored
in coordination with the RMA headquarters office located in Washington,
D.C., and the national operations office in Kansas City, Missouri. The
programs are administered in the field through ten Regional Service
Offices and six Compliance Offices. As of September 30, 1996, there
were 536 employees in RMA.
initiatives and goals
Revenue Insurance Products
In fiscal year 1996, RMA witnessed a strong response from commodity
groups, producers, and insurance agents to revenue insurance products
which are designed to help producers manage both price and yield risks.
In the post-1996 Farm Bill environment, American farmers need such
programs to manage risks with confidence and security. The demand for
these products highlights the importance of private sector alternatives
in the risk management environment and reflects producers' awareness of
their individual responsibilities in managing risks.
For fiscal year 1998, RMA intends to improve the safety net for
farmers by seeking authority to make revenue insurance available
nationwide. RMA anticipates this will increase purchases of risk
management tools by farmers, resulting in greater Federal outlays. To
be cost neutral, the additional delivery expenses paid from the
discretionary fund will be offset by reducing the reimbursement rate
used to determine administrative expenses paid to reinsured companies.
RMA also proposes to reduce the overall program loss ratio to offset
the mandatory account costs of producer premium subsidy and a portion
of the expense reimbursement.
Risk Management Education
In the new risk environment, RMA must not only provide producers
with new tools to manage their risks, the Agency must also educate
producers on the wide array of risk management tools which are
currently available. In the past 3 years, Congress has adopted two
provisions mandating the Department of Agriculture to establish a crop
insurance/risk management education program geared toward orienting
farmers about the wide array of risk management products.
Accordingly, RMA, in conjunction with the Cooperative State
Research, Education and Extension Service and the Commodity Futures
Trading Commission, has developed a plan to conduct and evaluate a risk
management education program based on a coordinated team effort of
Federal agencies and private groups. Our goals in pursuing this
educational effort will be to (1) develop training programs for farmers
which integrate basic information on risk management from all relevant
sectors (such as insurance, futures and forward contracting) and (2)
provide a source of up-to-date information on new risk management
products that farmers and agricultural advisors across the country can
use when confronted with decisions, questions and solicitations. The
delivery system for this program will rely primarily on the private
sector, including not just the crop insurance industry, but also the
futures industry, the farm lending community, and farm and commodity
organizations. Costs for this initiative will be paid to the maximum
extent possible by the FCIC insurance fund.
Renegotiation of Standard Reinsurance Agreement
Given the dramatic changes to the crop insurance program and the
diverse and expanded role of RMA, we elected this year to renegotiate
the Standard Reinsurance Agreement (SRA) which governs the relationship
between RMA and the 17 private insurance companies participating in the
reinsurance program. Since 1994 when the SRA was last renegotiated, the
crop insurance program has more than doubled in size in terms of
policies sold, acres covered, and premiums collected. Today, crop
insurance sold and serviced through reinsured companies accounts for
nearly 74 percent of the total number of policies and 89 percent of
total premiums.
Renegotiating the SRA will allow RMA to systematically resolve a
wide range of issues. For instance, preliminary analysis suggests that
the current SRA formula provides participating companies with too large
an opportunity for financial gain compared with the underwriting risks
which they bear. Questions have been raised regarding the methodology
of providing administrative expense reimbursement (AER) to
participating companies. Preliminary findings by the General Accounting
Office suggest that although the current AER is set at 29 percent of
net book premium, companies are actually spending between 25 and 27
percent of net book premium on actual program-related administrative
expenses. The budget contains a discretionary spending reduction of
approximately $53 million in AER payments by proposing both a lower AER
and providing for 10.5 percentage points of the reimbursement rate to
be discretionary spending.
fcic fund
Under current law, the budget for the FCIC Fund proposes an
increase of $14 million in premium subsidy for policies with buy-up
coverage. For catastrophic risk protection, an additional amount of $7
million in premium subsidy over the 1997 crop year will be required.
This recognizes that indemnity payments for crops planted in the 1997
crop year will continue to be paid in the 1998 fiscal year. Under
proposed legislation, there would be an additional estimated increase
in buy-up coverage subsidy of $25 million.
Under current law, the budget also includes funding for $257
million in mandatory account spending to reimburse the reinsured
companies for the delivery of limited and buy-up coverage. This is a
decrease from 1997 due to the legislative mandate that a portion of
administrative expenses paid to the reinsured companies be transferred
to the discretionary account. Under proposed legislation, it is
estimated that an additional $10 million in administrative
reimbursements to reinsured companies would be required.
administrative and operating expenses
Under current law, discretionary account expenses have increased by
$207 million from the fiscal year 1997 level. This increase is a result
of sales commissions estimated at $203 million which will be reimbursed
to reinsured companies and paid from discretionary funds; increases of
$465,000 for a portion of the estimated pay increase and annualization
of the fiscal year 1997 pay raise; and $4 million for an increase in
full-time equivalency positions. Under proposed legislation, the
discretionary portion of the administrative reimbursements paid to
reinsured companies, no longer just for sales commissions, is estimated
at $150 million which reflects a savings of $53 million.
Staff levels for RMA have decreased dramatically in recent years as
the program has grown in size, scope, and expectations. Overall staff
resources, including administrative resources from the Farm Service
Agency, have been reduced by more than 20 percent since 1993. The
modest growth in staff positions proposed here is intended to adjust
for recent losses and to improve our ability to service participating
private sector companies. Funding for implementation of the reform
costs for the new and expanded programs will increase to assure that
the programs are implemented as expeditiously as possible.
In closing, I appreciate the opportunity to outline the many
positive initiatives that RMA has taken to improve the crop insurance
program and to discuss some of the programs being proposed. Mr.
Chairman, this concludes my testimony. I will be happy to answer any
questions that you may have.
Expansion of Crop Insurance
Senator Cochran. I notice that in your prepared statement,
on page 2, you make the observation that you have expanded and
improved programs to help producers manage their price and
production risks. My question is, how have you done that?
Mr. Smith. Mr. Chairman, much of the work in this area has
been done with our risk management programs and our revenue
insurance-type programs. I would like to ask the Administrator
of our Risk Management Agency, Mr. Ken Ackerman, to expound on
that.
Mr. Ackerman. Thank you, Mr. Chairman.
Very briefly, in the past 2 years, we have expanded the
traditional Federal Crop Insurance Program from simply a
production risk-based program to now, in many parts of the
country, include price risk, as well, through revenue insurance
products. There are three basic revenue products that are now
being offered in different areas of the country on an
experimental basis: crop revenue coverage, income protection,
and revenue assurance.
We anticipate that, over the next several years, sales of
these products will increase probably nationwide. We have
submitted a legislative proposal to that effect.
Expense Reimbursement in Discretionary Funds
Senator Cochran. Is there a request now pending in the
Congress from the administration to provide up to $200 million
additional funding for this increased protection for producers?
Mr. Ackerman. The request for $200 million is an existing
request. It is not new money. The change this year is that for
1995, 1996, and 1997, the delivery expense of reinsured
companies for delivery of Federal crop insurance was paid for
fully on the mandatory side of the budget. This year, a portion
of the delivery cost is funded from the discretionary side. The
split is part of a compromise, essentially, that was worked
into the Crop Insurance Reform Act of 1994.
We have proposed a reduction in that amount to help ease
the burden. We are proposing that the expense reimbursement to
the companies be reduced from 28 percent of premium down to
24.5 percent. That would reduce the number you referred to from
$200 million down to about $150 million.
Senator Cochran. Thank you.
Farm Credit Funding Levels
Mr. Secretary, on page 3 of your statement you mention the
trend is emphasizing guaranteed loans to farmers and, I am
assuming, in order to get away from direct lending. My question
is, Why do you request less money for the guaranteed loans in
the next fiscal year's budget than the current fiscal year and
more money for direct ownership loans?
Mr. Smith. One of the focus areas of our direct ownership
loans is beginning farmers and socially disadvantaged farmers.
We are focusing the direct loans in that area. Our guaranteed
loan program is the major growth area and one of the areas in
which we have historically experienced the fewest delinquency
problems.
I would like to ask Randy Weber, the Acting Administrator
of the Farm Service Agency, to expound on that, as well.
Senator Cochran. Randy, go ahead; proceed.
Mr. Weber. Yes, Mr. Chairman.
In 1997, we have a subsidy to support direct farm ownership
loans of $28 million. Under the 1998 budget, we are requesting
subsidies that would give us authority to loan approximately
$31 million--a slight increase there. However, under the direct
farm operating loans, the projected loan level is down about
$20 million from this year.
The activity with regard to 1997 is quite brisk right now,
and we are likely to run out of direct operating loan money
earlier this year than we normally do. We are looking right now
at sometime in May.
Senator Cochran. Will there be a supplemental request made
by the administration for that account?
Emergency Funding
Mr. Weber. We are working on that effort right now, yes.
Senator Cochran. I have one other question, then I am going
to yield to my colleagues for any comments or questions that
they may have. On page 7 in your statement, Mr. Secretary, you
say that no funds are requested for the Emergency Conservation
Program. This is a disaster assistance program. That caught my
eye, in view of the fact that we have had a lot of disasters
that have occurred, that have affected agriculture producers.
I notice you suggest that there is a $5.8 billion
contingent reserve that the administration wants to establish
for emergency requirements. Now, I am concerned about that part
of the request. I wonder how we maintain our accountability to
the taxpayers in the appropriations process if we make
available a huge amount of money to the administration without
any guidance or restrictions as to how it is spent. The
President can just declare an emergency or declare that this
was the result of a disaster and spend it for whatever the
administration wants.
Under this proposal, how would we guarantee that some of
that $5.8 billion will go to agriculture producers or
landowners under the authority of existing statutes that
provide for these programs?
Mr. Smith. Mr. Chairman, historically, for the Emergency
Conservation Program, the budget has not asked for funding in
advance, because it is very difficult to predict what
experience we are going to have in the area of a natural
disaster. Historically, this program has been funded through
supplementals.
In fact, we have an ECP supplemental request that has been
submitted to Congress for $20 million, plus a contingency
reserve of $17 million, to accommodate current need. So the
fact that we do not have funding proposed in the 1998 budget is
consistent with this past practice.
Under the proposed $5.8 billion contingency reserve for
emergency funding requirements, we have the Emergency Farm Loan
Program that is part of our safety net, in addition to ECP. And
there are continuous needs that are difficult to predict in
advance for a particular program.
We are currently experiencing considerable problems with
livestock in the Dakotas and in Minnesota due to the weather
damage there. Historically, our largest programs have focused
on the commodity side, in terms of a safety net.
Different disasters have different characteristics, and in
order to have broad discretion in how to deal with these
disasters, we are proposing to have a contingency fund that is
not necessarily earmarked for a specific use.
I would like to ask Mr. Kaplan if he would care to expand
from the budget perspective on that.
Senator Cochran. Mr. Kaplan?
Mr. Kaplan. My understanding is that OMB would talk to the
appropriate committees of Congress before any money is released
out of that emergency fund, so that you would have some impact
on how the money is spent.
Senator Cochran. Is there any predetermined percentage that
would go to any kind of disaster?
Mr. Kaplan. No, sir.
Senator Cochran. I see. Well, that is not going to happen,
is it?
Mr. Kaplan. No, sir.
Senator Cochran. I do not think it is going to happen.
[Laughter.]
Senator Burns. Do not be so optimistic. [Laughter.]
FSA County Employees
I guess I would just like to submit my statement, Mr.
Chairman. I do not have very many questions, other than the
fact that we sort of have a concern among our farmers in
Montana, of trying to make your farm service agent in the local
city an employee of USDA, rather than a member of the
committee. They are a little bit nervous about that. Are you
still going forth with that program?
Mr. Smith. Senator, it is one of the proposals that we have
under consideration within the Department. When we reorganized
in 1994, and we pulled several functions, such as the old
Farmers Home programs and the old ASCS programs into the same
office for administration, we moved Federal employees at the
county level and non-Federal employees into the same offices.
Under the law, we cannot have a non-Federal employee
supervising a Federal employee.
Senator Burns. I think that is the best of all worlds, just
personally speaking.
Mr. Smith. And we now have functions at the local level
that are being administered by both Federal and non-Federal
employees.
In order to gain efficiency in terms of our service centers
and be responsive to the needs of our producers in those areas,
we are looking at this proposal as one way to gain that
efficiency, by having just one category of employee right down
to the county level.
Use of CRP Funds for Crown Butte
Senator Burns. One area that really caught everybody's
attention is using CRP funds for Crown Butte. Anybody want to
make a comment on that--where that is?
Senator Bumpers. Yes; I would like to comment. [Laughter.]
Senator Burns. I suspect you would.
There is a lady out there that owns that land where you do
not want her to mine. She would kind of like to have the same
amount as the gold company got. She wants $65 million, too. Do
you want to take that out of CRP?
Senator Cochran. Direct your questions to the witnesses.
Senator Burns. Oh. [Laughter.]
Where is that? I have a hard time justifying that with my
farmers. This was a decision that was made by this President.
And I do not feel that that money should come from American
agriculture or be taken out of agriculture to justify this
action.
Mr. Smith. Senator, I am not an expert on budget
reconciliation and budget caps and things, but it is my
understanding that the decision to use part of the CCC funding
for CRP will in no way impact our ability to enroll the acreage
that is authorized under the CRP program. We do have Dennis
Kaplan here as an expert, and I would like to ask Dennis if he
has a view on this.
Senator Burns. He is about 10 degrees off plumb.
[Laughter.]
Mr. Kaplan. I am not an expert by any means. But all the
proposal would do would be to delay the signup of 2 million
acres for 1 year. Funds would not be taken out of CRP. Instead,
the signup of 2 million acres would be postponed from 1997 into
1998. No money is going to be taken out of farmers' pockets
under the proposal.
Senator Burns. OK. Well, I do not think any of it should be
used. And I would be very disappointed if it was diverted from
the CRP to buy out this mine to keep them from mining up there.
I find this very interesting the way they have proposed to do
this.
Announcement of Accepted CRP Acres
Another thing in your CRP--of course, you all are not in
the policy business, but on the CRP thing, do you think you can
complete all of the applications for CRP by the middle of June
or the end of June that are coming in now? Can the completions
be made?
Mr. Smith. Well, we were very pleased at the work of our
county offices and the cooperation that we have had between the
Natural Resources Conservation Service employees and the FSA
employees at the local level, to get the producers in and get
their bids into the system during this signup. And we feel
pretty sure that we will also be able to go through the
analysis within the allotted time period and announce the
accepted acres before the middle of June.
I would like to ask Randy to just give us an update as to
what the agency foresees.
Mr. Weber. Senator Burns, this week and last week, the
counties along with NRCS are looking at the documents they
received and are completing. We had some States in which they
had a register after the 28th. So we have spent last week
finalizing all of those documents.
Everything seems to be on track right now, and we are
hopeful that all of the records will be submitted to Washington
at the end of next week. We then will begin the review process.
At this point, we currently are having some problems in North
Dakota and Minnesota because of the weather, and we may have
some slight delays there. But we generally think we are going
to be able to meet the deadline, and hope to have announcements
out to farmers before June 15.
Senator Burns. Mr. Weber, I do not have to tell you that
this is really time sensitive.
Mr. Weber. We fully understand that.
Senator Burns. We could lose a crop.
Mr. Weber. Yes.
Senator Burns. We could completely lose a crop in the State
of Montana and the northern tier, especially on our spring
grains. And I think the way you are approaching this thing is
going to, as far as the conservation acres, you are going to be
disappointed in the fact that there is a lot of these people--
the intention to take some of those marginal acres out of
production, which I fully support, I think we are going to find
just the opposite may happen, whenever we see the bids and the
acres taken out and the way they can track or chop up a man's
farm.
I hope I am wrong. I just hope I am wrong. But you have
probably heard that before, though.
Mr. Weber. We have heard those concerns. But the
preliminary data that we have gotten in is very good.
Senator Burns. Well, I am very hopeful then. I am going to
give you the benefit of the doubt.
Mr. Weber. I am hopeful that your concerns are not going to
be a reality.
Senator Burns. Well, I hope you are right and I hope I am
wrong. And I still stand corrected. But I am just afraid it may
go the other way. It sure could awful easy. And I think we are
time sensitive. And I will tell you, I will fight like a
bearcat to take any CRP out of agriculture to pay a bunch of
miners on that little deal. I will just fight like a bearcat. I
ain't going to die in the ditch, but I will fight.
And here is my statement. Thank you.
Prepared Statement
Senator Cochran. Senator, we will make your statement part
of the record in full. Thank you.
[The statement follows:]
Prepared Statement of Senator Burns
Thank you, Mr. Chairman. I appreciate you calling this
hearing today.
We have all, just in the past few days, returned from our
States. If you had any kind of break like mine, I am sure you
got an earful of the concerns which are facing our farmers in
the field this year. Many of the concerns I heard about, were
based on the actions of the Farm and Foreign Agriculture
Services.
The concerns which were shared with me in various locations
around Montana, dealt with the way that the Department of
Agriculture deals with them as producers. These concerns are
based upon what the producer perceives as the future for his
way of living. Our American agricultural producer is concerned
about what they see as the trend in the Department of
Agriculture to remove their local control over a variety of
issues and circumstances.
The chief among the questions asked of me, during the past
two weeks, was why does the Department of Agriculture want to
close their local Farm Service Agency office. Although I am not
sure that any in Montana have been slated for closure, the word
on the street is that there are offices that are going to
close. With this in mind the local person begins to get the
idea that it is their office. I must admit, I am sure that
there are areas in this country where we have offices very
close together and that there is a way that we could remove
some duplication. However, in rural western America, I am not
sure that this is what we need.
When people have to drive hours as it is to reach their
local USDA office, they cannot understand why they will be
asked to drive even further in the future. It is their
understanding that you are there to help them and to make their
life in relation to farm programs easier.
I have stated for all the years that I have been in this
town that if we are going to reduce the Federal work force,
that the first and most logical place to look is in Washington.
We have an abundance of personnel downtown here who duplicate
the jobs of others in the workplace at the Department of
Agriculture.
One of my own personal key concerns deals with the thought
that the Department wants to make the local Farm Service agent
a Federal employee, and take control of that person out of the
local decisionmaking process. These people are, at this time,
obligated to answer to the local committee and as such really
respond to the needs of the local citizenry. If these people
are made Federal employees, they lose this incentive to respond
to the needs of the people in their local community. We are
left with another level of bureaucracy in a time when we
already have too much of it. The role of this government, in
these times, should be to make government more localized for
the agricultural producer.
I have heard concerns also about the manner in which we are
marketing our agricultural products in the foreign marketplace.
The producer is concerned about the way in which our
competitors are able to get the upper hand on us in so many
deals. One thing that Congress heard loud and clear last year,
was that get government out of our daily operation and we will
be able to make a decent living on the farm. They also asked
that we provide them with the tools to enable them to market
their production in the world marketplace. Well, Congress did
that, but the producer is still concerned about the way that
their products are being marketed in the global economy. I
share many of their concerns.
Finally, we come to the issue of crop insurance. The
producer in Montana is well aware of the perils that face them
on a daily basis. Because of this understanding, they have been
willing participants in the program. They have worked with my
office and with the Federal Crop Insurance program to implement
changes for the benefit of all producers in this country. They
still see a need for additional changes, but overall they are
pleased with the performance of the program.
Mr. Chairman, I look forward to listening to the panel
today, to hear about what they foresee of the coming year in
their program areas. I hope that they will provide the
committee with some explanation of the reasoning for the
changes that they are instituting at both the national and
local levels.
Thank you, Mr. Chairman, I will have some questions later
for the panel, and I may submit some afterward for written
answers.
Crown Butte
Senator Cochran. Senator Bumpers.
Senator Bumpers. Mr. Chairman, I wanted to ask Senator
Burns, is the woman you refer to, is she, the landowner,
expecting royalties?
Senator Burns. Yes.
Senator Bumpers. Do you know how much?
Senator Burns. I do not know how much.
Senator Bumpers. I would be willing to vote to give her the
same amount of royalties you vote to give the United States
from mining on Federal lands every year.
Senator Burns. I would do that. We can make a deal.
Senator Bumpers. That is zero.
Senator Burns. I will take it. That is more than I have got
now.
Senator Bumpers. I am talking about the woman who owns the
land, expecting royalties. Do you know what her contract
provides for?
Senator Burns. We will talk about this over coffee
sometime.
Senator Bumpers. You have always voted to keep the 1872
mining law going, which allows the biggest mining companies in
the world to mine 3 billion dollars' worth of gold a year and
not pay the Federal Government a dime for it. So I thought we
might treat this woman the same way.
Senator Cochran. Senators, I am going to call the committee
to order. [Laughter.]
Senator Bumpers. Mr. Smith, how many Under Secretaries do
we have down there that are acting? [Laughter.]
Senator Burns. About one-half of them.
Senator Bumpers. I believe there are three Acting Under
Secretaries and one Acting Assistant Secretary.
On the Conservation Reserve Program, Senator Burns has
raised a concern that all of us share who come from
agricultural States--about using Conservation Reserve money.
Now, I want to get rid of Crown Butte Mining Co. very badly. I
will do almost anything, short of mayhem, to keep them from
mining that land outside Yellowstone. And my staff tells me
that the effect of this would be to delay the use of CRP money
by 1 year--$65 million for 1 year--is that correct?
Mr. Kaplan. Yes, sir; that is correct.
Senator Bumpers. You are the expert on this, Mr. Kaplan?
Mr. Kaplan. Again, I am not an expert, but I am involved a
little bit. [Laughter.]
Tentative CRP Signup Results
Senator Bumpers. Let me put it another way. How many acres
would we sign up under CRP this year that we would not be able
to sign up if we give $65 million to get rid of Crown Butte?
Mr. Kaplan. Our budget has proposed to sign up 19 million
acres this year. So we would only sign up 17 million acres
rather than the 19 million that is in the budget.
Senator Bumpers. Of the 19 million you are prepared to sign
up this year, 14.7 million of that is old acreage, is it not--
contracts that are expiring? I think that is what you said in
your testimony, Mr. Smith.
Mr. Smith. The latest information, which became available
after I submitted my statement, shows that about 18 million of
the 26 million acres that have been offered are currently
enrolled.
Senator Bumpers. So the effect of this would be--I mean
there is some damage to the farmers, who may be anticipating--
you have got 20 million--you said in your testimony also that
there are 20 million acres in applications right now to take up
this 19 million that you propose to enroll, is that right, Mr.
Kaplan? So you already have enough applications to fulfill the
19 million?
Mr. Kaplan. Yes, sir.
Mr. Smith. We now have approximately 26 million
applications as a result of the signup.
Senator Bumpers. You do not mean applications?
Mr. Smith. I am sorry?
Senator Bumpers. You do not mean 26 million applications;
you mean 26--is that what you are saying, 26 million
applications?
Mr. Smith. No, sir; we had 26 million acres bid during the
signup period, of which about 18 million are acres that are
currently in the CRP. And those contracts will be expiring
September 30 of this year.
Senator Bumpers. Maybe I should submit a question in
writing to you, asking for detailed information on what the
effect of taking $65 million--is it your information that we
would use that $65 million this year to cut this deal with
Crown Butte?
Mr. Smith. My statement is that we do not believe that it
will affect our ability ultimately to enroll the full 36.4
million acres in the CRP over the duration of the program. I
will point out that the 26 million acres that were bid were out
of a pool of about 230 million eligible acres. There were about
230 million acres that we felt were environmentally sensitive
and eligible to be offered by producers into the CRP. So out of
that pool we had 26 million acres offered.
Now, as we go through and evaluate these offers, the
acceptable offers may yield fewer than the 19 million acres
that we had in the budget baseline. If the acceptable offers
fall below the 17 million acres, there would be no impact from
a decision to use part of the CRP funding for the mine.
If the acceptable offers were to reach above the 17
million, it would simply delay the enrollment of the additional
acres for 1 year.
Senator Bumpers. What is the average cost per acre on CRP
per year?
Mr. Weber. It currently runs about $50 an acre.
Senator Bumpers. $50 an acre per year?
Mr. Weber. Yes; that is what the annual rental payments
are.
Senator Bumpers. Now, Mr. Smith, you stated in your
testimony that you have a new program of allowances on CRP,
which you think will reduce your cost by $25 million. Do you
remember saying that in your testimony? For example, haying and
grazing; you allow haying and grazing.
Mr. Smith. Yes, sir.
Senator Bumpers. How will that reduce the cost of the
program?
Mr. Smith. Normally, when we implement haying and grazing,
it is on the basis that the producers forfeit a portion or all
of their CRP payment. So this would be a savings, to the extent
that we permitted the haying and grazing.
Market Access Program
Senator Bumpers. OK. You may or may not know that the old
Market Promotion Program was one of my favorite programs. I
tried to kill it for 6 years and have not gotten it done yet.
Why did you change the name of the Market Promotion Program to
the Market Access Program?
Mr. Smith. Let me ask----
Senator Bumpers. I want to ask everybody why you change the
names of all these programs every 6 months. [Laughter.]
Just about the time I get used to the acronyms, they are
all changed again.
Go ahead, Mr. Schumacher.
Mr. Schumacher. Senator, thanks for your question.
We have made quite a few changes in that program over the
last 2 or 3 years--working with Congress. We basically
eliminated most of the funding for the large branded companies.
We are phasing them out. Next year there will be no money
provided to any firm that does not meet the SPA guidelines.
This year no money is provided directly, and we have phased
down the indirect funding to about 4 percent of the total
program. It is rather a different program, focusing on
cooperatives, medium and small enterprises, to meet some of the
vigorous competition that is coming from Europe and even the
southern cone, in Chile and other areas.
Senator Bumpers. Mr. Schumacher, let me give fair warning.
I am not going to get into it now, because you really have not
had enough experience under the new mandate of Congress on this
program. Senator Bryan and I, last year--you are operating
under the amendment that we got adopted last year--of making
people put up--cost-share. Also, limiting it to small
businesses and co-ops and things like that.
In Mr. Smith's testimony, he stated that the program had
been very effective. But I think I got the impression that it
has been effective in dispersing the money. What I want to know
is how effective is it in accomplishing the goals that we have
set for spending the money? In other words, how is it
enhancing--if it is in fact enhancing--our exports? And how is
it helping small business people to export?
Now, as I say, you have not had enough experience yet to
really give a good answer to that question. But we oftentimes--
these hearings are not only to review the budget, but they are
oversight hearings to determine how well these programs are
working so we can set the budget. But, next year, I would like
to see some definitive numbers on what we are getting for our
money. Are we actually increasing exports? And is this
program--how is this program working? And is it effective, so
far as increasing exports are concerned?
U.S. Agricultural Exports
Which brings me to my next question. Why--you state that
you expect exports to be down this year, from $59 billion--you
think it is going to be down around 6 percent--is that about
right?
Mr. Schumacher. $56.5 billion is the current forecast.
Senator Bumpers. From $59 billion?
Mr. Schumacher. $59 billion.
Senator Bumpers. And you state that one of the reasons for
that is because of the increased yields in crops that some of
the people that we export to are experiencing; is that correct?
Mr. Schumacher. Many of our importing countries had very
good crops--Argentina, Australia--have record crops on wheat.
We had a light crop on wheat last year. Prices have come down.
Senator Bumpers. Well, how much impact is the increased
price of commodities having, if any?
Mr. Schumacher. I do not understand the----
Senator Bumpers. Well, let me--corn and wheat are both
considerably higher now than they were, say, 1\1/2\ or 2 years
ago. Is that a factor in reduced exports, or is it just the
fact that these other people are doing better in their own
agricultural programs?
Mr. Schumacher. On the----
Senator Bumpers. The importers.
Mr. Schumacher. On the bulk, we have come down on wheat and
corn in price and some volume. We had record corn exports--55
to 56 million tons in 1994-95. But then the prices, of course,
as you recall, were very, very high in many of the bulk
commodities last year. Price had quite an effect reaching the
$59.5 billion export level. We originally forecast a drop in
1997 mainly on the bulk, with value-added moving very, very
nicely--mainly meat exports.
We have increased our projection to $56.5 billion because
of the expected increase in value-added. And we are looking
forward to seeing how we make out with the difficulties that
Taiwan has had in its aftosa outbreak in Japan. We may see an
additional increase as our pork industry gears up to meet the
Japanese demand.
So we think we are doing well--very well--in value-added.
That is sort of like the Energizer Bunny. It just keeps going
and going and going. But the bulk has been more volatile.
There is one issue, though, I would like to bring to the
committee's attention. And that is, as we look at our corn and
soybean exports, one thing we have not focused on as much as I
think we should is the amount of corn and beans that is going
to meat. Let us assume we will do 48 million tons this year of
corn. But we will probably do another 9 or 10 million tons in
corn, through poultry, pork, and beef. And that was not there
when we hit our record exports of corn, of 61 million tons, in
1981.
Senator Burns. Do you want to explain that again?
Mr. Schumacher. Yes, sir; this year we are forecasting 48
to 49 million metric tons of corn to be exported. In 1980-81,
we hit our record of 61 million metric tons of corn that were
exported from the United States. But back then, we were not
exporting the amount of meat that we are exporting now.
Senator Burns. Oh, OK.
Mr. Schumacher. So if you look at the amount of meat that
is going out, factor in the standard conversion ratios, we are
hitting 9 or 10 million value-added tons that is staying here
creating jobs and employment. This then effectively brings the
total amount of corn fairly close to that record, and will
exceed that if we continue the very strong meat exports that we
have been seeing in the last few years. We expect those----
Outlook for Meat Exports
Senator Bumpers. Meat exports are climbing?
Mr. Schumacher. They are doing very well, with poultry
particularly. Pork is going to do even better, with the
opportunities in Japan. And the Meat Export Federation, in
large part due to the money from the cooperators and the MAP
Program, is going to continue to hit very, very nice markets in
Japan, Korea, and many other countries as well, as they do
very, very well in those markets.
They really have done a wonderful job in meeting the food
safety issues in Japan, and are very well positioned in
promoting American meat as extremely safe, very high quality,
with timely delivery, to the specifications the Japanese like
to eat.
Food Aid to North Korea
Senator Bumpers. Just two quick questions, Mr. Chairman.
Are you prepared, if the President gives the order, to--are
we prepared to ship commodities to North Korea? Is that
something that is on the front burner with you all?
Mr. Schumacher. The Commerce Department has permitted an
order, up to 500,000 tons, to Cargill, if they were to have a
commercial sale. Yesterday we heard that there was a barter
arrangement for American wheat to North Korea.
Senator Bumpers. With Cargill?
Mr. Schumacher. With Cargill.
Senator Bumpers. 500,000 tons?
Mr. Schumacher. Well, 500,000 tons is the ceiling. We
understand a modest amount was----
Senator Bumpers. Up to 500. Well, I think the Commerce
Department has only authorized up to 500,000, is that right?
Mr. Schumacher. That is right.
Rice Exports to Japan
Senator Bumpers. We shipped 125 million dollars' worth of
rice to Japan last year. Do you know whether they consumed all
of that or whether they used some of it to export to other
countries?
Mr. Schumacher. Under the sell/buy system, they did consume
about 60 percent of that amount. The rest, we believe, went
into their stocks. To our surprise, Senator, the Japanese have
actually increased their production and particularly their
stocks of rice.
I have been there a number of times on this issue, giving
speeches and talking with them, on the need to get more of our
rice going directly to their consumers. And we are debating and
having discussions with them on the amount of the reexport,
through food aid, that they would have from our rice. So it is
a lively discussion, and we are fully engaged in it.
State Mediation Program
Senator Bumpers. Who is the mediation expert for the
Mediation Program, Mr. Smith?
Mr. Smith. Well, the Farm Service Agency has the primary
responsibility within our mission area, so I would like to ask
Randy to respond.
Senator Bumpers. Mr. Weber, that program was started in
1988, the Mediation Program, to mediate with farmers that were
delinquent, and try to work out some kind of a payback. The IRS
does this routinely. I thought it was a good program. We now
have 22 States, including Arkansas, who have mediation grants.
Let me ask you the question, How many dollars are involved,
that are delinquent, that we are trying to mediate the
collection of?
Mr. Weber. We currently have $2.3 billion delinquent under
direct loans and approximately $115 million delinquent under
the Guaranteed Loan Program, but only a portion of these
amounts have been mediated.
Senator Bumpers. The Office of Inspector General has been
critical of the program. That is what I am coming to. I
personally think the concept is good and, so far as I know, the
program has been working reasonably well. It has in my State,
in any event.
Mr. Weber. Yes; we very much support the program, and we
believe it has been working well.
Senator Bumpers. The average delinquent debt in my State,
among those who are being mediated, is $400,000. That is a
pretty high average.
Mr. Weber. Yes, it is.
Senator Bumpers. If we get one-half of that, it is a good
program. But, in any event, we have 22 States doing these
mediation programs, trying to collect these delinquent bills.
And my question is, What was the Office of the Inspector
General's specific complaints about the way the program is
working? Or maybe it was about the way the money was being
spent.
Mr. Weber. The concern that the inspector general has had
with regard to mediation is not being able to access some of
the records they feel they need in order to ensure that the
money is being spent properly. We have been cooperating with
the inspector general, and I believe the States have been
cooperating to the extent possible under their respective
privacy laws. There are some concerns with regard to some
Northern States, and those are being worked through.
We are also in the process of changing our regulations to
better define what mediation is and to clarify what
requirements we intend the States to meet. We have reviewed the
proposed changes with the inspector general, as well as the
State mediation programs, and they generally feel that the new
regulations will be acceptable. We are looking forward to
putting those out very shortly, this year.
We are also requesting a doubling of the mediation funds,
because we believe this is a very good program.
Senator Bumpers. Did you give me a figure a moment ago when
I asked you how much money is delinquent that we are trying to
mediate?
Mr. Weber. I gave you a total of how much is delinquent.
Senator Bumpers. Is that $3 billion?
Mr. Weber. Yes; but I do not know how much of that is under
mediation.
Senator Bumpers. Well, $258 million of that is in my State.
That is rather shocking.
Mr. Chairman, I will not pursue this any further. Could I
get a copy of the inspector general's report on that? Is that
privileged in any way?
Mr. Smith. I am not sure of the status of it, Senator, but
we certainly will inquire when we get back to the Department
and make it available if we can.
Senator Bumpers. Thank you. Thank you, Mr. Chairman.
[Clerk's note.--The Office of Inspector General's
Evaluation Report is not printed in the hearing record but is
available for review in the subcommittee's files.]
Senator Cochran. Thank you, Senator.
Senator Kohl.
Dairy Options Pilot Proposal
Senator Kohl. Thank you, Mr. Chairman.
I have a question for Mr. Ackerman, another question for
Mr. Schumacher, and a question for Mr. Smith.
Mr. Ackerman, when Secretary Glickman testified before this
committee in February, we discussed what is being done to help
dairy farmers better manage price risk, especially in light of
the great volatility that we have seen in dairy prices over the
last year. At that time, the Secretary indicated that he was
reviewing a proposal for an options pilot program for dairy.
The 1996 farm bill authorized the Secretary to establish
pilot programs to determine whether commodity options can help
producers deal with fluctuating prices. And it seems to me that
dairy farmers need it the most.
Now, why do I say it?
Well, the dairy price support program will be phased out by
the end of 1999, No. 1. Dairy farmers are not covered by crop
insurance, No. 2. And unlike most commodities, they get no
transition payments. Dairy farmers have very few ways to manage
risk. Really, they are on their own. And that is why I think an
options pilot program should be a high priority for USDA as you
seek to address the dairy price problems.
It is my understanding that the Coffee, Sugar, and Cocoa
Exchange has submitted a dairy options pilot proposal. Mr.
Ackerman, do you believe that this proposal has merit?
Mr. Ackerman. Yes, Senator; we are looking at that
proposal. We view it as a very promising proposal for many of
the reasons that you mention. It is very consistent with the
approach we are taking with other crops, with other areas of
agriculture, in developing a safety net, where farmers rely
more on private market mechanisms rather than Government
support programs.
Dairy, as you mention, is somewhat different in that it is
not covered by crop insurance. The futures market mechanisms
for dairy are relatively new. And dairy farmers do not have the
background and experience in using these kinds of mechanisms
for their price risk protection. A lot of work went into this
proposal by the Coffee, Sugar, and Cocoa Exchange, with
assistance from the dairy community. They reviewed the old
options pilot program. They looked at a number of the problems
that it had, and developed ways to overcome them in the new
program.
So we view it as a very promising proposal.
Senator Kohl. Can you give me some indication that it is
going to start some time in the very near future? Where is it
in terms of your sense of priority, sense of urgency? How soon
can we get this thing underway?
Mr. Ackerman. I cannot give you a timetable at this point.
We are looking at it very actively. There are a number of
issues involved with it. There are a number of questions about
the structure of the program that we would like to pursue with
the dairy community including the nature of the subsidies
involved in it. There are ways we think it can be made more
cost effective, so that farmers can participate in it, with
less dependence on Government subsidy.
There is also a question of the funding source for it. The
statute requires that the Secretary, to the maximum extent
practicable, operate this program in a budget-neutral manner.
We are examining what that means--how large of an obstacle that
is and what potential budget sources would be available.
Senator Kohl. All right. Well, as I understand it, the
program, in its present pilot form, is intended to cost perhaps
$10 million, which is a lot of money, but not a lot of money.
And it could be modified somewhat if that becomes the big
hangup. Also, moneys could be obtained from unexpended balances
in other CCC programs. So, I guess what I am telling you is
that I would like to hope that, beyond expressing your interest
in the program, we in fact can get something off the ground.
And I would like to have the opportunity to work with you to
move that process, if you do not mind.
Mr. Ackerman. Senator, I appreciate it. And it is something
that we are looking at very actively. As I say, the budget-
neutrality question is one that we are examining, to see what
is practicable and what is doable. Once we work through that
issue, we would like to focus on this and see what we can do.
Senator Kohl. Thank you, Mr. Ackerman.
State Trading Enterprises
Mr. Schumacher, you and I have had several conversations
about our mutual concerns with respect to state trading
enterprises, such as the New Zealand Dairy Board and the
Canadian Wheat Board, and the hindrances that they pose to
United States exports. I believe that monopoly export boards
such as these have an unfair trading advantage over countries
such as ours, where the standard rules of competition apply.
But this is not just an export issue. We are now seeing
concerns raised on the import side also, where countries like
China have monopoly import agencies.
I have appreciated the administration's support on this
issue, and the strong statement made by Deputy Secretary
Rominger at the WTO meeting in Singapore recently. Could you
explain what the administration is doing currently with regard
to cracking down on the activities of state trading
enterprises? And could you tell us what, if anything, more the
Congress can do to help on this matter?
Mr. Schumacher. Thank you, and I appreciate that question.
Chris Goldthwait and I are working very hard on this, along
with Ambassador Barshefsky and her team. In Singapore, we had
very lengthy discussions--Deputy Secretary Rominger--on the
issue of state trading, both the exporting and importing. Under
the Singapore agreement, we are working very hard right now in
Geneva and in the OECD. Chris has just returned, last week,
from those two places, and he can outline where we are
specifically on the 1997 preparation for the 1999 round.
We are taking it very seriously. It is also a very major
part of our China WTO accession discussions between our STR and
the Chinese officials, on the role of state trading. We have
made a few breakthroughs, we believe, recently. We continue to
make more as we go into that accession agreement.
Mr. Goldthwait. Senator Kohl, we are taking this step by
step. We are seeking, first of all, transparency as to the
operation of the state trading enterprises. By that, we mean we
want information about their sales activity, about their
pricing. We are in the process, in the working group on state
trading enterprises, in Geneva, of developing a questionnaire
that all countries will agree to answer with respect to both
their importing and their exporting state trading enterprises.
We are making some progress, although, as of course you
recognize, people like the New Zealanders, like the Canadians,
are not wanting to be very forthcoming in the provision of
information. And I think, based on the pressure we are applying
in Geneva, the pressure we are applying in other negotiations
that are ongoing on credit guarantees, in the OECD in Paris,
and even the discussions that are ongoing in the Free Trade
Area of the Americas initiative, I think we will get some
degree of transparency.
If we, over the next year or two, can arrive at a better
picture of what these entities are actually doing, what their
trade-distorting behavior is, then we will be in a position to
formulate the negotiating demands that we will place in the
next multilateral trade round, which, for agriculture, is due
to begin, as Mr. Schumacher said, in 1999.
So that is basically where we are. It is a front-burner
issue.
Senator Kohl. Thank you.
Is there something more we can be doing up here on the
Hill?
Mr. Schumacher. Why do not we discuss this with our STR
people, and I could come back and talk to you on that?
Senator Kohl. All right.
Mr. Schumacher. With someone from STR in the next week or
so.
Senator Kohl. I would like that.
Mr. Schumacher. We would enjoy that, too.
Senator Kohl. Thank you.
Timing of Advance Market Transition Payments
And, finally, Mr. Smith, in order to receive advance
transition payments under the new farm bill, farmers are being
required to have all of their lease arrangements finalized and
disclosed to USDA by January 15 of each year. Now, in warmer
climates, that might be a reasonable date. But in States like
Wisconsin, final decisions about which fields a farmer is going
to lease are not made until the early spring.
It seems to me that it makes more sense for farmers to be
able to receive their advance payments whenever they meet the
requirements, instead of having a strict deadline. It is my
understanding that the administration may be sending a package
of proposed farm bill technical corrections to Congress. Will
you, Mr. Smith, be requesting a clarification in the farm bill
language regarding that deadline of January 15?
Mr. Smith. Senator, yes, we are. As you recall, in the farm
bill, it specifically required that we make the AMTA payments
on December 15 or January 15. And because of the difficulty the
producers encounter in meeting that requirement, we are
proposing legislation to give us more flexibility, so that we
can accommodate the differences in farm planning across the
country.
Senator Kohl. So there will be a clarification, then?
Mr. Smith. Yes, sir.
Senator Kohl. Along the line of what I have suggested?
Mr. Smith. Yes, sir; and I would like to ask Randy if he
has any additional comments on how this could benefit the
producers with regard to their leases.
Mr. Weber. Certainly you raise a good question and a
question that has been raised by many producers, because there
are vast parts of the country in which leasing arrangements are
not completed by January 15. And under current law, if the
rental arrangement has not been made by January 15, then we
cannot make an advance payment to a producer.
The legislation that we are proposing would broaden the
period of time in which producers could request advance
payments--from November 1 through August 1. We think that would
be broad enough to allow anyone to receive an advance payment
and not have to wait until September 30 to receive the final
AMTA payment.
Senator Kohl. Well, that is good. I do appreciate that very
much. Thank you.
Thank you, Mr. Chairman.
Senator Cochran. Thank you, Senator.
CCC Outlay Estimates
Mr. Secretary, on page 8 of your prepared statement, at the
top of the page, it says the 1998 budget projects that CCC
outlays for commodity programs will increase from about $5
billion in 1997 to $6.2 billion in 1998, and then decline
again, to about $4 billion by 2002. What are the reasons for
these projected increases in CCC outlays from 1997 to 1998?
Mr. Smith. Mr. Chairman, I would like to ask either Dennis
Kaplan or Randy to respond to that. Some of the fluctuation is
due to repayment of advance deficiency payments, which impacted
the CCC outlays. But I am not sure whether that accounts for
all of it.
Mr. Weber. Mr. Chairman, we are estimating that the total
CCC outlays in fiscal year 1998 will be $9.9 billion, $2
billion higher than fiscal year 1997. And that is principally
because in fiscal year 1998 we will not receive repayments of
advance deficiency payments, whereas in fiscal year 1997 we are
receiving repayments of 1995-crop overpayments. CCC commodity
assistance to producers, including loan programs, is expected
to be about $1.1 billion higher. And then, in each of the
succeeding years, it is going down simply because the AMTA
payments are declining in those years.
Senator Cochran. The what kind of payments?
Mr. Weber. The AMTA payments.
Senator Cochran. What is that for?
Mr. Weber. Agricultural Market Transition Act payments.
Senator Cochran. OK. These are the contracts that are
entered into?
Mr. Weber. Yes; these are the contracts that are entered
into.
Senator Cochran. By the producers with the Government?
Mr. Weber. Yes; those payments decline, from a fiscal year
1998 level of $5.8 billion, down to just slightly over $4
billion in 2002.
Senator Cochran. Are there assumptions made about the
commodity prices and what effect that will have on CCC outlays?
Or does that become irrelevant under this new program?
Mr. Weber. Prices have much less effect under the 1996 act
than they had under the previous farm bill, because then the
payment rate was dependent upon whatever the market price was.
Now, with the guaranteed payments, that is not a factor. It can
still be a factor with regard to loan activity, however.
Depending on where the market price is, we can have changes in
loan activity.
As a matter of fact, this year, despite the higher market
prices, we still have a fairly high volume of loans, especially
in wheat and corn. They are running higher than they did last
year.
Senator Cochran. Is that a surprise, or was that expected?
Mr. Weber. Somewhat of a surprise, but it is not unusual in
a declining market. The loan program tends to provide producers
with a fairly favorable interest rate, and they find that this
gives them some interim financing and allows them to more
readily market their grain.
Senator Cochran. We had always heard that our commodity
programs--particularly the loan program--was a marketing tool.
What, if anything, is going to be the practical consequence of
the change that we have seen under the new farm program with
respect to the marketability by producers of their commodities?
Mr. Weber. Well, as you know, Mr. Chairman, the 1996 farm
bill essentially freezes loan rates at the 1995 levels. In the
case of rice, that is $6.50 per hundredweight for the entire
duration of the farm bill. Wheat is $2.58. The only commodity
for which there is some level of fluctuation is soybeans, and
it has a very small range. The soybean loan rate for 1997 will
be at its maximum of $5.26 per bushel.
So, again, the loan rate in relation to the market prices
will determine how much farmers use this program. But I tend to
think, over the years, farmers do use it for interim financing.
So even when prices are relatively high, we do have loan
activity.
Mr. Smith. Mr. Chairman, there is one observation I will
make, as well, and that is with the price volatility that we
are experiencing because of the flexibility in the planning by
our producers domestically, and also because of the global
demand for our agricultural commodities, our producers may
experience more need to use the loan program as a tool, because
they can see considerable price fluctuation between harvest
time and the end of that loan period. And so, in order to take
advantage of that fluctuation, you may find more producers
parking their commodities temporarily in loans, at the low
interest rate, to see what volatility will be introduced in the
market in a given year.
Long-Range Export Market Outlook
Senator Cochran. I know Mr. Schumacher talked about the
record harvest in some of our competitor countries as having an
impact on the level of our exports next year. What are the
long-range expectations for export markets for American
farmers?
Mr. Schumacher. We have looked at the ERS baseline. And
that shows that we are going to dip a little bit this year. But
next year and the following years, it looks to be 5, 5.5
percent growth in our value-added; 4, 4.5 percent in our bulk.
So it looks quite steady, Senator, through the next 6 to 8
years, to the year 2005.
Particularly, I think, noteworthy is that we are
projecting, under our ERS baseline, to reach $80 billion in
exports by the year 2005, and that the trade surplus will in
fact widen. Our export growth will move along about 5, 5.5
percent overall. Our import growth, though, will be 3, 3.5
percent. We are looking at a trade balance widening to $34 to
$35 billion in exports over imports by the year 2005.
Trade Barriers to U.S. Exports
Senator Cochran. Does any of this take into account efforts
that our Government is making to break down barriers to our
entry into markets or expansion of markets? I notice, for
example, this annual report the U.S. Trade Representative
filed, and which was reported in the Washington Post on April
1, 1997, that talked about the fact that many markets around
the world remain closed to U.S. exports and, to the extent our
trade deficit is the result of these barriers, they must be
reduced. That was a quote attributed to U.S. Trade
Representative Charlene Barshefsky.
The article says:
In addition to 46 countries, the report of the most onerous
trade barriers around the world also included four trading
groups, including the 15-nation European Union. On the European
Union, Barshefsky said she was, ``particularly concerned by the
EU's pervasive discrimination against U.S. agriculture
exports--including rice, wheat, wheat flour, bananas, beef,
dairy products, and certain fruit.''
On China, Barshefsky said that United States companies and
farmers still faced numerous barriers trying to get into that
huge market.
Do these projections presume that we are going to continue
to have these difficulties, or do they assume that we are going
to break down these barriers? And, if so, how are we going to
do it? And what, if anything, is the Department of Agriculture
doing to help break down these barriers?
Mr. Schumacher. Yes; we are, in fact, proposing some modest
additional funding to continue to rigorously identify and then
take action to break down these barriers. As you may be aware,
we have quite a few problems right now with Europe. There is an
EU veterinary team here trying to solve this difficult issue on
our EU equivalency agreement. We are now at the WTO, awaiting
an agreement, which we hope will be quite satisfactory to us,
on discrimination against our beef going into Europe.
We are gradually resolving the rice issue on the tariff
rate quota. And we hope to make progress within the next few
weeks on the rice cumulative recovery system. But, again, it is
very difficult, it is very time consuming, and it is slogging-
type work that we are undertaking very aggressively with our
friends in the Special Trade Representative's Office.
On China, as I mentioned earlier, we are in the midst of
difficult negotiations on their WTO accession. So these
barriers need to be further identified and action taken,
especially on some of the smaller issues that do not appear all
the time but that do have an impact. For example, we are
working very closely in Mexico, of all things, with Christmas
trees out of North Carolina and in the Northeast. A small
issue, but an important issue for those growers in that area,
as the TCK issue is in China to major wheatgrowers.
So we are aggressive. We are tightening up our work. We are
reallocating resources to deal with these market access
barriers.
On the specific question, does the ERS baseline projection
take into account all of these? I will have to come back to you
in writing, and talk to our friends in the Economic Research
Service to see how much of this they have captured, and what
they have implied in their assumptions on market access barrier
reduction over the next 8 years.
[The information follows:]
The export growth projections in the ERS baseline are based
on the current trading environment. They do not assume
resolution of market barriers cited in the annual report of the
U.S. Trade Representative, however, they do incorporate market
access gained in the Uruguay Round and NAFTA agreements.
Resolution of these numerous barriers would translate into
greater global trade of agricultural products.
Effect of Possible Trade Sanctions on China
Senator Cochran. In the case of China, there appears to be
a huge market there. And there is a lot of controversy about
the extent to which we ought to be trading with China. Some
think that because they have exported missile technology and
have done other things that we disapprove of that we ought to
impose further sanctions. What effect, if any, would be the
imposition of economic or trade sanctions against China with
respect to our agriculture exports? And how will that affect
agriculture producers here in America?
Mr. Schumacher. Two responses, Senator. One, I think people
forget, or they may not be looking at the data, that China, in
fact, is a net food exporter. They export 11 to 12 billion
dollars' worth of food and import $9 or $10 billion. Their
grain imports have fallen from 19 million tons to our forecast
this year of around 7 million tons. They are a strong
competitor of the United States with value-added in the Pacific
rim, and recently have been exporting a modest amount of corn.
So our exports this year to China, excluding Hong Kong, are
a little less than $2 billion, projected, primarily in the soy
complex and in poultry. And cotton is very, very important.
Cotton, soybean oil, and poultry, and some beef parts as well.
Senator Cochran. So those are the commodities where we
could see a dropoff in trade if sanctions were imposed; is that
what you are saying?
Mr. Schumacher. Those are the four major commodities that
we are currently exporting to China.
Senator Cochran. Do you know what the dollar value is for
any of those?
Mr. Schumacher. Chicken is about $550 million. Mostly the
chicken feet, of all things. They eat a lot of chicken feet.
Then the soy oil--I will have to get back to you precisely on
that. Cotton--the other three I will get back to you on that,
Senator.
[The information follows:]
Exports of U.S. soybeans, meal and oil to China totaled
$230 million in 1996, but could easily top $1 billion this
year. Last year cotton exports were $800 million, and hides and
skins were $170 million. We also shipped $200 million plus in
fruits, vegetables, and tree nuts.
Senator Cochran. OK. The assumption, then, is that we are
going to continue to work--and it would be good to know what
the expectations are about the possibilities of success in
breaking down these barriers and what that would mean in terms
of increased exports. I think the reason it is important, from
an Appropriations Committee point of view, is the impact that
that might have on CCC outlays or the prices of commodities to
producers.
The overall effect of increasing exports ought to be to
increase the opportunity for profit in production agriculture,
and less and less need for farm operating loans and maybe some
of these other programs that we use to support production
agriculture. In the risk management area, that can have an
impact.
Further Crop Insurance Reform
Mr. Ackerman, let me ask you this. There have been
suggestions that we expand the programs for risk management. As
long as I have been in the Senate, we have always heard about
the difficulties of the Crop Insurance Program, the
unpredictability of disaster assistance when natural disasters
occur, where there is clear evidence that crop insurance is not
adequate to protect farmers against huge losses that are often
sustained. What is the administration's view toward further
reforms in this area?
We heard your comments earlier, but I continue to hear from
other Senators who think that this is a major problem and that
Congress and the administration need to get together and work
out some new program for protecting against the harmful
consequences of natural disasters for production agriculture.
Mr. Ackerman. Senator, I appreciate the question.
Crop insurance has changed fundamentally in the last 3
years. We have gone from a program that covered about 30
percent of covered crops to one that covers almost 80 percent.
We have gone from a program that was based on average yields to
one that is based on individual yields. We now have a program
that, up until the early nineties, was a perpetual money loser
as far as underwriting fundamentals were concerned to a program
that now has an actuarial loss ratio the past 3 years within
our target.
We also have a program that has expanded into new crops,
into new pilot areas, and into new concepts like revenue
insurance and the program that Senator Kohl was mentioning
earlier, the options pilot program. So, I think, when you look
at crop insurance today, it is really a very different program,
a very different organization than what existed 3 or 4 years
ago. The changes of the last few years, I think at this point,
are just starting to kick in.
FAS Market Barrier Initiative
Senator Cochran. In connection with the question I was
asking about barriers to trade, I notice there is a request in
the budget for an increase of $500,000 for a market barrier
identification initiative. Why is this needed, if we have the
USTR filing this annual report that I just cited and which we
have available to us? Why do we have a proposal for a
Department of Agriculture initiative identifying market
barriers as well?
Mr. Schumacher. The Special Trade Representative's Office
is identifying quite a few of the general barriers, as I
mentioned earlier. There are a lot of specific barriers that
affect a number of areas in commodities in this country. I
mentioned the issue of Christmas trees, which is not a huge
export, but a very important one for North Carolina,
Pennsylvania, and New York.
We not only want to identify these specific barriers, we
also want to start taking identifiable actions to address these
barriers in detail through our trade policy work as we begin to
formulate our programs at the WTO. We would like to get a lot
of these resolved prior to getting into negotiations at the
WTO. Those that we cannot resolve, we are going to take them up
as we move toward the 1999 rounds.
Changes in the Cooperator Program
Senator Cochran. I notice there are some changes in the
Cooperator Program. You are suggesting an increase in the
contribution from the private companies or groups who
participate in that program. What is the practical consequence
of that? Are they going to quit participating or are they going
to come up with the extra money? What is your expectation on
that?
Mr. Schumacher. Well, Mr. Chairman, we are working quite
closely with the cooperators, as the intent of Congress and the
report language last year was to make it a bit more
competitive. And we are looking at competitive criteria, which
we are keen to discuss with your staff--the criteria would have
a number of aspects to it, one, on contributions and, two, on
measuring performance on exports.
And I think that very few cooperators would have problems
with this. In our discussions--we have had three meetings with
them. It is basically adjusting the Cooperator Program to
broadly similar competitive criteria that we have with the
Market Access Program, as we made reforms in that program as
well, putting them on a competitive basis.
Senator Cochran. Well, our committee report, or at least
the statement of managers accompanying the conference report
for this fiscal year suggested that the Department develop
procedures and criteria for a competitive bidding process for
awarding these funds. Has anything been done in response to
that suggestion?
Mr. Schumacher. We are right in the midst of our
discussions with our staff. And we want to also consult with
both Houses of Congress before we implement agreements with the
cooperators and put this into practice. We have work to do yet,
sir, on introducing the competitor measures, and we do not want
to do that before we have adequate consultation with the
cooperators and with both Houses of Congress.
Public Law 480 Rescission
Senator Cochran. There is a proposed rescission before the
committee to remove $50 million in funding for the Public Law
480 title I program--that we rescind $3.5 million of ocean
freight differential funds and $46.5 million in subsidy budget
authority in the Direct Credit Program. What is the reason for
the rescission request?
Mr. Schumacher. I would like Mr. Goldthwait, with your
permission, to answer that question, sir.
Mr. Goldthwait. Senator, this is one of those cases where
we have had to make some very, very difficult decisions about
conflicting budget demands and tradeoffs. The reason for the
rescission that we have proposed is because of additional
funding needs with respect to domestic feeding programs that
are managed elsewhere in the Department.
Senator Cochran. Is that the WIC Program particularly?
Mr. Goldthwait. Yes, indeed.
Senator Cochran. Let me ask you this. The domestic feeding
programs that are funded in this budget, including the Food
Stamp Program, seem to continue to grow in spite of reduced
rates of unemployment, in spite of economic conditions that
would indicate greater job opportunities, better access to
health care, a lot of changes in our society that seem to make
access to a higher standard of living within reach of more and
more Americans. But yet the cost of these subsidy programs seem
to continue to go up.
I know that is not within the jurisdiction of this
committee, but it seems to me that we ought to be doing the
kind of job that manages those programs so they do reach those
who need them. We have seen a lot of reforms made and a lot of
changes made in the legislation. But now the administration is
coming in with assumptions that will expand those programs even
further in this budget year and requesting this rescission of
funds for the Public Law 480 title I program.
The budget indicates that commodity shipments would be
reduced by approximately 200,000 metric tons as a result of
this proposed rescission. But it also indicates that
allocations of title I commodity assistance that have already
been announced would not be affected by the rescission, because
the reduction in program funding will be taken from a reserve
of unallocated funds and from unobligated funds carried over
from 1996.
What is the total of unallocated funds and unobligated
funds carried over from 1996?
Mr. Goldthwait. The $50 million rescission breaks down
roughly 50-50 between the current fiscal year reserve and the
carryover. The carryover is actually $22 or $23 million, and
the unallocated reserve is about $26 or $27 million. So it is
very close to a 50-50 split there.
As you may know, our programming practice at the beginning
of each fiscal year is to allocate the majority of the Public
Law 480 title I funds, but to maintain a small reserve for
needs that cannot be foreseen at the very beginning of the
fiscal year, but which develop in the course of the fiscal
year. And, in effect, the proposed rescission draws on those
funds, plus this small carryover.
Public Law 480 Title I Carryover Balances
Senator Cochran. Why were Public Law 480 title I funds
carried over from 1996? And since they were, why were they not
included in the initial funding allocation for fiscal year
1997?
Mr. Goldthwait. In many years there is a small funding
carryover. This arises for a couple of reasons. It arises when
we have a planned program that falls through very late in the
fiscal year, when, for one reason or another, a foreign country
cannot complete the negotiations with us and actually sign its
program in time to ship the commodity in a timely basis.
It also occurs because of shifts in commodity prices and
because of shifts in freight costs--the estimated value or the
estimated cost associated with a particular country program is
in fact different from the actual cost. And, indeed, the
carryover was a little larger this year than usual. We did see
a situation where, at the end of the fiscal year, we were
beginning to see a reduction in commodity prices for some of
the commodities that were heavily programmed--wheat, for
example.
So that is the origin of the carryover. And it was in fact
a little larger going into fiscal year 1997 than we would have
expected under normal circumstances.
Senator Cochran. But it is just confusing to me that we can
see a rescission being requested, and then the budget documents
explain that this really does not matter. We have got carryover
funds, and we have got unobligated funds. Why does it matter?
Why do we just not appropriate what you are asking for next
year?
Mr. Goldthwait. It is not a case of not mattering. I think
the point we were trying to get across in the budgetary
description was that we will not find it necessary to, if you
will, renege on any existing fiscal year 1997 commitments to
countries that we have already made. In other words, there is
just enough unobligated funding that is available to cover this
rescission without having to go to any country to whom we have
already offered a fiscal year 1997 program and saying to that
country we are not going to be able to follow through with that
commitment.
Senator Cochran. But if there are any additional requests
made, they cannot be met?
Mr. Goldthwait. That is correct, unless some other existing
fiscal year 1997 program fails to materialize.
Senator Cochran. You do have the authority within the
Public Law 480 program though to transfer funds within and
between titles, do you not?
Mr. Goldthwait. That is correct, within limits.
Senator Cochran. Well, has the administration concluded
that if unobligated and carryover funds are not required for
title I, they also will not be required to supplement funding
for titles II or III of the program this year?
Mr. Goldthwait. That is our best estimate as of the current
time.
Senator Cochran. That is enough to give you a headache, is
it not, trying to figure that out?
Cochran Fellowship Program
I was glad to hear that you have requested $2.4 million for
the fellowship program, which the Department, several years
ago, described as the Cochran Fellowship Program. I just came
back, incidentally, from a trip with Senator Stevens, chairman
of our full Committee on Appropriations, to the Russian far
east and to South and North Korea. I had an opportunity to meet
with some participants in this program on that trip.
And from what I hear from those who work in the consulates
and the embassies around the world where there are eligible
countries, it seems that this is a program that provides a
unique opportunity for participants to learn more about our
free market and economic systems. Through this program,
developing countries and emerging democracies can learn from us
and develop closer ties that result in better trade
opportunities for U.S. exporters and economic development
opportunities for the participating countries.
I wonder the extent to which we are able to get the
appropriated funds for this program supplemented by the
Emerging Markets Program and by AID programs. I know that we
have had moneys allocated from these other programs. Do we
expect to have any money allocated in the next budget year to
supplement these funds?
Mr. Schumacher. Yes; because the program has been, as you
mentioned, very successful. We are looking at $1.8 million,
maybe $2 million, from USAID and from the Emerging Markets
Program about $1 million. So with the $2.4 million of
appropriated funding, we are looking at nearly $5.5 million, to
sustain this very successful, innovative program.
Senator Cochran. That is good to hear. One person I met,
had come back from California to Vladivostok--that is an open
city now, for the first time in many, many years, as everyone
knows--where they are beginning to develop an indigenous
agriculture productivity and food marketing capability. And
there is a lot of excitement about the close relationship that
exists between our west coast and the Russian east coast.
The State of Washington, for example, is having great
success in marketing apples in that part of the world now. We
also are seeing other new relationships developing. Even on the
Island of Sakhalin, I ran into an Embassy person who was very
excited about the fact that she had been involved in recruiting
participants for the Cochran Fellowship Program. She told me
what a success that had been. So I am very pleased to have your
report.
I am submitting for the record some questions for further
information about participant levels and examples of what the
program has actually accomplished to date. We are hopeful we
can get the committee to continue to support it.
Mr. Smith. Senator.
Senator Cochran. Yes.
Cochran Fellows From South Africa
Mr. Smith. I had the pleasure of working with the program,
primarily with the Gore and Baake binational with South Africa.
And my experience with the Cochran fellows that have come to
the United States from South Africa has been very rewarding.
For example, one young man who operated a small dairy in
South Africa came to the United States on a Cochran fellowship
to learn how to expand his production through improving the
feeding of his dairy herd. But on the way back, he told me he
learned something else, and that was to focus on developing co-
ops in his community. So he came for personal reasons and he
left with a perspective on how to help his entire community.
And he went back with the intent of developing a marketing co-
op to help market not only his milk from his dairy herd, but
his neighbors' as well.
Senator Cochran. That is very interesting. I have had some
other experiences in the former Eastern bloc countries, such as
Poland, where they now have an alumni group which meets every
month. They get together and talk about their experiences in
the United States and what they learned. They stay together. It
tends to generate a lot of camaraderie. But the benefits are
that they have learned new strategies for themselves. They have
developed a new sense of confidence in being able to succeed in
a free market economy. It was quite something to see--the level
of excitement and optimism that was generated by these
participants. It seems contagious and that was very gratifying.
Fiscal Year 1998 Export Enhancement Program Budget Request
There are a number of other questions on various subjects
that I have here that I am going to submit for the record. I do
want to ask about the Export Enhancement Program though. The
budget proposes $500 million, which is the maximum authorized
level of funding, as you point out. This year we have a $100
million limitation on the program that was included in the
appropriations act. The reason for that was that our
discussions with those who were interested in the program
indicated that they did not think that there would be a demand
for any more than $100 million this year.
Why do you believe that there will be a demand for more
than $100 million in fiscal year 1998?
Mr. Goldthwait. Senator, we believe very strongly that we
need the Export Enhancement Program, as Secretary Glickman has
said, as a potential tool, in the event that we face aggressive
subsidization by our competitors, particularly the European
Union, although we could also face price discounting by some of
the state trading enterprises that Senator Kohl alluded to
earlier.
The fact of the matter is that under their GATT allowance,
the European Union will have, in terms of subsidy
authorization, close to or perhaps even a little more than $10
billion to promote their commodities through price discounting.
We believe that we very much need to have the $500 million
allocation to fall back on in the event that we face
competitive conditions that are considerably more difficult
than what we have been fortunate to face in the current year.
As Mr. Schumacher noted earlier, this year we had somewhat
smaller availabilities for export of wheat and some of the
other commodities for which we traditionally use the Export
Enhancement Program. We simply do not know, until we have a
better idea of what Northern Hemisphere harvests are going to
be, what we might be called upon to do in the new marketing
year and the new fiscal year.
EU Trade-Distorting Subsidies
Senator Cochran. It seems that we entered the Uruguay Round
hoping to be able to negotiate an end to trade-distorting
subsidies. Now we hear more about what the Europeans are doing
to increase their allocation of funding to enhance their
commodities in overseas marketplaces which is to our
disadvantage. If this is not a trade-distorting subsidy by the
EU, what is it?
Mr. Goldthwait. It certainly is a trade-distorting subsidy.
And in fact, in the Uruguay Round we did achieve limits on
that. And over the life of the phase-in period, the EU will be
required to reduce their expenditures on export subsidies by a
total of 36 percent. The fact that here, midway through the
process, they still have the ability, if you will, to use up to
$10 billion simply says a lot about their starting point.
Senator Cochran. Well, it seems that we have got our work
cut out for us to protect our interests in this global market.
And I am in favor of a robust and aggressive marketing program,
where our Government works in a cooperative way with our
private sector to ensure that we do not get mistreated by trade
barriers being erected or unfair practices of any kind.
So I do not know what the wishes of our committee will be
with this particular request, but I am inclined to support what
you are asking. I hope that we have the funds allocated to our
committee that will permit us to make this available if needed.
Importance of Market Access Program
The Market Access Program has already been discussed and
mentioned. I am hopeful that we can continue the current level
for that, the fully authorized permanent funding level of $90
million which is included in the budget. Does this program
continue to be important for us in order to promote and expand
agricultural exports from the United States?
Mr. Schumacher. Senator, this program is vital. As
mentioned earlier, our value-added programs are moving forward.
Our cooperators are being much more innovative in the wheat
area and in corn and in soybeans. Soybeans have been terrific
in using this money to get access in new markets like China for
soybean oil. I mentioned earlier the Meat Export Federation did
a marvelous job as did the cotton folks in South America on
value-added cotton. I could go on for much more time than I
think is appropriate here.
I have been at this now nearly 3 years, and I am just
excited about what is going on among our exporters, the
cooperators, and participants in the Market Access Program. I
can assure you the Europeans, the Chileans, the Argentineans,
and even the Uruguayans, who were in yesterday, are very
admiring of this program. The Minister of Agriculture
specifically mentioned the extraordinary performance of the
Meat Export Federation, and how they would love to duplicate
that.
We have market penetration because of the cumulative
success of this program. I am going to work very, very hard to
make that a continuing success, with our private sector.
Senator Cochran. I appreciate hearing that good report. It
would be helpful if we could have for the record a description
of the program requirements for participants now. We know there
have been legislative changes made. Senator Bumpers referred to
them. We are familiar with them. We argued on the floor of the
Senate, in debate, over amendments that were proposed,
maintaining that this program could be improved. It would be
good to have a summary of the changes that have been made and
how they are working, so we will become better able to argue
against any amendments that might be designed to delete the
funds provided for this program when we get to the floor.
I assume that Senator Bumpers is not going to give up.
Maybe the program has not been improved enough. But whatever
the facts are, we need to know them so we can describe what is
going on with this program to the Senate when the bill gets to
the floor. That would be very helpful to us.
Mr. Schumacher. We will do that, sir.
[The information follows:]
Consistent with the Administration's commitment to streamline
government programs, new MAP regulations were published on February 1,
1995, that increased flexibility and simplified program requirements
for the participants. The MAP regulations reflect public comments and
changes made by the Omnibus Budget Reconciliation Act of 1993 and most
recently, the Federal Agriculture Improvement and Reform Act of 1996.
Specific changes in the MAP include:
--eliminated the requirement for an applicant to show that the
represented U.S. agricultural commodity faces an unfair trade
practice in an overseas market;
--give priority assistance in the allocation of brand promotion
funding to small businesses and cooperatives;
--established procedures for appealing compliance findings;
--simplified contracting standards and procedures;
--extended the time period during which expense claims may be
submitted for reimbursement; and
--liberalized U.S. origin identification requirements to permit the
use of generally recognized states or regions within the U.S.
In addition, the Department has administratively implemented the
following improvements to streamline and expedite program management:
--simplified reporting requirements for end-of-year contributions;
--delegated to FAS Commodity Division Directors the authority to
approve routine administrative issues;
--eliminated the requirement for formal amendments to effect changes
in approved activity plans other than those that are deemed
``significant";
--delegated authority to the State Regional Trade Groups to approve
brand company plans valued at no more than $50,000, thus
expediting the approvals for primarily small companies
participating in the MAP;
--eliminated the need for all brand companies, 80 percent of which
are classified as ``small,'' to track and report expenditures
by multiple cost categories for brand activities.
The Department also undertook an extensive analysis of the
methodology and criteria used to evaluate MAP applications and allocate
funding among participants. Based on public comments received in
response to a Federal Register notice on proposed changes and the
results of the analysis, the Department adopted and published revised
evaluation criteria that included:
--export performance criteria that is now based on three years of
historic export data, rather that one year;
--industry contribution levels that now include actual past
contributions for prior year participants, not only the level
projected for the coming year; and
--the competitive review process was modified to compare the relative
performance of each applicant based on four weighted criteria:
contributions (40 percent), export performance (30 percent),
export goals (15 percent), and accuracy of past projected
export goals (15 percent).
Background: In response to GAO and OMB, the regulations have also
been tightened with regard to funding additionality and evaluation.
Participants must certify and demonstrate that nay funds received will
supplement, but not supplant, any private party contributions to the
program. For evaluation, we added reference to the Government
Performance and Results Act (GPRA) in the activity plan and evaluation
sections. The critical point is that language now appears in the rule
which states that ``a participant that can demonstrate additional sales
compared to a representative base period, * * * will have met the
overall objective of the GPRA and the need for evaluation.''
The streamlining of the MAP has been well received, and the
Department continues to make program modifications to further
streamline operations and ease administrative requirements for program
applicants and participants.
Credit Rules for Brazilian Importers
Senator Cochran. You mentioned South America. I notice that
there are some concerns about the Brazilian Government's recent
decision to establish some different credit rules for companies
importing agricultural commodities, compared to those who are
purchasing commodities from domestic sources. I understand that
exports of U.S. cotton and wheat could be particularly
disadvantaged.
Are you aware of this new development? Can you tell us
about it and what we may be doing to persuade the Brazilian
Government to treat exports in a fair way?
Mr. Goldthwait. The Brazilians basically are setting some
rules for the import of agricultural products that benefit from
credit arrangements. In effect, what they are doing is applying
limitations on the use of short-term credit, up to 1 year. In
effect, we have been very successfully using our Credit
Guarantee Program, the GSM-102 program, in Brazil. You have
mentioned its success in supplying cotton. We have sold about
12 million dollars' worth of cotton so far this fiscal year
under the program. We have sold a total of about 20 million
dollars' worth of agricultural commodities to Brazil under the
program so far this fiscal year.
We are in the process of adjusting the credit term that we
use for our program to Brazil so that it will be a little
longer and it will conform to the requirements of the Brazilian
arrangements. And we believe that the credit program will
continue to be a useful tool, with this small adjustment. And
we intend to put out a press release that makes that adjustment
formal within the next 2 or 3 days.
Boll Weevil Eradication Loans
Senator Cochran. Speaking of cotton, we have the boll
weevil eradication loans that were funded in the fiscal year
1997 appropriations act. We understand that FSA has not yet
released the money because the regulations have not been
promulgated. It is necessary that these funds be made available
by May 15, so that the planned programs can be continued and
the program expansion that was contemplated can be initiated.
APHIS tells us that they have supplied the Farm Service
Agency with all the information the agency has requested. What
is the problem here about getting these funds out? Does anybody
know the answer to that?
Mr. Weber. Mr. Chairman, we are about ready to go forward
with publishing the rules. We are hopeful that they will be out
in May and that we can start the program in May and have all of
the funds obligated by the end of the fiscal year.
Senator Cochran. Is there any timetable for making the loan
program available to qualified users?
Mr. Weber. We are hopeful that we can start making those
loans available sometime in May.
Senator Cochran. Today?
Mr. Weber. No; sometime in May.
Senator Cochran. Oh. [Laughter.]
Mr. Weber. Sorry. I would like to have made it today.
Senator Cochran. Well, I had heard that there was possibly
a meeting today with the Secretary on this subject, or some
subject relating to the cotton industry and the boll weevil
program.
Mr. Smith. Senator, I have a meeting scheduled this
afternoon with the National Cotton Council to bring them up to
speed as to where we are in that process of clearing the
regulations. There are a couple of concerns that, even after we
get our regulations out, may affect our implementing the
program. I understand that we have a lawsuit in Texas that may
encumber us in our ability to make a loan to that association
until that lawsuit is settled.
But we hope to be able to discuss those things with the
participants. They should not hold up our regulations; they may
just impact our ability to implement the regulations for those
associations.
Senator Cochran. Well, we appreciate your working with the
industry to deal with this problem. It seems that we have a
program now that is moving along. And if we keep it moving and
keep the Federal agencies that have a role in it on target with
the contributions that are being made by individual producers,
in a concerted effort, we may be able to eradicate the boll
weevil and increase the proficiency and productivity of our
cotton farms across the country. That will mean a lot to our
economy, particularly in the cotton-producing regions.
So we appreciate your assistance and your understanding of
the importance of these issues, and the promulgation of the
regulations and the making available of the $34 million in loan
authority that we have authorized for this program.
Submitted Questions
Well, you all have been very patient with the questions of
the members of our committee and with me this morning. We
appreciate your cooperation. I have a number of questions on
these and other subjects to submit so we can have a complete
record that will help us explain and answer questions that we
might have to answer when this bill comes before our committee
and then is on the floor of the Senate for consideration.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]
Farm Service Agency
Questions Submitted by Senator Cochran
farm ownership loans
Question. How has the Farm Service Agency tried to increase
participation in the guaranteed loan area?
Answer. FSA has tried to increase participation by making the
guaranteed loan program more accessible and easier to understand for
both lenders and loan applicants. Many improvements have been made over
the past several years. For example, we implemented a Certified Lender
Program to provide our most experienced lenders with a streamlined
application and quicker turnaround on guarantee requests. Also, we
consolidated over 14 separate forms and certifications into a new
application. In addition, we have recently issued a new Lender Manual
to assist lenders in making and servicing guaranteed loans. This summer
we will continue to gather suggestions for improvements and implement
program enhancements by meeting with lenders and other parties
interested in our program. We intend to address concerns over
application processing time, consistency between Agency field offices,
and application requirements for small loans. These suggestions will be
considered as the Agency modifies its Guaranteed Program regulations.
Question. The fiscal year 1998 budget request proposes a $4 million
increase for emergency loans. Farmers use these low-interest loans to
help recover from natural disasters. How did the Agency derive this
program level for fiscal year 1998?
Answer. The fiscal year 1998 program level was basically derived as
an extension of the loan level amount originally requested, and
subsequently appropriated, for the fiscal year 1997 Budget. When the
1998 Budget was being formulated in the summer of 1996, the Department
approved an extension for 1998 of the then-pending 1997 Budget request
of $25 million. However, after enactment of the 1997 USDA
Appropriations Act, the appropriated subsidy of $6,365,000 resulted in
a supportable program level of only $20,931,000.
Under credit reform procedures, more recent data on interest rates
can affect actual funding levels that are available on October 1.
Because the supportable level decreased for 1997, the 1998 Budget
appears to be an increase of $4 million, but the original intent was to
have $25 million available in each year.
Question. The President's budget requests funds to support an
increase of $766,000 in Indian tribe land acquisition loans. The
explanatory notes show the level requested will provide 2 direct loans
in fiscal year 1998. Who has applied for these loans?
Answer. With the availability of funds in fiscal year 1998 for this
program, field staffs will be able to promote and receive applications
from Indian tribes interested in purchasing land for use by its
members. Based upon historical interest in this program, FSA
anticipates receiving, at a minimum, two applications for assistance.
Question. The fiscal year 1998 budget requests an increase of $11
million for credit sales of acquired property. The budget indicates
that this program will be targeted to new and beginning farmers. How
will new and beginning farmers be targeted for assistance by this
program?
Answer. The 1996 Farm Bill requires FSA inventory farms to be
advertised for sale to a beginning farmer or rancher no later than 15
days after acquisition. If no acceptable offer is received from a
qualified beginning farmer or rancher within 75 days of acquisition,
the property will be offered at a public sale to the highest bidder.
FSA offers financing through the credit sales program to beginning
farmers to purchase these properties during the 75 days in which the
properties are advertised for sale only to beginning farmers.
state mediation grants
Question. The President's fiscal year 1998 budget request is $4
million for State Mediation Grants, an increase of $2 million from
fiscal year 1997. The budget indicates that this request reflects the
anticipated level of grants needed for 25 States. Currently, 22
certified States are participating in the program. Have more than three
States applied to participate in the program? If so, which States? And
which 3 are proposed to receive assistance in fiscal year 1998?
Answer. There has been considerable interest by States in
participating in USDA's mediation program. In fact, the fiscal year
1997 funding level of $2 million was insufficient to fund all requests
by the 24 participating States. Florida and Missouri received
certification of their programs in fiscal year 1997, but lack of
Federal funding has forced these States to fund the programs
themselves, limiting their scope. Several States have scaled back their
programs or delayed planned expansions as a result of limited Federal
funding. USDA anticipates that Idaho and Pennsylvania will submit
certification applications soon, raising the total number of
participating States to 26.
Question. The USDA Inspector General released a report on the
agricultural mediation program administered by the FSA. The Inspector
General (IG) identified about ``$2.1 million in excessive or
questionable reimbursements of operating costs for activities that did
not involve mediation.'' The IG recommended that monitoring was needed
in order to disburse the appropriations properly. How has FSA
strengthened its monitoring efforts and addressed the need to institute
cost requirements?
Answer. FSA has reviewed the IG findings and accepts its
recommendations on providing closer scrutiny of State programs' grant
applications and has implemented many of these recommendations for
fiscal year 1997 grants. FSA and State mediation officials are
interested in jointly developing a common reporting format and uniform
performance indicators and measures to assist in evaluating State
programs' effectiveness. The Agency expects to publish revised
mediation regulations this year to provide uniformity to the grant
application and evaluation process.
The Agency believes IG relied on the Federal administrative dispute
resolution statute for a definition of mediation during its evaluation
of the State mediation programs. Because this definition of mediation
excludes various financial analysis, credit counseling, and other
services, the IG findings pertaining to the relative costs of mediation
by the State-certified programs overstate the questioned and
unsupported costs cited in the report. We believe State programs should
not be penalized over a definition of mediation that does not reflect
the flexibility designed to meet individual State needs. It is this
flexibility that makes the State mediation programs so successful.
Agency and State mediation officials are working on identifying the
information necessary to track cases for audit purposes, while at the
same time maintaining confidentiality, a cornerstone of successful
mediation. Certain data that is measurable and common to all State
programs will be gathered and reported to USDA to enable better
tracking of overall program effectiveness, efficiency, and
accountability. We believe this can be implemented to satisfy IG audit
needs, yet protect the integrity of mediation confidentiality.
dairy indemnity program
Question. The budget requests $100,000 for the Dairy Indemnity
Program for fiscal year 1998. How much of the fiscal year 1997
appropriation has been obligated to date?
Answer. Carryover fund balances of $157,305 from fiscal year 1996,
as well as the 1997 appropriation of $100,000, are available for
obligation needs of the program. As of April 8, the entire amount of
$257,305 has been obligated for this program, and subsequent claims
remains unfunded.
Question. What is the current balance in this account?
Answer. As of April 8, the unobligated balance is $0.
salaries and expenses
Question. The fiscal year 1998 request proposes a decrease of $64
million for FSA salaries and expenses reflecting a reduction of 1,784
direct county office staff years. USDA Secretary Glickman has announced
a moratorium on office closings through the end of the year.
Approximately how many county offices would be closed at the fiscal
year 1998 budget request level?
Answer. The 1998 Budget Appendix made mention of a reduction of
about 500 service centers, to 2,000, by the end of 1999. There was some
internal FSA contingency planning associated with the proposed county
staff year reduction because reductions of that magnitude imply some
office closings. However, no specific number of office closings were
built into the 1998 Budget, and no closures will occur without full
consultation with the Congress and approval by the Secretary.
Question. Are the proposed 1,784 direct county office staff year
reductions a part of the Administration's plan to reduce county office
staffing to 2,000 by the year 2000?
Answer. The proposed 1,784 direct non-Federal county office staff-
year reductions in the fiscal year 1998 budget estimate are a part of
the Administration's proposal to reduce non-Federal county office
staffing to a total of 4,879 by the end of fiscal year 2002. There are
no plans to reduce staffing below the 4,879 FTE level.
Question. What process will USDA use to reduce the number of county
offices in the States?
Answer. The total number of FSA offices within the USDA service
centers has not yet been determined. To assure that USDA provides the
best service possible to our customers, any decisions to close USDA
field offices or reduce an agency presence in a USDA service center
must be done in coordination with other agencies located at the site,
including Rural Development and Natural Resources Conservation Service.
The original office closing plan that was developed under Secretary
Espy focused on six basic criteria to allocate the office reductions:
program delivery cost, service group and customer base, complexity,
geographic service area, collocation status, and workload intensity and
productivity of the office. We would strongly consider the use of these
or similar criteria in any additional office closing effort.
Question. The Secretary announced that no county offices would be
closed this year. How much savings did you anticipate as a result of
county office closings in fiscal year 1997? Will you still achieve this
savings?
Answer. The fiscal year 1998 President's Budget did not assume any
county office closures or associated savings in 1997 beyond those
already approved under the Department's adjusted 1994 plan.
Question. As a result of the 1996 FAIR Act have farm program
changes decreased or increased the workload of the Farm Service Agency
and its staffing needs?
Answer. Generally speaking, the 1996 FAIR Act has reduced FSA
workload. For example, the pre-Farm Bill fiscal year 1997 President's
Budget Estimates prepared in January 1996 included county workload
staffing needs of 13,224 FTE's for fiscal year 1996. Following passage
of the 1996 Act in April 1996, FSA performed an internal workload
analysis that showed lower staffing needs for 1996, down to an
estimated 12,835 county office FTE's. The actual FTE's worked for 1996
were 12,738. FSA's analysis also showed declining workload for fiscal
year 1997, to 11,946 FTE's. Actual use of FTE's in 1997 will be
somewhat less than that. For fiscal year 1998, additional workload
decreases were projected in FSA's analysis, with workload stabilizing
thereafter. However, an independent study will be performed that will
seek to identify other operating efficiencies in order to achieve
further FTE reductions.
Question. How many RIF's and buyouts will occur in fiscal year
1997?
Answer. The most current data, as of April 7, 1997, shows a total
of 1,241 separations in Federal and county offices.
Question. What is the cost of the RIF's? What is the cost of
buyouts?
Answer. The total cost of the fiscal year 1997 separations is $42
million; buyout costs were $34.7 million and RIF costs were $7.3
million.
Question. What additional RIF's or buyouts are assumed for fiscal
year 1998? How will these be funded?
Answer. The fiscal year 1998 President's Budget proposal for the
FSA Salaries and Expenses account includes proposed funding of $56.2
million for separation costs in order to achieve staffing reductions of
2,119 staff years. This amount includes $6.7 million to separate 269
Federal office employees and $49.5 million to separate 1,850 non-
Federal county office employees. Because these separations are planned
for approximately October 1, 1997, salary and benefit savings of the
separated employees of about $64 million more than offset the
separation costs.
Question. What impacts will the proposed reductions in FSA
personnel have on FSA's ability to serve the crop insurance needs of
producers adequately and efficiently where the agency has maintained
FSA delivery?
Answer. The reductions in FSA personnel will require FSA to
prioritize workload in order to service the needs of all producers,
including crop insurance needs.
boll weevil eradication program
Question. Boll Weevil Eradication loans were funded in the fiscal
year 1997 Appropriations Act. The FSA has not yet released this money
because the regulations have not been promulgated. I understand that
the requirements for the environmental impact evaluation have been met,
and that APHIS has supplied FSA with all information the agency
requested. However, the regulations have not been published for
comment. It is necessary that these funds be available by May 15 so
that current planned programs can be continued and program expansion
can be initiated. Please provide an estimate of the amount of the loan
authority, which is approximately $35 million, that you expect to
utilize if the loan program is available.
Answer. All environmental requirements have been met and provided
there are no serious challenges to the environmental assessment, it is
anticipated that FSA will begin making Boll Weevil Eradication loans
within the next 45 days. At this time, we do not know how much of the
available loan authority will be utilized this fiscal year. A recent
recalculation of the program's subsidy rate has increased the loan
authority from approximately $35 million to $40 million.
Question. If this loan program is not established in fiscal year
1997, the money will not be available for the next fiscal year. Has the
USDA considered proposing that this funding be made available until
expended?
Answer. We have not asked for the funds to be made available until
expended. However, the Department would not object to having the funds
made no year funds to allow for unforeseen circumstances which could
impede utilization of the money this fiscal year.
Question. The Committee Report accompanying the fiscal year 1997
appropriations bill explicitly directs ``FSA local offices to require
cotton producers to report acreage planted in cotton in post-
eradication zones, active eradication zones, and any area in which a
referendum is scheduled to be conducted in the next 3 years.'' Please
provide an explanation of the status of this directive and the schedule
for action.
Answer. A Decision Memorandum for the Secretary on accepting
acreage reports for the Boll Weevil Eradication Program has been
drafted jointly by FSA and APHIS and is currently in clearance.
Question. What is FSA's position on collecting data for this
program?
Answer. The FSA position is included in the Decision Memorandum,
but we do not wish to preempt the Secretary's prerogative regarding
compliance with the congressional directive.
Question. Is FSA eliminating the commodity analysts subdivision
under the guise of reorganization or is FSA consolidating this
subdivision?
Answer. FSA has no intent of disbanding the Economic Policy and
Analysis Staff or any of its subgroups. Retention of a core group of
commodity and natural resource analysts working together recognizes the
synergy that exists between these analysts, which is necessary for
accurate and timely response to Administration, congressional, and
private sector concerns. Although this Staff has downsized
significantly, from 53 slots in January 1993 to 32 slots currently,
this downsizing reflects adjustments due to workload changes.
Question. What is your opinion regarding the need for a cotton
analyst in light of the Committee report language directive to collect
all cotton acreage data for the boll weevil program?
Answer. Regarding the collection of acreage data for purposes of
administering the Boll Weevil Eradication Program (BWEP), the exact
means by which the data should be collected, and by whom, are still
under discussion. We want the BWEP to succeed, and I am sure that the
necessary data will be collected in a manner which will meet the
program's objectives efficiently.
conservation reserve program
Question. The Conservation Reserve Program (CRP) sign-up closed on
March 28, 1997. How many acres were offered during the sign-up for
enrollment in the CRP?
Answer. The preliminary results of the March signup are that
301,649 offers were received to enroll 25,639,485.6 acres.
Question. How many of these acres are currently enrolled in the
CRP?
Answer. The offers included 18,081,930 acres that are currently in
CRP.
Question. What amount is new?
Answer. The offers included 7,557,555 new acres.
Question. When will you notify the farmers that their land has been
accepted into the program?
Answer. We anticipate notifying producers whether their CRP offers
are accepted by June 2, 1997.
Question. Has Secretary Glickman made a decision whether to enroll
the full 19 million acres or stick with the recent announcement that
only 17 million acres would be enrolled to save money to fulfill a
Clinton campaign promise to buy a mine on the edge of Yellowstone? If
not, then when should we expect this announcement?
Answer. A final decision on the purchase of the New World Mine has
not yet been made. The Administration is still exploring various
options for providing an offset for the costs of this acquisition, and
an announcement will be made, hopefully in the near future, when this
decision is reached.
information technology
Question. The 1996 FAIR Act limits the use of Commodity Credit
Corporation (CCC) funds for operating expenses. It limited the amount
for the six year period fiscal year 1997-2002 to $275 million to be
spent on information technologies and automated data processing. The
fiscal year 1998 budget assumes expenditures for computer and
telecommunications equipment will total $109 million in fiscal year
1997 and $104 million in fiscal year 1998. Is FSA currently subject to
the Department's moratorium?
Answer. Yes, FSA has been operating under the information
technology Investments Moratorium since Deputy Secretary Rominger
issued the notification memo on November 12, 1996.
Question. What will these monies be used for exactly?
Answer. The estimates included in the budget were prepared prior to
the Secretary's moratorium and do not represent spending with the
moratorium in place. The fiscal year 1997 and fiscal year 1998 CCC
monies in the budget reflect information technology requirements in
support of all FSA program missions. The missions that USDA must
execute under the Farm Bill and other recent legislation hold promise
for increasing service and reducing cost to the taxpayer. It is equally
true that revised responsibilities assigned to the FSA, newly
established service centers, crop insurance reform initiatives such as
the nationwide non-insured crop disaster assistance program and
catastrophic insurance coverage in underserved States, the Conservation
Reserve Program, administrative support for the Environmental Quality
Incentives Program, and realigned farm loan activities require an
ongoing information technology infrastructure to deliver services.
The following major budget categories show how the monies (dollars
in thousands) are distributed in the fiscal year 1998 Budget. However,
these estimates are subject to subsequent OMB apportionment and
reevaluation.
[Dollars in thousands]
------------------------------------------------------------------------
Fiscal year--
-------------------------
1997 1998
------------------------------------------------------------------------
Hardware and software......................... $56,617 $19,195
Operations and maintenance.................... 21,806 26,418
Systems analysis, programming................. 15,858 46,211
Studies and training.......................... 10,521 4,371
Digital orthophotography...................... 2,000 6,000
Other......................................... 2,149 1,962
-------------------------
Total................................... 108,951 104,157
------------------------------------------------------------------------
FSA State and county offices mainly rely on mid-1980 information
technology to deliver program benefits. Recent engineering upgrades to
minicomputers supporting the FSA programs have stabilized an important
piece of the support structure necessary to sustain operations required
by the Farm Bill. However, workstations in excess of 12 years old,
along with printers near the end of their useful life, increasingly
risk disruptions of service to the customers and will need emergency
attention. Approximately 10 percent of each year's budget is for
maintenance of the current ADP delivery system in the field. Efforts
are underway to replace this technology through the USDA Service Center
(SC) Initiative, a collaborative project involving several USDA
agencies--NRCS, RD and FSA. CCC fiscal year 1997 funding of $28.0
million (25.7 percent of the fiscal year 1997 total) is identified
towards purchase of a common computing platform for SC's. FSA/CCC's
share of other SC initiatives total $20.5 million (18.6 percent) in
fiscal year 1997 and $35.8 million (33.7 percent) in fiscal year 1998.
During the first quarter of fiscal year 1997, the placement of the
technical infrastructure (integrated telephone and data communications)
needed to support SC's was started. Target completion of this phase is
December 1997. After partner agencies complete business process
reengineering/improvement projects which will streamline and improve
program delivery, the next phase will involve the establishment of a
common computing environment for SC's supporting those business
functions. This common computing environment will improve delivery of
mission critical programs to FSA and other SC agencies producers, and
advance USDA initiatives of reduced customer burden, better customer
service, and easier and more timely information sharing. FSA is also
providing funding support for the acquisition of digital
orthophotography and maximization of data sharing opportunities within
the current systems.
Other major efforts supported with this budget are the integration
of FSA's divergent program and administrative information technology
systems and support, continued operations and programming support for
the Processed Commodities Inventory Management System ($4.75 million
each year), modification of the financial management systems of the CCC
(approximately $4 million each year), and continued use of contractor
support for other agency systems that support program delivery and
require modifications to accommodate the Year 2000 conversion project.
Question. How much did the FSA spend on information technologies
and automated data processing in each of the last 5 fiscal years?
Answer. A table showing the actual amount of CCC funds used for
equipment and other ADP-related costs for the last 5 years follows.
[The information follows:]
COMMODITY CREDIT CORPORATION
ADMINISTRATIVE EQUIPMENT (REGULAR AND ADP) AND OTHER ADP-RELATED COSTS FUNDED BY CCC--FISCAL YEARS 1992-96
ACTUALS
[Full dollars]
----------------------------------------------------------------------------------------------------------------
Fiscal year--
-------------------------------------------------------------------------------
1992 actual 1993 actual 1994 actual 1995 actual 1996 actual
----------------------------------------------------------------------------------------------------------------
I. Equipment
Regular equipment--CCC.......... $15,346,665 $6,208,352 $6,429,364 $13,716,592 $7,033,727
ADP equipment--CCC.............. 17,500,139 25,531,707 12,543,782 45,917,735 87,235,770
-------------------------------------------------------------------------------
Total CCC equipment....... 32,848,804 31,740,059 18,973,146 59,634,327 94,269,497
Info Share equipment............ .............. .............. .............. 643,759 ..............
-------------------------------------------------------------------------------
Total CCC equipment....... 32,848,804 31,740,059 18,973,146 60,278,086 94,269,497
===============================================================================
II. Other ADP-related costs
Space/site prep./utilities...... 109,913 109,381 .............. .............. ..............
Supplies/transportation......... 439,657 1,085,131 1,198,131 1,844,226 1,988,662
Commercial services............. 26,472,158 27,858,848 23,838,608 29,438,603 54,458,169
Inter/intra agency services..... 743,170 933,159 9,626,048 2,241,000 5,160,828
Kentucky Pilot (SCIT)........... .............. .............. .............. .............. 103,849
-------------------------------------------------------------------------------
Subtotal.................. 27,764,898 29,986,519 34,662,787 33,523,829 61,711,508
===============================================================================
Info Share--Other costs:
Legacy System............... .............. .............. .............. .............. ..............
Fast Track.................. .............. .............. .............. 959,403 ..............
-------------------------------------------------------------------------------
Subtotal.................. .............. .............. .............. 959,403 ..............
===============================================================================
Total other costs......... 27,764,898 29,986,519 34,662,787 34,483,232 61,711,508
===============================================================================
Grand total, CCC.......... 60,613,702 61,726,578 53,635,933 94,761,318 155,981,005
----------------------------------------------------------------------------------------------------------------
non-insured assistance program
Question. Since the inception of the non-insured assistance program
(NAP), problems have arisen regarding the geographic area used to
determine a loss and trigger payment, the delivery of payments once a
disaster is declared, and a general misunderstanding of the program.
What is the status of NAP?
Answer. FSA has received 979 NAP area requests/recommendations for
the 1995 and 1996 crop years. Of these, 705 have been approved, 105
have been disapproved, 73 were either withdrawn or canceled, and 96 NAP
area recommendations remain on hand.
Question. Has the agency taken any action to address the problems
mentioned above?
Answer. FSA issued multiple program directives to State and county
offices in 1996 to provide updated instructions that addressed new
program provisions as well as issues raised by field offices. Many of
these directives provided clarifications to procedures for assembling
NAP area recommendations and addressed crop and producer eligibility
issues.
FSA also provided on-going training to State office specialists by
rotating these personnel into headquarters on two-week temporary
assignments. This initiative had a significant impact on improving the
knowledge and expertise of FSA staff who were delivering the program at
the field office level. FSA issued a new NAP handbook, 1-NAP, on March
28, 1997. In addition, FSA is conducting national NAP training April 8
through April 11, 1997. State offices will provide subsequent training
to county office personnel immediately following the national training
sessions.
Handbook 1-NAP and the national training were critically needed.
Improvements in the quality of analyses and documentation provided in
support of NAP area requests are already apparent. The instruction and
training provided to FSA personnel will help expedite NAP area
recommendations and delivery of the program.
Notwithstanding the progress made over the past 12 months, there is
unfinished work. FSA plans to provide improved automated tools at all
levels that will support information management initiatives, perform
computations of eligibility, and process loss claims, applications for
payment, and annually reported acreage and production data.
One difference between NAP and the former ad hoc disaster payment
programs is ``area eligibility.'' Prior to 1995, an individual producer
of a crop suffering a loss due to eligible disaster conditions was
basically eligible for payment consideration without regard to whether
the crop, and possibly other disinterested producers, suffered an
aggregate area loss in excess of some threshold. The NAP concept of
extending disaster-type assistance only in cases where a widespread
catastrophic loss occurred in a geographical area was somewhat new to
many producers and FSA offices. We believe employees and producers are
becoming more familiar with this concept.
______
Questions Submitted by Senator Burns
farm loan delinquencies
Question. It is my understanding that a moratorium is in effect on
farm foreclosures. What I would like to know is the number of farm
loans and dollar amounts that are delinquent for one year, five years,
ten years, fifteen years, and over fifteen years?
Answer. We are unable to provide the information in the detail you
requested. However, the following reflects delinquency status of direct
loans as of March 31, 1997. Number of borrowers: One payment
delinquent, 18,252; two payments delinquent, 2,946; and more than two
payments delinquent, 4,756.
Question. As a supporter of the family farmer, I do have some
concern over the number of delinquent loans. What kind of message does
this send to farmers who are paying their loans or to other government
borrowers who pay their loans?
Answer. The FSA is sending this message to its borrowers: we expect
repayment of funds lent to you. We will work with borrowers who are
experiencing a temporary inability to make regular repayments through
circumstances that are not their fault.
Question. When will the moratorium be lifted and what plans does
your agency have for loans that are multi-year delinquent?
Answer. FSA does not have a moratorium on foreclosures. The
Secretary has suspended foreclosure sales until a review is completed
to make sure that no program inconsistencies or discrimination is
found. This demonstrates that the Agency is performing the task
assigned to it by Congress in making every effort to eliminate any
inequitable treatment in the delivery of its programs.
Under current statute, the Agency is required to notify all
borrowers who are 60 days delinquent of their right to apply for
Primary Loan Servicing to resolve those delinquencies within the
Agency's authority to reschedule, defer, or write down the loans. If
their operations cannot show a possibility of success even with these
options, they are offered the opportunity to purchase their debt at the
current market value of the security. Only after these options have
been considered does the law allow the Agency to proceed to
foreclosure. With the right to appeal at every step of the process,
this procedure can take several years. When all other possibilities are
exhausted, the Agency does pursue foreclosure in accordance with the
laws of the State in which the borrower lives.
Question. When and how does your agency determine that a loan is so
seriously delinquent that there is no possibility of repayment?
Answer. If a delinquent loan cannot be brought current through
rescheduling, deferral or write down, or debt cancellation in exchange
for a conservation contract, the Agency assumes that repayment is not
possible, and the borrower is provided the opportunity to purchase it
at the market value of the security. If this cannot be accomplished,
other methods of debt settlement are discussed with the borrower and
then foreclosure is pursued, if necessary.
use of auctions
Question. Your agency has been reluctant to use auctions when
selling foreclosed farms; what is your reasoning for not using auctions
more often?
Answer. Federal law requires the Agency to advertise its inventory
farms suitable for agriculture to new and beginning farmers at their
current market value, based on an FSA appraisal. If there is more than
one such applicant, the winner is chosen by a random drawing; no
bidding is allowed between these applicants. Auctions, sealed bids and
other methods of sale can be and are pursued only if no new or
beginning farmer expresses an interest in purchasing the farm.
Question. I have been told that before a farm property can be sold
at auction, the use of an auction must be approved by headquarters in
Washington. Other sales methods do not have to be approved by
Washington, why is that requirement in place for auctions?
Answer. There is no such requirement. Auctions may be used at the
option of the respective State Office, as long as no new and beginning
farmers have applied or been found qualified to purchase the farm. If
the cost of an auction firm exceeds the State's authority to contract
for small purchases, the sale would require approval from Washington
for contracting reasons, but not for the use of an auction as such.
crp and crown butte
Question. In questioning it was stated that there would be no
impact on the farmer in the use of CRP funds to pay for Crown Butte. I
would like to hear your reasoning on this and how you would explain
that to a farmer that is expecting payment of CRP land this year, that
might lose out due to this action?
Answer. The proposal has no impact on acreage currently under
contract but would delay the enrollment of acreage for one year. Since
all offers to participate in CRP are evaluated in comparison to the
environmental benefits and costs of other offers, whether or not an
offer is accepted is primarily dependent on the quality of the offer.
fsa field office closures and personnel changes
Question. In the hearing you stated that it is not proper to have
county committee personnel overseeing Federal personnel. Is this law,
and what would be necessary to make the current operation legal?
Answer. The Federal Crop Insurance Reform and Department of
Agriculture Reorganization Act of 1994 provides that Federal and non-
Federal employees can be used interchangeably, but a non-Federal
employee cannot supervise a Federal employee. Operating a dual employee
delivery system at the county level has been difficult. Recently, the
USDA Civil Rights Action Team (CRAT) recommended that the FSA county
committee system be modernized by converting all county non-Federal
positions to Federal status. The Secretary will be submitting a
legislative package later this year to Congress supporting the
conversion of all FSA non-Federal positions to Federal status.
Question. I can understand the need for closing offices in areas of
high concentration, but does the agency propose closing offices in
highly rural areas with long distances between offices, and what is the
rationale for these closures?
Answer. Workload levels reflect the staffing resource needs at a
given location and not necessarily whether a physical presence is
needed. A large workload office is generally more efficient than a
small workload office because of the numbers of employees available to
perform specialized services and the general efficiencies associated
with volume transactions. A criterion such as a minimum 25 mile limit
between offices reflects an assumption associated with all producers
having reasonable access to service. In the 1930's when most USDA
offices were established, local transportation was limited. Today, with
the significant improvements in transportation and the technological
capabilities available, the distance a producer would travel to receive
services can be increased without any significant hardship. Workload is
certainly an important factor in determining staff levels for field
offices and will be considered in FSA's analysis of ways it will
operate within budget realities and how it will apply staff reductions.
However, other factors must also be considered to assure that USDA
provides customers the best service possible. Any decisions to close
USDA field offices or reduce an agency presence within a USDA service
center must be done in coordination with the other agencies involved,
including Rural Development and the Natural Resources Conservation
Service.
______
Questions Submitted by Senator Bumpers
disaster assistance
Question. Do the estimates in the supplemental request for the
Emergency Conservation Program (ECP) reflect losses from tornadoes in
Arkansas, flooding along the Ohio River, and other events that have
occurred since March 1st?
Answer. On March 19, 1997, the President submitted a $20 million
supplemental request to Congress for the Emergency Conservation Program
and a request for an additional $17 million in contingency funding. The
estimates partially reflect losses due to natural disasters since March
1st. The amount being requested will fund losses in the western States
due to the January flooding but fund only part of the pending requests
due to tornado damage in Arkansas and flood damage along the Ohio
River. Estimates related to flooding in North Dakota, South Dakota, and
Minnesota cannot be made until the flood waters have receded.
Question. Do the estimates include anticipated damage from the snow
melt in the upper plains?
Answer. The $17 million contingency was for ``spring flooding,''
including flooding due to snow melt.
Question. Do you believe the contingency amounts included in the
request will be adequate, especially given the fact that these
estimates were made far in advance of receding flood waters or more
recent storm events?
Answer. We don't really know the magnitude of the need at this
time, given the more recent storms occurring in various locations
across the country.
emergency farm loans
Question. I further note the supplemental request includes no
funding for emergency farm credit. Do you think the carryover of
emergency farm credit will be adequate given the magnitude of current
and anticipated losses?
Answer. The supplemental request did not include additional funding
for FSA's emergency loan program since, at the time it was prepared,
FSA believed that it had adequate funds available to cover the flooding
in the Northwest assuming no further widespread disasters occurred. The
recent blizzards and flooding in the Midwest could not have been
anticipated. Given the magnitude of these new disasters, the remaining
emergency loan funds will not be sufficient to meet the demand for
loans for the remainder of this fiscal year.
Question. Could you please provide State by State estimates of
identified and projected needs for all emergency assistance under the
jurisdiction of your agency relating to those events?
Answer. It is too early in the disaster recovery process for many
areas to project the need for emergency assistance for the remainder of
the year. We are still assessing the scope of potential loan demand.
disaster contingency reserve
Question. Rather than requesting an amount for ECP in fiscal year
1998, you suggest the establishment of a contingency reserve for
disaster assistance. Who would have the authority to use this reserve
and how would it be triggered?
Answer. The President's budget proposes that the Congress
appropriate $5.8 billion as a contingency fund for use through
specified disaster assistance programs including the Emergency
Conservation Program. The proposed contingency fund would be
administered by the Office of Management and Budget on behalf of the
President, but only the President could make funds available. The
release of any amount of the contingency fund could not occur until 15
days after the President has officially notified the Congress. This
built-in constraint is designed to give Congress time to respond, but
also ensures that the Government will be able to assist communities
stricken by a natural or other disaster in a timely way.
Question. Which appropriations subcommittee would likely be
responsible for funding?
Answer. Since the contingency funds would be appropriated to the
President, we assume that the funding request would be considered by
the House and Senate Appropriations Subcommittees on Treasury, Postal
Service, and General Government.
section 11 reimbursables
crp
Question. You indicate you will notify producers by mid-June of CRP
enrollments using NRCS technical assistance. Do you intend to reimburse
NRCS for that service using section 11 authorities?
Answer. In fiscal year 1997, no Section 11 CCC funds will be used
to pay CRP technical assistance for NRCS. Unobligated funds from the
appropriated CRP account will be for used for NRCS and Forest Service
CRP technical assistance until the funds are fully expended.
Question. Would you be able to enroll those areas if NRCS was not
provided funds through this subcommittee for any technical assistance
for those programs converted to direct spending from the CCC?
Answer. As noted above, the source of funding for NRCS technical
assistance for the fiscal year 1997 CRP program is unobligated CRP
appropriated funds. NRCS would be unable to provide the necessary
technical support needed to implement the CRP without any technical
assistance funds.
Question. Is the fact that the fiscal year 1997 and 1998 estimates
for section 11 transfers are below the 1995 amounts an indication that
the conservation technical assistance is not needed to implement CRP
and WRP and similarly situated programs as much as in previous years?
If so, how can that be true in light of the new ``environmental
benefits'' test for CRP which, I would imagine, will require an
extensive analysis by NRCS?
Answer. The budget projects annual spending under the cap on
Section 11 reimbursable agreements will total $41.2 million in fiscal
year 1997 and $35.6 million in fiscal year 1998. CCC obligations for
Section 11 activities in fiscal year 1995 were $45.6 million. The
fiscal year 1997 level is below fiscal year 1995 because CRP and
Wildlife Habitat Incentives Program technical assistance costs in
fiscal year 1997 are being funded from unobligated funds in the CRP
appropriated account and not Section 11 transfers. Fiscal year 1997 CCC
transfers would have been at the 1995 level without this ability to use
CRP unobligated funds for technical assistance costs in fiscal year
1997. The fiscal year 1998 level of $35.6 million is $10 million below
the fiscal year 1995 level because of the proposed shift in FAS'
Emerging Markets Technical Assistance program from the CCC Section 11
reimbursable agreement to an FAS appropriation. In subsequent years,
the full $45.6 million will be available for expenses, with the
Emerging Markets funded elsewhere.
Question. You estimate that you have used $83 million in carryover
funds from CRP to fund the technical assistance portion of that program
and that you estimate you will use $24 million in carryover funds in
fiscal year 1998. How much is left in the CRP carryover account?
Answer. At the end of fiscal year 1996, there was approximately
$111 million in unobligated funds in the CRP appropriated account. The
budget also projects that $4 million in refunds of prior year payments
will be credited to the CRP account in both fiscal years 1997 and 1998.
Only a small amount of funds will be left in the CRP account after 1998
since $12.5 million will also be used for the Wildlife Habitat
Incentives Program as authorized by Section 387(c) of the Federal
Agriculture Improvement and Reform Act of 1996.
Question. What do you intend to use for this purpose when the
carryover funds are depleted?
Answer. It is estimated that a very small amount of carryover funds
from the CRP account (resulting from refunds of prior year payments)
will be used in fiscal years 1999 through 2002 to pay CRP technical
assistance costs. Section 11 funds will be used to pay technical
assistance as long as the total level of CCC Section 11 transfers does
not exceed $45.6 million. In some years it may be possible for
technical assistance needs to exceed available funding.
flood risk reduction program
Question. What has been your experience with the Flood Risk
Reduction Program in fiscal year 1997?
Answer. Regulations are currently being drafted to seek comments on
program implementation. It is anticipated that the program will be
offered beginning October 1, 1997.
Question. Why are you not providing an estimate for fiscal year
1998?
Answer. The funding source is the CCC AMTA funding. Participants
earn 95 percent of their AMTA payments in one up-front payment. The
President's Budget assumed that the one up-front payment would be made
in fiscal year 1997 with no payments in subsequent years. However,
based on current estimates, the one up-front payment will be made in
fiscal year 1998 instead of fiscal year 1997. FSA economists estimate
4.7 million acres classified as frequently flooded to be eligible for
the Flood Risk Reduction Program. Flood risk reduction payments in
fiscal year 1998 would be about $266 million, offset by reductions in
production flexibility contract payments of about $284 million during
fiscal years 1998-2002.
Question. Why was this program not assigned to NRCS along with
other conservation programs?
Answer. The Flood Risk Reduction Program (FRRP) is not a
conservation program. The Secretary assigned FSA the responsibility of
administering the FRRP because FRRP contracts are offered as an
alternative only to those producers with production flexibility
contracts (PFC) administered by FSA under the Agricultural Market
Transition Act. FRRP payments are directly correlated to the PFC
payments issued by the Commodity Credit Corporation that the producer
would otherwise receive. Also, the majority of program benefits that
FRRP participants are required to forgo are administered by FSA. FRRP
participants must meet the highly erodible land and wetland
conservation provisions. However, there are no other conserving use or
other conservation requirements for producers who enroll in FRRP.
boll weevil eradication
Question. What is the status of implementing the Boll Weevil Loan
Program for fiscal year 1997?
Answer. It is currently projected that FSA will begin accepting
applications for the Boll Weevil Eradication Loan program in the next
45 days provided that no unforeseen circumstances delay its
implementation.
Question. Why did FSA not include this program in the budget
request for fiscal year 1998?
Answer. With regard to fiscal year 1998 funding, it is the
Department's understanding that the Boll Weevil Eradication Loan
program was not intended to replace the cost-share grants provided by
APHIS to the foundations that operate the boll weevil program at the
State level. Rather, the program was intended to allow the foundations
to finance their share of the program costs, at a minimal Federal
subsidy cost. In the past, the Department has worked with some of the
foundations in response to inquiries about using the business and
industry guaranteed loan program to assist in obtaining credit from
private lenders. It remains the Department's position that the credit
needs of the boll weevil eradication program can be adequately
addressed through existing programs, such as the business and industry
guaranteed loan program, and that there is no reason to maintain a
separate program for this purpose.
farm credit
Question. Since enactment of Beginning Farmer legislation earlier
this decade, what has been the rate of graduation?
Answer. Regulations for implementing the graduation provisions of
the Beginning Farmer legislation went into effect last year. Between
October 1, 1996, and March 31, 1997, a total of 2,517 borrowers has
graduated to commercial credit. This figure represents some duplication
for individual borrowers with more than one type of loan, such as an
operating loan and a farm ownership loan.
loan subsidy rates
Question. You mentioned you expect a reduced cost of farm credit
programs due to efforts to reduce loan delinquencies. Do you know if
CBO is willing to translate those efforts into lower subsidy rates?
Answer. The Agency is unaware of any CBO requirements related to
subsidy rates. The subsidy rates are calculated following OMB's
requirements as stated in OMB Circular A-11, Preparation and Submission
of Budget Estimates, dated June 1996. The calculation of loan subsidy
costs is based on two factors: (1) explicit technical terms and
conditions, and (2) the Treasury discount interest rate. Loan
delinquencies are only one of many explicit technical terms and
conditions used to calculate the subsidy rate. The Treasury discount
rate is provided directly by OMB, and all explicit technical terms and
conditions, including reduced loan delinquencies, are approved by OMB
before use in the President's Budget.
Question. Also, recent shifts in interest rates indicate that the
program level per dollar of BA may be falling. In order to prevent
program levels from falling below your budget estimates, will you
provide this subcommittee current reestimates of loan subsidy costs to
better coordinate the effective program level in these accounts for the
coming fiscal year?
Answer. Although the Agency could, with OMB approval, provide
current reestimates for fiscal year 1998 loan subsidy costs, any
revision to the Treasury interest rate component would again be an
estimate. The actual program level for fiscal year 1998 will not be
known until the Treasury interest rates in effect on October 1 are
published through the Commerce Economic Bulletin Board.
Explicit technical terms and conditions used in the President's
Budget to calculate loan subsidy costs cannot be changed except by
permission of OMB and only to reflect enacted legislation and any
regulatory action which affects the making or guaranteeing of loans.
Currently, the only change allowed between the subsidy cost estimated
for the President's Budget and the actual subsidy cost calculated on
October 1 is the difference between the Treasury discount rate
estimated by OMB for budget formulation and the Treasury rate in effect
on October 1, 1997.
state mediation program
Question. Can you document the Federal savings achieved by the
State Mediation Program, on an annual basis, since the program was
first established?
Answer. Federal savings achieved by the State Mediation Program
remains a difficult area to assess. Depending on what assumptions are
used, the amount can vary greatly. Savings to the Federal Government is
apparent when mediation results in a restructured loan which offers a
greater return than a net recovery buy out. Mediation also saves staff
time and effort by quickly resolving the dispute outside of the appeals
or court system. However, these savings are difficult to quantify
because the costs can vary substantially depending on the nature and
complexity of the issues involved.
The Marketing and Economics Division at the Alabama Department of
Agriculture and Industries reported in its September 30, 1995, annual
report that their benefit-to-cost ratio for agricultural mediation is
estimated to be $8.00 in benefits for every $1.00 of mediation costs.
Researchers at Texas Tech University studying the Texas Agricultural
Loan Mediation program reported that creditors in Texas received an
estimated $4.14 in benefits for every $1.00 in providing mediation
services. The Oregon Department of Agriculture reported in its
September 1995 annual report that the benefit-to-cost ratio was
estimated at $2.56 to $1.00 for mediation program expenditures.
Annual funding has been $2 to $3 million for the State Mediation
Program. A high estimate of net annual Federal savings, using the
Alabama benefit-to-cost ratio of 8 to 1 and an annual funding level of
$3 million, is $21 million. A low estimate of net annual Federal
savings, using the Oregon benefit-to-cost ratio of 2.56 to 1 and an
annual funding level of $2 million, is $3.12 million. Legal fees and
costs for administering or selling a property through foreclosure or
bankruptcy and the added costs of maintaining a non-performing asset on
the books are often avoided by mediation but are difficult to estimate
and are not included in these estimates.
Question. Are you aware of the OIG report released to this
subcommittee on March 4, 1997?
Answer. Yes, we are.
Question. I understand that one of the findings of the OIG was that
State agencies administering this program would not release mediation
documents when, in fact, State statutes clearly provide for the
confidentiality of such records and provide for a means, through the
courts, for parties such as OIG to obtain them. To your knowledge, did
OIG make attempts to secure records pursuant to the means provided by
law?
Answer. OIG conducted audits of State mediation programs in
Michigan, Minnesota, North Dakota, and Texas. Program officials in
these States denied OIG access to certain mediation records considered
confidential under their State laws. State laws governing mediation
confidentiality vary, but most State programs are subject to such laws.
OIG has not pursued such records by issuing subpoenas under its
subpoena authority. State mediation officials have advised FSA that
they will comply with any court order to release mediation records to
OIG, as this will satisfy their State confidentiality statutes.
Question. Why is confidentiality important to the integrity of the
mediation process?
Answer. Confidentiality in the mediation process is very important.
The basic concept of mediation is to allow parties a free and open
forum in which to air differences without the fear of retaliation.
Confidentiality is the cornerstone of successful mediation in each
State and without this assurance, participants cannot feel comfortable
in expressing their feelings and discussing personal information.
Question. Has your agency had any difficulty obtaining necessary
information from the State administrating agencies?
Answer. Each State is able to generate a list of producers with
whom FSA has entered into mediation. The case files of each of these
producers are available for USDA review in the FSA county office. FSA
believes that these records will allow USDA to evaluate program actions
resulting from the mediation process.
The structures and formats of State programs differ greatly and
were designed to reflect individual State needs. FSA has worked and
continues to work with State mediation officials to improve the
information reporting on mediation services. Certain data that is
measurable and common to all State programs will be gathered and
reported to USDA to enable better tracking of overall program
effectiveness, efficiency, and accountability. Reporting requirements
will need consideration, so as not to overburden State programs with
excessive paperwork which might divert scarce funds and staff from the
field work of providing the actual mediation services.
ccc reimbursement for net losses
actual status of ccc losses
Question. Since the reimbursement for net losses in fiscal year
1999 is estimated at $9 billion (compared to $784 million for fiscal
year 1998) due to changing the reimbursement period from a one-year to
a two-year timeframe, what does this really tell us about the current
state of net losses?
Answer. In recent years, the appropriations to CCC have been
gradually reducing the large balances of unreimbursed losses from
previous years. Cumulative unreimbursed realized losses decreased from
$26.9 billion at the end of fiscal year 1993 to $2.3 billion at the end
of fiscal year 1996. The fiscal year 1996 appropriation completed this
process by fully restoring all cumulative unreimbursed realized losses
through fiscal year 1995 and a portion of fiscal year 1996 losses. In
prior years, the request for appropriations to reimburse the CCC for
net realized losses has been based on an estimate of losses incurred
one year earlier which have not been previously reimbursed. The
estimate could exceed or fall short of the actual amount of loss.
Beginning in 1998, in response to OIG recommendations, the request for
appropriations to reimburse CCC for net realized losses will cover the
actual amount of all unreimbursed losses incurred two years earlier.
The 1998 budget requests $784 million for the balance of 1996 losses
not reimbursed through appropriations in 1996 and 1997. 1996 losses
totaled $7.8 billion, of which $5.5 billion was restored by
appropriations in 1996 and $1.5 billion was restored by appropriations
in 1997, leaving a balance of $784 million to be restored in 1998.
Appropriations to reimburse CCC for net realized losses incurred in
1997, currently estimated to total $9.002 billion, will be requested in
the 1999 budget at their actual recorded level.
Question. In other words, what would the fiscal year 1998 estimate
be if we continue a one-year basis for reimbursements?
Answer. The fiscal year 1998 estimate would be $9.786 billion if we
continued a one-year basis for reimbursements. This would include $784
million for the balance of 1996 losses not reimbursed through
appropriations in 1996 and 1997, and $9.002 billion for net realized
losses estimated to be incurred in fiscal year 1997. While this
approximate level would keep the Corporation essentially fully
reimbursed at the time of appropriation, CCC's available borrowing
authority will continue to be adequate to finance expected expenditures
on the two-year basis for loss reimbursement.
higher cost of freedom to farm
Question. Have you been able to determine what your fiscal year
1997 and fiscal year 1998 outlays from CCC would have been without the
changes in the 1996 Farm Bill, specifically the so-called Freedom To
Farm payments?
Answer. The 1996 farm bill made profound changes in the way direct
payments are made to producers. First, production flexibility contract
payments under the new farm bill are no longer tied to market prices
and are determined by amounts specified in law. Second, crop payments
are now made in 1 fiscal year, unlike under the 1990 farm bill
provisions when payments were issued over 2 or more fiscal years.
Due to the timing differences of deficiency payments under an
extended 1990 farm bill versus the production flexibility contract
payments, a comparison of spending by fiscal years would be misleading.
Therefore, we have estimated what direct payment outlays would have
been under an extension of the 1990 farm bill provisions for the 1996
and 1997 crops.
In projecting what the costs of an extension might have been,
certain assumptions were made. We assumed that prices under an
extension of the 1990 farm bill would not be much different than
current prices except for rice, and, therefore, prices were set to
equal the prices in the May 1997 ``World Agriculture Supply and Demand
Estimates'' except that we used internal price projections for cotton
because the Department is prohibited from publishing cotton price
projections. Rice prices were lowered about 15 percent because
additional acreage would have been planted under an extension of
previous law. Acreage reduction percentages were assumed to be zero for
all commodities.
Production flexibility contract payments for 1996 equaled about
$5.4 billion. If an extension of the 1990 farm bill provisions were
applicable to the 1996 crop, deficiency payments would have been less
than $0.7 billion, about $4.7 billion less than the contract payments.
Deficiency payments for wheat, corn, barley and oats would have been
zero because farm prices exceeded their target prices, but payments
would have been made for rice, cotton and sorghum.
Production flexibility contract payments for 1997 are about $6.4
billion. 1997 crop deficiency payments would have been about $2.7
billion, $3.7 billion less than the contract payments. Deficiency
payments would have been issued for all crops, except oats.
farm safety net--extension of commodity loans
Question. You want discretionary authority to extend commodity
loans by 6 months. Historically, cotton loans have been extended for
longer periods than other commodities. Do you intend to provide for
this historical trend to continue?
Answer. Under current law, we have no authority to extend any crop
loans. To provide a safety net for farmers under adverse price
circumstances, we proposed that the Secretary be granted authority to
extend loans for cotton and other commodities for 6 months. Should that
proposal be enacted, we would have no authority to treat cotton any
differently from other commodities.
farm safety net--fruit and vegetable planting flexibility
Question. Why do you plan to change the flexibility provisions for
fruit and vegetable planting on transition acres?
Answer. We believe a legislative change permitting the planting of
fruits and vegetables (FAV's) following a contract commodity that is
prevented from being planted or has failed due to adverse weather
(ghost-crop provision) without a reduction in AMTA payment is
warranted. Enactment of this change would merely allow producers to
regain an option that had been available to them in 1995. We do not
believe that FAV producers would be unfairly disadvantaged by the
restoration of this provision.
Question. Does this reflect a change in your position during the
1996 farm bill debate?
Answer. No.
Question. What effect will this change have on traditional fruit
and vegetable producers?
Answer. None. Since the proposal is an extension of law that was in
place prior to 1996, there would be no impact on fruit and vegetable
plantings.
salaries and expenses (office closings)
Question. Since one of the goals of USDA reorganization has been to
reduce more of the headquarters positions than those in the field, why
is the percentage of reduction of non-Federal (county) employees so
much larger than the proposed reductions for Federal employees?
Answer. The FSA has been making staffing reductions over the past
several years. From fiscal year 1993 to the current fiscal year 1997,
the Agency has reduced total staffing 21 percent. These reductions
reflect an overall 19 percent reduction in Federal staff years,
including 27 percent at Headquarters, and a 22 percent reduction in
non-Federal staff years. Overall, the Headquarters staff reduction
percentage exceeds the field staff reduction. As you stated, fiscal
year 1998 and the years through fiscal year 2002 reflect major proposed
decreases in FSA non-Federal staff years. The fiscal year 1998 Budget
proposes a reduction of 2,119 staff years for fiscal year 1998, of
which 269 are Federal staff years and 1,850 are non-Federal staff
years. It should be noted that although non-Federal staffing is being
reduced by the programmatic impacts of the 1996 Act, rather than
reorganization, the projected fiscal year 1998 Federal work force of
5,877 includes approximately 2,265 employees at the county level
performing Agricultural Credit program workload for direct and
guaranteed loans. Furthermore, there are an additional 1,463 Federal
FTE's at the State office level, including personnel that support farm
credit activities as well as CCC activities, that perform program
oversight, supervisory, and other support functions. In general then,
Federal should be not be construed to mean Headquarters rather than
field personnel.
Question. Is this a reflection of action already taken to reduce
Federal positions?
Answer. No. Although I indicated earlier that relatively large
reductions in Federal employment, especially at Headquarters, have
taken place, the proposed reduction of non-Federal employees in 1998 is
not an attempt to ``catch up'' on any ratio. Rather, it simply reflects
that earlier years' reductions were driven by reorganization and
government-wide streamlining objectives, while the more recent
reductions in 1996 and 1997 (and the proposals for 1998) are driven
solely by the programmatic impacts of the 1996 Farm Bill, which impacts
employment more directly at the service delivery point.
Question. Since you now have buyout authority, why do you
anticipate a further Reduction In Force of 1,589 employees?
Answer. The estimate of a further reduction in force of 1,589
employees reflects the assumption that reductions-in-force will make up
75 percent of the total 2,119 separations in the Budget, since the
number of employees eligible for buyouts has declined due to the major
use of buyouts within the Agency in 1995 and early 1997.
Question. How will that RIF be achieved?
Answer. No specific plans have been approved concerning the RIF.
However, we will be formulating options and involving our employee
unions soon in order to have approved procedures in place since the
funding in the 1998 Budget assumes salary savings begin early in the
fiscal year.
Question. How will you determine who has the benefit of the buyout
and who will be subject to the RIF?
Answer. The Farm Service Agency will use buyouts to reduce the
number of employees who must be involuntarily separated. However, the
number of those eligible has declined substantially due to two earlier
buyouts. The Agency will soon be formulating its buyout plan for fiscal
year 1998 in concert with RIF procedures. It is anticipated that most
employees will be offered the opportunity to apply for a buyout.
However, employees in certain job categories may not be selected for
buyouts due to the critical nature of their position. Those critical
positions will also not be targeted for RIF's.
county office workload
Question. Will there not be regional differences in FSA county
office workload, especially when comparing areas where there is
substantial landlord-tenant activity and other areas where there is
historically a single owner-operator where there are likely to be fewer
program changes over the course of the 1996 Farm Bill?
Answer. Production flexibility contract payment shares on a leased
farm may only be designated for years covered by the lease. This is
true whether or not the same tenant ultimately remains on the farm.
Most leases are annual leases.
Although producers with leases that do not cover the life of the
contract can only designate payment shares for the years covered by the
lease, they are only required to update other forms or records if there
are changes in their farming operations. It is possible that regional
differences in the amount of tenant turnover and other changes in
farming operations from year to year may ultimately be identifiable.
However, since 1996 was the first year of the program, there is
insufficient information available at this time to determine regional
differences regarding landlord-tenant activity.
Question. Would you please provide information to explain, on a
regional basis, what the current and projected workload will be among
county FSA offices?
Answer. Tobacco and peanut States would have a constant workload
because the 1996 Act did not reduce the workload associated with
tobacco or peanuts. In addition, States that have significant numbers
of producers who plant fruits or vegetables and are participating in
the AMTA Program would have greater activity concerning acre-for-acre
fruit and vegetable payment reductions. Other workload, such as
workload associated with conservation programs, would only vary by
regions if eligibility or qualification for the program is specific to
a region or otherwise pertains only to certain regions.
Question. Do your projections for staff reductions exceed the
levels recommended by GAO in order to meet the mandates of the 1996
Farm Bill and if so, why?
Answer. No, our projected staff-year reductions approximated GAO's.
The basis of the GAO report is that the new farm programs enacted in
the 1996 Act will reduce FSA workload. We agree that, generally, this
is true. For example, the pre-Farm Bill fiscal year 1997 President's
Budget estimates prepared in January 1996 included county workload
staffing needs of 13,224 FTE's for fiscal year 1996. Following passage
of the 1996 Act in April 1996, FSA performed an internal workload
analysis that showed lower staffing needs for 1996, down to an
estimated 12,835 county office FTE's. The actual FTE's worked for 1996
were 12,738. FSA's analysis also showed declining workload for fiscal
year 1997 and for fiscal year 1998, but stabilizing thereafter. Beyond
fiscal year 1998, the Administration believes further workload
reductions can be achieved, and, as mentioned, we will be initiating an
independent study this year of how such efficiencies might be
accomplished.
Question. You suggest the creation of an outside contract to study
further streamlining of FSA and NRCS. Where will the funding come from
to pay for that study?
Answer. The funding for the study is being negotiated by the
Department and the agencies involved in the study.
deferral of crp enrollments
Question. The administration has proposed deferring for one year
the enrollment of 2 million acres of the CRP in order to achieve
savings necessary to resolve an issue regarding the Crown Butte mine in
Montana. What effect would this have on the CRP program?
Answer. The proposal, if approved, would defer, for 1 year, the
opportunity to enroll 2 million acres in the CRP. This action only
serves to postpone the sign-up of a small portion of the projected
acreage, not to reduce the size of the program. The Administration's
goal of enrolling 36 million acres by the year 2000 will not change.
Question. Is it likely that this action would result in the
termination of any CRP acreage enrollment that would otherwise have
been re-enrolled in 1997?
Answer. Assuming 17 million acres are enrolled, at least 1 million
acres under contract now would be impacted. The actual impact for
acreage under existing contracts could be greater based on the
competitive nature of the program.
Question. Because of the flooding experienced now in many parts of
the country, would it be possible to defer the 2 million CRP acres and,
instead, provide farmers greater participation in fiscal year 1997
through the Flood Risk Reduction Program and still achieve your budget
objective?
Answer. Expansion of the Flood Risk Reduction Program (FRRP) in
fiscal year 1997 is not considered a viable option because it is
anticipated that the program will not be offered until October 1, 1997.
The funding source is from the CCC AMTA funding, and there is not a
separate appropriation for the FRRP. Participants earn 95 percent of
their AMTA payments in one up-front payment. In sum, this concept would
not increase producer participation and achieve the Administration's
budget objective.
______
Question Submitted by Senator Kohl
Question. The 1996 FAIR Act included provisions that have made it
impossible for farmers to receive any new Federal farm loans, if they
had ever had previous loans restructured. In many cases this seems
inappropriate, especially when it was the Federal Government itself
that was encouraging farmers to restructure their loans during the
1980's. I have been particularly alarmed to learn that some of my
constituents in Wisconsin have even been denied disaster loans as a
result of the new farm bill provisions. Given these concerns, will you
be requesting any changes in these 1996 FAIR Act provisions when the
Administration sends its proposed farm bill technical corrections to
Congress? When can we expect to see those proposed technical
corrections?
Answer. Borrowers who have had FSA loans restructured, but have had
no debt forgiveness are not precluded from receiving additional loans.
Provisions of the 1996 Act prohibit making direct or guaranteed loans
to anyone who has previously received debt forgiveness, except for
recipients of debt write down, who are only eligible for annual
production loans. The Department supports changes to moderate this
unreasonably harsh limitation. The Department will propose legislation
to allow recipients of debt forgiveness who have reestablished an
acceptable credit record over a period of time to recover eligibility
for FSA loans.
______
Foreign Agricultural Service
Questions Submitted by Senator Cochran
market access program
Question. Changes have been made in the Market Access Program (MAP)
to make it more targeted and to increase small business participation
in the program. Secretary Glickman indicated in his testimony before
this Committee that ``additional program improvements have recently
been made which are designed to broaden participation, clarify program
participation criteria, strengthen evaluation and accountability, and
simplify program requirements for participants.'' Can you briefly
summarize the changes made and the reasons for those changes.
Answer. Consistent with the Administration's commitment to
streamline government programs, new MAP regulations were published on
February 1, 1995, that increased flexibility and simplified program
requirements for the participants. The MAP regulations reflect public
comments and changes made by the Omnibus Budget Reconciliation Act of
1993, and most recently, the Federal Agriculture Improvement and Reform
Act of 1996. Specific changes in the MAP include:
--published the evaluation criteria and the corresponding percentage
weight factors for allocating funds;
--eliminated the requirement for an applicant to show that the
represented U.S. agricultural commodity faces an unfair trade
practice in an overseas market;
--give priority assistance in the allocation of brand promotion
funding to small businesses and cooperatives;
--established procedures for appealing compliance findings;
--simplified contracting standards and procedures;
--extended the time period during which expense claims may be
submitted for reimbursement; and
--liberalized U.S. origin identification requirements to permit the
use of generally recognized states or regions within the U.S.
In addition, the Department has implemented the following
improvements administratively to streamline and expedite program
management:
--simplified reporting requirements for end-of-year contributions;
--delegated to FAS Commodity Division Directors the authority to
approve routine administrative issues;
--eliminated the requirement for formal amendments to effect changes
in approved activity plans other than those that are deemed
``significant'';
--delegated authority to the State Regional Trade Groups to approve
brand company plans valued at no more than $50,000, thus
expediting the approvals for primarily small companies
participating in the MAP;
--eliminated the need for all brand companies, 80 percent of which
are classified as ``small,'' to track and report expenditures
by multiple cost categories for brand activities;
In response to GAO and the Government Performance and Results Act
(GPRA), the MAP regulations were also tightened with regard to funding
additionality and evaluation. Participants must certify and demonstrate
that any MAP funds received will supplement, but not supplant, any
private or third party contributions to the program. With regard to
evaluation, FAS allocates funds in a manner that effectively supports
the decision-making initiatives of the GPRA. In addition, each
participant is required to conduct an annual program evaluation to
determine the effectiveness of the participant's strategy in meeting
overall goals. Participants must identify goals to be met within a
specified time, a schedule of measurable milestones for gauging
success, and plans for achievement of results at regular intervals. The
evaluation results are analyzed by FAS and help guide the development
and scope of a participant's program and direct changes in program
strategy or design.
ccc funds shift/cooperator program
Question. The fiscal year 1998 budget request proposes that the
Foreign Agricultural Service (FAS) directly fund two activities
currently supported by the Commodity Credit Corporation. These include
the Emerging Markets Program and CCC Computer Facility operating costs.
To fund these activities, the budget requests an increase in FAS'
appropriation of $14 million and a reduction of $5.7 million in funding
for the Cooperator Program.
The budget proposes to shift the cost of the Emerging Markets
Program and Computer Facility operations from the CCC to FAS so that
these two activities would no longer be subject to the annual
limitation on CCC reimbursable agreements. How would this limitation be
more restrictive than the limitation on discretionary appropriations
which might force the FAS to absorb the cost of these activities within
its current funding level?
Answer. The 1996 Farm Bill limits reimbursements from CCC to the
fiscal 1995 level of $45.6 million. While both the Emerging Markets
Program and support for the CCC Computer Facility were funded in 1995
out of the $45.6 million base, a number of priority activities,
including the costs of technical assistance associated with new CCC-
funded conservation programs, were not. As such, competition for
limited CCC funds is keen. Shifting funding for Emerging Markets
Program and support for the CCC computer facility to discretionary
funding provides a larger base from which to fund these activities and/
or to identify tradeoffs. This is evidenced by the fact that the 1998
President's budget requests an increase in FAS discretionary funds to
help offset a major portion of these costs.
Question. To partially offset $5.7 million of the cost of shifting
support for these activities from the CCC to FAS, the fiscal year 1998
request proposes increased rent collections from those using FAS
Agricultural Trade Offices and an increased cost-share factor for
participants in the Foreign Market Development Cooperator Program.
Please explain what rent increases will be imposed on those using
FAS Agricultural Trade Offices and how the Cooperator Program cost-
share factor will be changed to reduce costs by $5.7 million.
Answer. In fiscal year 1998, FAS will modify the current policy on
rents to begin charging Cooperator's rent for the space they occupy in
Agricultural Trade Offices. This change will create a uniform policy
for treatment of rent expenses among all cooperators, including those
which are located in commercial space, and is necessary for purposes of
implementing the new competitive allocation criteria for the FMD
program.
With respect to the cost-share factor, the President's budget
proposes a funding level of $22 million for FAS's contribution to the
FMD program in 1998. In order to maintain current Cooperator overseas
offices, program activities and services, it will be necessary for
Cooperators to assume responsibility for those costs which will no
longer be funded through FAS appropriations.
Question. Fiscal year 1997 funding of $27.5 million was made
available for the Cooperator Program. What is the proposed fiscal year
1998 requested funding level for the Cooperator Program?
Answer. The President's fiscal year 1998 budget includes $22.0
million for FAS's contribution to the Cooperator Program.
Question. What will be the impact of the proposed fiscal year 1998
funding reduction on participants in the Cooperator Program?
Answer. The 1998 President's budget proposals reflect a policy of
shifting a greater share of the costs of the FMD program on the
participants who benefit, i.e., the cooperators. The budget assumes
increased contributions from cooperators of $5.5 million in order to
maintain overseas FMD activities at current levels.
Question. What is the projected Foreign Market Development
Cooperator Program carryover balance from fiscal year 1997 to fiscal
year 1998? What is it from fiscal year 1998 to fiscal year 1999?
Answer. Currently, we are forecasting net carryover balances at the
end of fiscal year 1997 to total $10.4 million. Assuming an
appropriation of $22.0 million for fiscal year 1998 and no change in
marketing plan levels, currently at $34.0 million, the net carryover
balance would decline to an estimated $1.3 million by the end of fiscal
year 1998.
Question. Please provide for the record a breakdown of how the
funds for the Foreign Market Development Cooperator Program were
allocated in fiscal years 1996 and 1997.
Answer. I will provide that information for the record.
[The information follows:]
FAS CONTRIBUTIONS TO THE FOREIGN MARKET DEVELOPMENT COOPERATOR PROGRAM
[Dollars in thousands]
------------------------------------------------------------------------
Fiscal year--
Name of cooperator -------------------------
1996 1997
------------------------------------------------------------------------
Cotton Council International.................. $1,000 $850
American Seed Trade Association............... 139 165
American Soybean Association.................. 5,461 4,500
National Peanut Council....................... 352 450
National Sunflower Association................ 100 160
National Cottonseed Products Association...... 116 116
Papaya Administrative Committee............... 45 ...........
Western Growers Association................... 13 10
Millers National Federation................... 13 5
USA Rice Federation........................... 718 1,250
U.S. Feed Grains Council...................... 3,972 9,100
National Dry Bean Council..................... 61 65
USA Dry Pea & Lentil.......................... 50 185
Protein Grain Products International.......... 10 5
National Hay Association...................... 42 35
U.S. Wheat Associates, Inc.................... 5,883 4,250
National Renderers Association, Inc........... 985 750
Leather Industries of America................. 125 160
Mohair Council of America..................... 4 20
U.S. Meat Export Federation................... 1,000 1,100
U.S. Beef Breeds Council...................... 70 70
USA Poultry & Egg Export Council, Inc......... 1,100 1,000
American Sheep Industry Association, Inc...... 110 100
U.S. Hides, Skin & Leather Association........ 30 35
National Dairy Promotion & Research Board..... 250 250
U.S. Livestock Genetics Exports............... 400 368
American Forest and Paper Association......... 1,800 2,000
Southern U.S. Trade Association............... 75 75
Mid-America International Agr.-Trade Council.. 80 75
Eastern U.S. Ag. and Food Export Council...... 50 60
Western U.S. Agricultural Trade Association... 75 105
National Association of State Dept. of
Agriculture.................................. 150 186
-------------------------
Total................................... 24,279 27,500
------------------------------------------------------------------------
public law 480--fiscal year 1998 request
Question. The fiscal year 1998 request proposes to maintain funding
for Titles II and III of the Public Law 480 program but to reduce
funding available for Title I credit sales. Direct credit authority is
reduced from the fiscal year 1997 level of $227 million to $113 million
(reduction of $114 million); the subsidy appropriation is reduced from
$186 million to $88 million (reduction of $98 million); and ocean
freight differential costs are reduced from $14 million to $10 million
(reduction of $4 million). The budget also proposes to transfer budget
and expenditures for the Title I concessional sales program from the
international affairs function to the agricultural function. The
rationale given for this shift is to allow the Title I program to be
managed and budgeted as part of a consistent package of agricultural
export programs. Why does the fiscal year 1998 request propose to
reduce funding for the Public Law 480 Title I program?
Answer. The reduction in the Public Law 480 Title I program level
reflects the Administration's commitment to achieving a balanced budget
and the need to reduce discretionary spending.
Question. Is the proposed reduction in funding for Title I of
Public Law 480 in fiscal year 1998 in any way related to the transfer
of the program from the international affairs function to the
agricultural function of the budget?
Answer. No. The proposed reduction in funding for Title I of Public
Law 480 in fiscal year 1998 is not related to the transfer of the
program to the agricultural function of the budget. In fact, the
transfer should help us support funding for the program in future
years.
Question. Are you requesting that this Committee take any action
with respect to the function reclassification of the Public Law 480
Title I program or are you simply notifying the Committee in the budget
materials of this change?
Answer. We are not requesting that the Committee take any action.
The President's budget has already transferred the Title I credit
account to the agriculture function.
proposed fiscal year 1997 public law 480 title i rescission
Question. The Administration proposes a $50 million total reduction
in fiscal year 1997 appropriations for Public Law 480 Title I (a $3.5
million rescission of title I ocean freight differential funds and a
rescission of $46.5 million in subsidy budget authority in the direct
credit program). The budget indicates that commodity shipments would be
reduced by approximately 200,000 metric tons as a result of this
proposed rescission. However, it also indicates that allocations of
Title I commodity assistance that have already been announced for
fiscal year 1997 would not be affected by the proposed rescission
because the reduction in program funding will be taken from a reserve
of unallocated funds and from unobligated funds carried over from
fiscal year 1996. Isn't it common that there would be a reserve of
unallocated funds at this point for fiscal year 1997, i.e., that it has
been the practice not to allocate all the funds but to reserve an
amount for emergencies that may arise later in the fiscal year?
Answer. Yes. Our practice in the past has been to maintain a
reserve in Title I in order to meet unanticipated food aid needs.
However, upon enactment of the rescission, just over $7 million will
remain in the ocean freight differential account for fiscal year 1997
and these funds are likely to be used due to increasing costs of
meeting cargo preference requirements.
Question. Please indicate for the record the number, amount, and
timing of Title I funding allocations which have been made in each of
the last five fiscal years.
Answer. I will be glad to provide that information for the record.
[The information follows:]
PUBLIC LAW 480 TITLE I COMMITMENTS BY COUNTRY AND SIGNED AGREEMENT
DATES--FISCAL YEAR 1992
------------------------------------------------------------------------
Total
Country Signed date commitment
value
------------------------------------------------------------------------
Jamaica................................. 10/15/91 $30,000,000
Morocco................................. 11/04/91 45,000,000
Tunisia................................. 11/05/91 15,000,000
El Salvador............................. 12/09/91 30,000,000
Guyana.................................. 12/19/91 7,500,000
Egypt................................... 1/09/92 40,410,000
Philippines............................. 2/03/92 20,000,000
Congo................................... 2/12/92 5,000,000
Sierra Leone............................ 3/04/92 13,400,000
Jordan.................................. 3/05/92 20,000,000
Cote d'Ivoire........................... 3/13/92 10,000,000
Sri Lanka............................... 3/17/92 13,000,000
Guatemala............................... 3/19/92 15,000,000
Suriname................................ 4/10/92 8,000,000
Zimbabwe................................ 6/02/92 40,000,000
Lithuania............................... 6/05/92 10,000,000
Latvia.................................. 6/09/92 10,000,000
Estonia................................. 6/10/92 10,000,000
Romania................................. 7/17/92 10,000,000
Moldova................................. 8/17/92 10,000,000
Tajikistan.............................. 8/21/92 10,000,000
Belarus................................. 9/09/92 24,000,000
---------------
Total............................. .............. 396,310,000
===============
Title I Funded Food for Progress:
Albania............................. 10/02/91 27,500,000
Panama.............................. 12/02/91 4,000,000
Nicaragua........................... 2/18/92 25,000,000
Armenia............................. 8/25/92 23,000,000
Georgia............................. 9/01/92 14,000,000
Kyrgyzstan.......................... 9/11/92 10,000,000
---------------
Total............................. .............. 103,500,000
===============
Grand total, 28 countries......... .............. 499,810,000
------------------------------------------------------------------------
PUBLIC LAW 480 TITLE I COMMITMENTS BY COUNTRY AND SIGNED AGREEMENT
DATES--FISCAL YEAR 1993
------------------------------------------------------------------------
Total
Country Signed date commitment
value
------------------------------------------------------------------------
Costa Rica.............................. 11/06/92 $15,000,000
Jamaica................................. 11/10/92 30,000,000
Zimbabwe................................ 12/11/92 5,000,000
Morocco................................. 1/25/93 20,000,000
Lithuania............................... 2/12/93 25,000,000
Cote d'Ivoire........................... 3/03/93 10,000,000
Belarus................................. 3/04/93 5,000,000
Sri Lanka............................... 3/12/93 10,000,000
Jordan.................................. 3/19/93 30,000,000
El Salvador............................. 3/23/93 33,400,000
Suriname................................ 4/05/93 3,500,000
Turkmenistan............................ 4/06/93 10,000,000
Moldova................................. 4/19/93 10,000,000
Romania................................. 4/21/93 10,000,000
Bulgaria................................ 4/23/93 15,000,000
Tunisia................................. 4/28/93 5,000,000
Philippines............................. 4/30/93 20,000,000
Pakistan................................ 6/03/93 40,000,000
Yemen................................... 6/15/93 10,000,000
Ukraine................................. 7/21/93 20,000,000
Guatemala............................... 8/03/93 15,000,000
Tajikistan.............................. 8/05/93 14,000,000
---------------
Total............................. .............. 355,900,000
===============
Title I funded Food for Progress:
Armenia............................. 2/11/93 20,600,000
Georgia............................. 3/12/93 50,400,000
Kyrgyzstan.......................... 3/17/93 18,000,000
Albania............................. 5/20/93 23,000,000
---------------
Total............................. .............. 112,000,000
===============
Grand total, 26 countries......... .............. 467,900,000
------------------------------------------------------------------------
PUBLIC LAW 480 TITLE I COMMITMENTS BY COUNTRY AND SIGNED AGREEMENT
DATES--FISCAL YEAR 1994
------------------------------------------------------------------------
Total
Country Signed date commitment
value
------------------------------------------------------------------------
Morocco................................. 12/29/93 $15,000,000
Belarus................................. 1/04/94 27,500,000
Suriname................................ 1/04/94 5,500,000
Jamaica................................. 1/07/94 20,000,000
Sri Lanka............................... 2/07/94 18,000,000
Turkmenistan............................ 2/07/94 10,000,000
Jordan.................................. 2/25/94 15,000,000
Ukraine................................. 3/04/94 20,000,000
Lithuania............................... 3/14/94 15,000,000
Moldova................................. 4/05/94 20,000,000
Guatemala............................... 5/09/94 15,000,000
Croatia................................. 5/09/94 10,000,000
Congo................................... 5/18/94 6,000,000
Philippines............................. 6/01/94 15,000,000
Cote d'Ivoire........................... 6/20/94 15,000,000
Angola.................................. 7/11/94 8,000,000
Macedonia............................... 8/09/94 7,000,000
---------------
Total............................. .............. 242,000,000
===============
Title I Funded Food for Progress:
Albania............................. 6/03/94 15,000,000
Armenia............................. 2/15/94 25,000,000
Georgia............................. 3/07/94 24,000,000
Kyrgyzstan.......................... 2/15/94 16,000,000
Tajikistan.......................... 8/31/94 10,000,000
---------------
Total............................. .............. 90,000,000
===============
Grand total, 22 countries......... .............. 332,000,000
------------------------------------------------------------------------
PUBLIC LAW 480 TITLE I COMMITMENTS BY COUNTRY AND SIGNED AGREEMENT
DATES--FISCAL YEAR 1995
------------------------------------------------------------------------
Total
Country Signed date commitment
value
------------------------------------------------------------------------
Ukraine................................. 11/21/94 $25,000,000
Jamaica................................. 12/05/94 14,000,000
Sri Lanka............................... 1/13/95 19,500,000
Belarus................................. 1/27/95 2O,000,000
Suriname................................ 2/21/95 6,000,000
Jordan.................................. 3/02/95 15,000,000
Pakistan................................ 4/07/95 10,000,000
Moldova................................. 4/13/95 10,000,000
Lithuania............................... 6/13/95 10,000,000
Congo................................... 6/22/95 6,000,000
Croatia................................. 7/12/95 5,000,000
Cote d'Ivoire........................... 7/12/95 10,000,000
El Salvador............................. 8/01/95 10,000,000
Guyana.................................. 8/22/95 3,000,000
Turkmenistan............................ 8/29/95 15,000,000
Bolivia................................. 8/31/95 5,000,000
Angola.................................. 9/05/95 7,000,000
Angola.................................. 9/21/95 3,980,000
---------------
Total............................. .............. 194,480,000
===============
Title I funded Food for Progress:
Albania............................. 8/21/95 5,000,000
Armenia............................. 12/29/94 31,900,000
Georgia............................. 2/21/95 24,700,000
Kyrgyzstan.......................... 5/19/95 19,500,000
Tajikistan.......................... 5/11/95 7,000,000
---------------
Total............................. .............. 88,100,000
===============
Grand total, 22 countries......... .............. 282,580,000
------------------------------------------------------------------------
PUBLIC LAW 480 TITLE I COMMITMENTS BY COUNTRY AND SIGNED AGREEMENT
DATES--FISCAL YEAR 1996
------------------------------------------------------------------------
Total
Country Signed date commitment
value
------------------------------------------------------------------------
Guyana.................................. 12/12/95 $9,000,000
Belarus................................. 12/20/95 9,966,802
Turkmenistan............................ 12/21/95 10,000,000
Armenia................................. 12/27/95 15,000,000
El Salvador............................. 12/27/95 15,000,000
Jamaica................................. 12/27/95 15,000,000
Bolivia................................. 12/28/95 10,000,000
Sri Lanka............................... 12/28/95 10,000,000
Jordan.................................. 12/28/95 21,000,000
Lithuania............................... 12/28/95 10,000,000
Congo................................... 12/29/95 5,000,000
Cote d'Ivoire........................... 12/29/95 10,000,000
Suriname................................ 12/29/95 5,000,000
Philippines............................. 12/29/95 15,000,000
Ukraine................................. 12/29/95 20,000,000
Moldova................................. 5/31/96 8,500,000
Pakistan................................ 8/05/96 10,000,000
Moldova................................. 9/06/96 6,500,000
Congo................................... 9/18/96 3,000,000
Angola.................................. 9/20/96 5,000,000
Angola.................................. 9/23/96 5,000,000
---------------
Total............................. .............. 217,966,802
===============
Title I Funded Food for Progress:
Georgia............................. 12/20/95 28,800,000
Albania............................. 12/28/95 5,000,000
Kyrgyzstan.......................... 12/29/95 15,000,000
Tajikistan.......................... 12/29/95 11,000,000
---------------
Total............................. .............. 59,800,000
===============
Grand total, 24 countries......... .............. 277,766,802
------------------------------------------------------------------------
Question. Why weren't Public Law 480 Title I funds carried over
from fiscal year 1996 included in the initial funding allocation for
fiscal year 1997?
Answer. The funds carried over from fiscal year 1996 were not
included in our initial funding allocations for fiscal year 1997
because, while the funds apportioned by OMB included an estimate of
carryover funds, the actual carryover balances were not known until
late November or December. We did not want to announce Title I
programming funded from carryover balances until we knew the actual
balances carried over from fiscal year 1996.
Question. Please provide for the record the amount of Title I funds
carried over in each of the past five fiscal years and indicate when
those carryover balances were allocated.
Answer. Funds carried into subsequent years from fiscal years 1992
through 1994 were $4.4 million, $4.7 million, and $16.9 million,
respectively. In fiscal year 1995, $28.0 million was used to reimburse
CCC for wheat released from the Food Security Wheat Reserve and $24.7
million was carried forward into fiscal year 1996. The amount of
appropriation carried from fiscal year 1996 into fiscal year 1997
totaled $32.9 million. The $32.9 million will be used in fiscal year
1997 to fund a portion of the proposed $50 million Public Law 480 Title
I rescission.
expansion of overseas offices
Question. Funding of $1.5 million was made available for fiscal
year 1997 to enable the FAS to expand overseas offices. Priority was to
be given to posts serving expanding markets in Asia and Latin America.
Where have offices been established with the additional funds provided?
Answer. In fiscal year 1997, FAS has opened Agricultural Trade
Offices in Jakarta and Miami (for the Caribbean Basin), and the opening
of the Moscow ATO is scheduled for late summer 1997. In addition, an
FAS office has been established in Hanoi, and FAS will open an office
in Nuevo Laredo, Mexico in the summer of 1997. The agency is adding an
American officer position in Geneva at the WTO and adding one officer
slot at the ATO's in both Seoul and Tokyo, all of which will take place
this summer.
In conjunction with this increased American officer presence, FAS
will have increased foreign national contract employee staffing at the
following 15 offices in the course of fiscal year 1997.
Brussels, Belgium-U.S. Mission to the E.U.
Caribbean Basin ATO (Miami)
Guangzhou, China ATO
Hanoi, Vietnam
Jakarta, Indonesia ATO
Kuala Lumpur, Malaysia
Lagos, Nigeria
Manila, Philippines
Nuevo Laredo, Mexico
Sao Paulo, Brazil
Seoul, Korea
Shanghai, China ATO
St. Petersburg, Russia
Taipei, Taiwan
Tokyo, Japan ATO
FAS is presently conducting its annual review of overseas
resources. FAS will continue to adjust staffing to take advantage of
medium- and long-term opportunities for U.S. agriculture.
Question. Please provide for the record a list of FAS' counselor/
attache, and trade offices overseas and the amount of funding and full-
time equivalent staffing levels provided for each in each of fiscal
years 1990 through 1996, and estimated for fiscal years 1997 and 1998.
Answer. I will provide a list of FAS' counselor/attache, and trade
offices for the record.
[The information follows:]
------------------------------------------------------------------------
Counselor/attache U.S.
head ATO's
------------------------------------------------------------------------
Argentina, Buenos Aires
Australia, Canberra
Austria, Vienna
Belgium, Brussels (USEU)
Brazil, Brasilia
Brazil, Sao Paulo
Bulgaria, Sofia
Canada, Ottawa
Caribbean Basin (Miami)
Chile, Santiago
China, Beijing
China, Guangzhou
China, Shanghai
Colombia, Bogota
Costa Rica, San Jose
Cote d'Ivoire, Abidjan
Denmark, Copenhagen
Dominican Republic, Santo
Domingo
Egypt, Cairo
France, Paris
Germany, Bonn
Germany, Hamburg
Greece, Athens
Guatemala, Guatemala City
Hong Kong
India, New Delhi
Indonesia, Jakarta
Indonesia, Jakarta
Italy, Milan
Italy, Rome
Italy, Rome (FODAG)
Japan, Osaka
Japan, Tokyo
Japan, Tokyo
Kenya, Nairobi
Korea, Seoul
Korea, Seoul
Malaysia, Kuala Lumpur
Mexico, Mexico City
Mexico, Mexico City
Morocco, Rabat
Netherlands, The Hague
New Zealand, Wellington
Nigeria, Lagos
Pakistan, Islamabad
Peru, Lima
Philippines, Manila
Poland, Warsaw
Russia, Moscow
Saudi Arabia, Riyadh
Singapore
South Africa, Pretoria
Spain, Madrid
Sweden, Stockholm
Switzerland, Geneva (WTO)
Taiwan, Taipei
Taiwan, Taipei
Thailand, Bangkok
Tunisia,Tunis
Turkey, Ankara
U.A.E. Dubai
United Kingdom, London
Venezuela, Caracas
Vietnam, Hanoi
------------------------------------------------------------------------
FOREIGN AGRICULTURAL SERVICE OVERSEAS PERSONNEL--FISCAL YEARS 1990-98
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal year--
-----------------------------------------------------------------------------------------------------------------------------------------------
Region: Country location 1990 1991 1992 1993 1994 1995 1996 1997 1998 estimated
-----------------------------------------------------------------------------------------------------------------------------------------------
US FSN US FSN US FSN US FSN US FSN US FSN US FSN US FSN US FSN
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Austria, Vienna................................. 2 1 2 1 2 1 3 1 3 1 3 1 3 1 3 1 3 1
Czech Republic, Prague...................... ...... ...... ...... ...... ...... ...... ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1
Hungary..................................... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 1 ...... 1 ...... 1
Belgium, Brussels............................... 2 2 ...... 2 ...... 2 ...... 2 ...... 1 ...... 2 ...... 1 ...... 1 ...... 1
USEU Brussels, Brussels..................... 5 1 5 1 5 1 5 1 5 1 5 1 5 2 5 2 5 2
Bulgaria, Sofia................................. ...... ...... ...... ...... ...... ...... 2 1 2 2 2 2 2 2 1 2 ...... 2
Serbia, Belgrade............................ 2 3 2 3 2 3 ...... 2 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1
Denmark, Copenhagen............................. 1 3 1 3 1 3 1 3 1 3 1 3 1 2 ...... 2 ...... 2
France, Paris................................... 4 4 4 4 4 4 4 4 4 4 4 4 4 4 3 4 3 4
Germany, Berlin................................. 1 1 1 1 1 ...... 1 ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ......
Germany, Bonn................................... 3 5 3 5 3 5 2 5 3 4 3 4 3 4 3 4 3 4
Greece, Athens.................................. 1 2 1 2 1 2 1 2 1 2 1 2 1 2 ...... 2 ...... 2
Ireland, Dublin................................. ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1
Italy, Milan.................................... 1 1 1 1 1 1 1 1 1 1 1 1 1 1 ...... ...... ...... ......
Italy, Rome..................................... 3 4 3 4 3 4 3 4 2 4 2 4 2 4 2 4 2 4
FODAG Rome.................................. 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ......
Netherlands, The Hague.......................... 2 3 2 2 2 4 2 4 2 3 2 3 2 3 2 3 2 3
Norway, Oslo.................................... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ......
Poland, Warsaw.................................. 3 1 3 1 3 1 2 2 2 2 2 2 2 2 2 2 2 2
Portugal, Lisbon................................ 1 2 1 1 1 2 1 2 ...... 2 ...... 2 ...... 2 ...... 2 ...... 2
Romania, Bucharest.............................. ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1
Spain, Madrid................................... 2 4 2 4 2 4 2 4 2 4 2 4 2 4 2 4 2 4
Sweden, Stockholm............................... 1 3 1 3 1 3 1 3 1 2 1 3 1 3 1 3 1 3
Latvia, Riga................................ ...... ...... ...... ...... ...... ...... ...... ...... ...... 1 ...... 1 ...... 1 ...... 1 ...... 1
Switzerland, Bern............................... 1 2 1 2 1 2 1 1 ...... 1 ...... 1 ...... ...... ...... ...... ...... ......
Switzerland, Geneva............................. 3 ...... 3 ...... 3 ...... 3 ...... 3 ...... 3 ...... 3 ...... 4 ...... 4 ......
Turkey, Ankara.................................. 1 2 1 2 1 2 1 2 2 2 2 2 2 2 2 2 2 2
Turkey, Istanbul................................ 1 ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ......
United Kingdom, London.......................... 3 3 3 3 3 3 3 2 3 4 3 4 3 3 2 3 2 3
Russia, Moscow.................................. 4 ...... 4 ...... 4 ...... 5 ...... 5 ...... 5 3 5 3 6 3 6 3
Kazakhstan, Almaty.......................... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 1 ...... 1 ...... 1 ...... 1
Ukraine, Kiev............................... ...... ...... ...... ...... ...... ...... ...... ...... ...... 1 ...... 1 1 1 1 1 2 1
-----------------------------------------------------------------------------------------------------------------------------------------------
Subtotal.................................. 48 49 45 47 45 49 45 49 43 49 43 55 44 53 40 52 40 52
===============================================================================================================================================
Algeria, Algiers................................ ...... ...... ...... ...... ...... ...... ...... ...... ...... 1 ...... 1 ...... ...... ...... ...... ...... ......
Bangladesh, Dhaka............................... ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1
Cote d'lvore, Abidjan........................... 2 2 2 2 2 2 2 2 1 2 1 2 1 2 1 2 1 2
Egypt, Cairo.................................... 3 2 3 2 3 2 2 2 2 2 2 2 2 1 2 1 2 1
India, New Delhi................................ 3 4 3 4 2 5 2 4 2 5 2 5 2 5 2 5 2 5
Israel, Tel Aviv................................ ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1
Kenya, Nairobi.................................. 2 1 2 1 2 1 2 ...... ...... 1 2 1 1 ...... 1 ...... 1 ......
Morocco, Rabat.................................. 1 2 1 2 1 2 1 1 1 1 1 2 1 1 1 1 1 1
Nigeria, Lagos.................................. 1 1 1 1 2 2 2 1 1 2 1 2 1 1 1 1 1 1
Pakistan, Islamabad............................. 1 2 1 2 1 2 1 2 1 2 1 2 1 2 1 2 1 2
South Africa, Pretoria.......................... 1 2 1 2 1 2 1 2 1 2 2 4 2 4 2 4 2 4
Syria, Damascus................................. ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1
Tunisia, Tunis.................................. ...... ...... ...... ...... ...... ...... ...... ...... 1 2 1 2 1 2 1 2 ...... 2
-----------------------------------------------------------------------------------------------------------------------------------------------
Subtotal.................................. 14 19 14 19 14 21 13 17 10 23 13 26 12 21 12 21 11 21
===============================================================================================================================================
Australia, Canberra............................. 1 2 1 2 1 2 1 2 1 3 1 2 1 2 1 2 1 2
China, Beijing.................................. 3 ...... 3 ...... 3 ...... 3 ...... 5 ...... 4 ...... 4 ...... 4 ...... 4 ......
China, Shanghai................................. ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 1 ...... 1 ...... 1 ...... 1 ......
Indonesia, Jakarta.............................. 3 2 3 2 3 2 3 2 3 2 3 2 2 2 2 2 2 2
Japan, Tokyo.................................... 5 8 5 8 5 8 5 7 5 7 5 7 5 7 5 7 5 7
Korea, Seoul.................................... 2 3 2 3 2 3 1 3 2 3 3 5 3 5 3 5 3 5
Malaysia, Kuala Lumpur.......................... 1 2 1 2 1 2 1 2 1 2 1 2 1 2 1 2 1 2
New Zealand, Wellington......................... 1 2 1 2 1 2 1 2 1 2 1 2 1 1 1 1 1 1
Philippines, Manila............................. 2 3 2 3 2 3 2 3 2 3 2 3 2 3 2 3 2 3
Thailand, Bangkok............................... 2 3 2 3 2 3 2 3 2 3 2 3 2 3 2 3 2 3
Burma, Rangoon.............................. ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 1 ...... 1 ...... 1
Vietnam......................................... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 1 ...... 1 ...... 1 ......
-----------------------------------------------------------------------------------------------------------------------------------------------
Subtotal.................................. 20 25 20 25 20 25 19 24 22 25 23 26 23 26 23 26 23 26
===============================================================================================================================================
Argentina, Buenos Aires......................... 2 3 2 3 2 3 2 3 2 3 2 3 2 3 2 3 2 3
Brazil, Brasilia................................ 4 6 3 6 3 6 3 6 2 2 2 2 2 2 2 2 2 2
Brazil, Rio de Janeiro.......................... ...... ...... ...... ...... ...... ...... ...... ...... ...... 2 ...... 2 ...... ...... ...... ...... ...... ......
Brazil, Sao Paulo............................... ...... ...... ...... ...... ...... ...... ...... ...... 1 2 1 2 1 3 1 3 2 3
Canada, Ottawa.................................. 2 3 2 3 2 3 2 3 2 3 2 3 2 3 2 3 2 3
Chile, Santiago................................. 1 2 1 2 1 2 1 2 1 2 1 2 1 2 1 2 1 2
Colombia, Bogota................................ 1 3 1 3 1 3 1 3 1 3 1 3 1 3 1 3 1 3
Costa Rica, San Jose............................ 1 2 1 1 1 2 1 2 1 2 1 2 1 2 1 2 1 2
Dominican Republic, S.A......................... 2 1 2 1 2 1 2 1 2 1 2 1 2 1 1 1 1 1
Ecuador, Quito.................................. 1 2 ...... 2 ...... 2 ...... 2 1 2 1 2 ...... 2 ...... 2 ...... 2
Guatemala, Guatemala City....................... 2 2 2 2 2 1 2 1 2 1 2 2 2 2 2 2 1 2
Panama, Panama City............................. ...... ...... ...... ...... 1 1 1 1 ...... ...... ...... ...... ...... ...... ...... ...... ...... ......
Peru, Lima...................................... 1 3 1 3 1 3 1 3 ...... 2 ...... 2 1 2 1 2 1 2
Mexico, Mexico City............................. 3 5 3 4 2 4 3 6 3 6 3 6 3 6 3 6 3 6
Venezuela, Caracas.............................. 1 1 1 1 1 1 1 1 1 1 2 3 2 3 2 3 2 3
-----------------------------------------------------------------------------------------------------------------------------------------------
Subtotal.................................. 21 33 19 31 19 32 15 25 19 32 20 35 20 34 19 34 19 34
===============================================================================================================================================
Caribbean Basin................................. ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 1 ...... 1 ......
Algiers, Algeria................................ 2 1 2 1 2 1 2 1 ...... ...... ...... ...... ...... ...... ...... ...... ...... ......
Bahrain, Manama................................. 1 2 1 2 1 2 1 2 ...... ...... ...... ...... ...... ...... ...... ...... ...... ......
Germany, Hamburg................................ 1 2 1 2 1 2 1 2 1 2 1 2 1 2 1 2 1 2
Italy, Mllan.................................... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 1 1 1 1
United Kingdom.................................. 1 2 1 2 1 2 1 1 ...... ...... ...... ...... ...... ...... ...... ...... ...... ......
Russia, Moscow.................................. ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 1 ......
Irag, Baghdad................................... 1 ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ......
Nigeria, Lagos.................................. 1 1 1 1 ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ......
Tunisia, Tunis.................................. 1 2 1 2 1 2 1 2 ...... ...... ...... ...... ...... ...... ...... ...... ...... ......
U.A.E., Dubai................................... ...... 1 ...... 1 ...... 1 ...... 1 1 3 1 3 1 3 1 3 1 3
Saudi Arabia, Jeddah............................ ...... 2 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1
Saudi Arabia, Riyadh............................ 1 ...... 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Mexico, Mexico City............................. ...... ...... ...... ...... 1 ...... 1 ...... 1 ...... 1 ...... 2 ...... 2 ...... 2 ......
Venezuela, Caracas.............................. 1 2 1 2 1 2 1 2 1 2 ...... ...... ...... ...... ...... ...... ...... ......
China, Beijing.................................. 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... ...... ...... ...... ...... ...... ......
China, Shanghai................................. ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 1 ...... 1 ...... 1 ......
China, Guangzhou................................ 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ...... 1 ......
Hong Kong, Hong Kong............................ 2 2 2 2 2 2 2 2 2 1 2 2 2 2 2 2 3 2
Indonesia, Jakarta.............................. ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... 1 ...... 1 ......
Japan, Osaka.................................... ...... ...... ...... 1 1 1 1 1 1 1 1 1 1 2 1 2 1 2
Japan, Tokyo.................................... 1 3 1 3 2 3 2 3 2 3 2 3 2 3 2 3 3 3
Korea, Seoul.................................... 1 1 1 1 1 2 1 2 1 2 1 2 1 2 1 2 2 2
Singapore, Singapore............................ 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 1 2
-----------------------------------------------------------------------------------------------------------------------------------------------
Subtotal.................................. 18 23 17 24 19 24 19 23 15 18 14 17 15 18 18 19 21 19
===============================================================================================================================================
Total..................................... 121 149 115 146 117 151 111 138 109 147 113 159 114 152 112 152 114 152
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
FOREIGN AGRICULTURAL SERVICE GENERAL AUTHORIZATIONS AND AMERICAN SALARIES--FISCAL YEARS 1990-98
[In thoursands of dollars]
----------------------------------------------------------------------------------------------------------------
Fiscal year--
Post --------------------------------------------------------------------------------
1990 1991 1992 1993 1994 1995 1996 1997 1998
----------------------------------------------------------------------------------------------------------------
FOREIGN AGRICULTURAL AFFAIRS
Austria........................ 277 291 371 533 552 606 663 675 675
Czech Rep...................... ....... ....... ....... 21 31 41 36 45 45
France......................... 860 828 968 1,041 973 1,033 1,002 919 1,014
Greece......................... 202 231 251 271 286 307 364 296 296
Israel......................... 66 82 92 112 109 121 110 129 129
Italy, Emb..................... 718 846 1,015 932 778 827 840 706 706
Italy, Fodag................... 153 162 194 200 180 187 203 206 206
Portugal....................... 290 222 274 287 153 192 433 177 177
Spain.......................... 669 783 848 818 764 767 804 862 957
Switz, Bern.................... 235 233 251 195 87 106 86 59 59
Switz, Gen..................... 378 468 506 555 551 594 614 725 725
Belgium, E..................... 344 238 276 271 255 274 332 217 217
Belg. USEU..................... 765 806 919 1,019 946 968 1,001 1,169 1,169
Denmark........................ 291 330 354 401 421 429 337 273 273
United Kingdom................. 618 586 686 574 505 986 734 683 683
Germany........................ 644 646 783 738 671 728 764 794 794
Berlin......................... 149 158 197 129 ....... ....... ....... ....... .......
Ireland........................ 124 139 147 123 125 137 147 158 158
Netherlands.................... 470 535 632 627 640 703 727 704 704
Sweden......................... 202 235 324 309 272 295 318 360 360
--------------------------------------------------------------------------------
Total.................... 7,455 7,819 9,088 9,156 8,299 9,301 9,515 9,157 9,347
================================================================================
Argentina...................... 395 488 548 558 597 652 688 715 715
Brazil......................... 659 705 748 808 710 852 1,161 744 744
Canada......................... 336 362 408 358 729 409 414 451 451
Chile.......................... 152 182 206 226 236 266 319 355 355
Colombia....................... 248 234 255 262 349 357 350 416 416
Costa Rica..................... 141 169 220 278 274 310 309 346 346
Dom. Rep....................... 253 268 318 339 354 364 393 307 307
Ecuador........................ 115 61 70 98 274 291 177 136 136
Guatemala...................... 314 373 411 439 438 501 538 566 566
Mexico......................... 445 549 733 712 700 616 647 708 708
Panama......................... ....... 111 191 ....... ....... ....... ....... ....... .......
Peru........................... 304 308 469 308 149 177 246 317 317
Venezuela...................... 128 164 192 196 185 457 418 439 439
--------------------------------------------------------------------------------
Total.................... 3,490 3,974 4,769 4,582 4,995 5,252 5,660 5,500 5,500
----------------------------------------------------------------------------------------------------------------
FOREIGN AGRICULTURAL SERVICE GENERAL AUTHORIZATION HISTORY--FISCAL YEARS 1990-97
[In thoursands of dollars]
----------------------------------------------------------------------------------------------------------------
Fiscal year--
Post --------------------------------------------------------------------------------
1990 1991 1992 1993 1994 1995 1996 1997 1998
----------------------------------------------------------------------------------------------------------------
FOREIGN AGRICULTURAL AFFAIRS
Algeria........................ ....... ....... ....... ....... 231 44 16 30 30
Bulgaria....................... ....... ....... 258 326 294 312 381 267 172
Bangladesh..................... 60 38 48 34 33 33 34 60 60
Cote D'Ivoire.................. 317 381 419 471 261 237 255 311 311
Egypt.......................... 358 323 423 340 334 328 380 380 380
India.......................... 357 352 319 337 346 312 420 403 403
Kenya.......................... 171 198 265 240 47 262 188 228 228
Morocco........................ 137 162 193 188 219 224 215 223 223
Nigeria........................ 130 126 246 247 313 345 347 348 348
Pakistan....................... 174 182 274 214 182 196 217 239 239
Romania........................ 20 15 29 31 30 31 26 30 30
Syria.......................... 32 39 43 52 32 42 42 56 56
Serbia-Mont.................... ....... ....... ....... ....... ....... 22 36 40 40
S. Africa...................... 159 186 228 256 262 421 412 566 566
Tunisia........................ ....... ....... ....... ....... 190 219 205 232 232
Turkey......................... 195 236 217 278 368 454 413 496 496
--------------------------------------------------------------------------------
Total.................... 2,110 2,238 2,962 3,014 3,142 3,482 3,587 3,909 3,814
================================================================================
Australia...................... 250 239 294 267 287 295 307 325 325
PRC............................ 318 269 423 556 789 787 1,023 922 922
Indonesia...................... 301 322 385 650 543 509 476 434 434
Japan.......................... 1,001 1,138 1,372 1,428 1,546 1,582 1,584 1,611 1,611
Korea.......................... 360 310 358 374 430 531 587 602 602
Malaysia....................... 146 168 186 206 203 223 231 228 228
New Zealand.................... 130 136 151 151 180 168 172 201 201
Philippines.................... 235 247 318 386 351 412 460 511 511
Poland......................... 204 299 440 359 377 380 411 482 482
Russia......................... 320 459 692 961 907 757 770 957 957
Thailand....................... 266 314 518 511 596 568 638 637 637
Ukraine........................ ....... ....... ....... ....... ....... 155 142 154 249
Vietnam........................ ....... ....... ....... ....... ....... ....... 198 268 268
Yugoslavia..................... 123 147 119 33 20 ....... ....... ....... .......
--------------------------------------------------------------------------------
Total.................... 3,654 4,048 5,256 5,882 6,229 6,367 6,999 7,332 7,427
================================================================================
Total, FAA............... 16,709 18,079 22,075 22,634 22,665 24,402 25,761 25,898 26,088
================================================================================
AGRICULTURAL TRADE OFFICES
Algiers, Algeria............... 479 448 476 554 ....... ....... ....... ....... .......
Manama, Bahrain................ 295 323 366 362 ....... ....... ....... ....... .......
Caribbean basin................ ....... ....... ....... ....... ....... ....... ....... 132 132
Beijing, China................. 281 206 230 272 190 ....... ....... ....... .......
Shanghai, China................ ....... ....... ....... ....... ....... 301 580 553 553
Guangzhou, China............... 181 212 209 536 316 307 348 406 406
Hamburg, Germany............... 471 498 533 537 855 556 483 433 433
Hong Kong...................... 547 590 645 666 814 777 967 845 845
Jakarta, Indonesia............. ....... ....... ....... ....... ....... ....... 105 97 97
Baghdad, Iraq.................. 221 ....... ....... ....... ....... ....... ....... ....... .......
Milan, Italy................... ....... ....... ....... ....... ....... ....... ....... 255 255
Tokyo, Japan................... 1,266 1,540 1,646 1,740 1,439 2,207 1,994 1,930 1,971
Osaka, Japan................... ....... 141 1,937 1,144 1,268 1,943 417 451 451
Seoul, Korea................... 245 528 710 655 672 773 891 918 959
Mexico......................... ....... ....... 856 743 777 755 883 1,010 1,010
Lagos, Nigeria................. 103 115 ....... ....... ....... ....... ....... ....... .......
Moscow, Russia................. ....... ....... ....... ....... ....... ....... ....... ....... .......
Riyadh, Saudi Arabia........... 266 261 285 263 288 287 312 326 326
Singapore...................... 703 725 782 821 891 928 999 962 921
Tunis.......................... 178 175 212 222 ....... ....... ....... ....... .......
Instanbul, Turkey.............. 56 67 ....... ....... ....... ....... ....... ....... .......
London, U.K.................... 821 1,219 1,313 1,298 ....... ....... ....... ....... .......
Caracas, Venezuela............. 229 321 319 351 265 ....... ....... ....... .......
Dubai, U.A.E................... ....... ....... ....... ....... 427 327 320 306 306
--------------------------------------------------------------------------------
Total, ATO............... 6,342 7,369 10,519 10,164 8,202 9,161 8,299 8,624 8,665
================================================================================
Grand total.............. 23,051 25,448 32,594 32,798 30,867 33,563 34,060 34,522 34,753
----------------------------------------------------------------------------------------------------------------
FOREIGN AFFAIRS ADMINISTRATIVE SUPPORT \1\--FISCAL YEARS 1990-98
[In thoursands of dollars]
----------------------------------------------------------------------------------------------------------------
Fiscal year--
Post --------------------------------------------------------------------------------
1990 1991 1992 1993 1994 1995 1996 1997 1998
----------------------------------------------------------------------------------------------------------------
Foreign Agricultural Affairs... 5,120 3,320 4,143 4,500 4,392 4,858 4,853 5,133 5,133
Agricultural Trade Offices..... 1,850 1,660 1,413 1,770 1,525 1,434 1,320 1,362 1,362
----------------------------------------------------------------------------------------------------------------
\1\ Reimbursennent to State Department.
proposed appropriations bill language
Question. The fiscal year 1998 budget proposes new appropriations
bill language to provide up to a $3 million advance appropriation to
fund overseas wage and price increases, subject to documentation by
USDA of actual overseas inflation and deflation. How has the FAS
managed the impact of overseas inflation and exchange rate variations
in past years?
Answer. In previous budgets, requests for adjustments for
anticipated overseas wage and price increases and exchange rate
fluctuations were included as part of the President's budget. However,
it is virtually impossible to accurately forecast these costs given the
long lead time associated with the budget process. In some years,
amounts were included for increases that did not subsequently occur at
the levels estimated and conversely, budgets were presented that did
not include sufficient funding to maintain current services overseas.
Question. Why is the agency now seeking authority to use up to $3
million in 1999 to compensate for any net 1998 overseas inflation?
Answer. The proposed advance appropriation will eliminate the
significant budgetary uncertainties associated with attempting to
accurately forecast wage and price increases as well as currency
fluctuations 18 to 24 months in advance. Upon demonstration as to the
extent that the U.S. exchange rate fell relative to other currencies
overall in fiscal year 1998, OMB will make available some or all of the
fiscal year 1999 advance appropriation. In addition, having the fiscal
year 1998 appropriation available for obligation for two fiscal years
will allow for the subsequent use of an unobligated balances that
remain where the U.S. exchange rate rises relative to other currencies.
Question. What FAS activities would be impacted by reserving this
$3 million to possibly be spent in fiscal year 1999?
Answer. The proposed fiscal year 1999 advance appropriation would
cover increases in overseas operations costs due to unavoidable wage
and price increases and/or currency fluctuations in fiscal year 1998.
By having these funds appropriated in advance, no FAS activities would
be impacted should our overseas offices experience higher operating
costs due to these macro-economic factors. In fact this proposal would
eliminate the potential that FAS currently faces of having to reduce
FAS export expansion efforts in the current fiscal year to offset
unanticipated and unavoidable overseas cost increases.
Question. How would the agency notify this Committee that it had
documented actual overseas inflation and deflation?
Answer. Using publicly available exchange rates and other factors,
FAS will construct a weighted index that indicates the loss of buying
power the agency faces overseas. Needed funds out of the $3 million
advance appropriation will be used to compensate for the change. The
Committee would be informed ahead of time before any action is taken,
as well as given an opportunity to comment on the exchange rate index.
market access barrier identification
Question. The fiscal year 1998 request includes an increase of
$500,000 for a Market Barrier Identification initiative. Under this
initiative, FAS would implement a systematic process to review,
identify, and catalog technical barriers to trade and other technical
requirements that limit export opportunities for U.S. agricultural
products in the top 30 U.S. export markets.
For fiscal year 1998, FAS is seeking $500,000 for a Market Barrier
Identification initiative. The explanatory notes indicate that this
initiative will lead to recommendations for overcoming the identified
barriers to expand U.S. agricultural exports. Why is the development of
a catalog necessary to do this? How do you identify and overcome these
barriers now?
Answer. The term catalog in this situation implies a much broader
meaning--not simply short descriptions of identified trade problems in
a country. The initiative's goal is to more systematically and
comprehensively identify technical barriers all the way from very minor
barriers up through the obvious major issues. Many barriers are minor
irritants which are sporadic and in fact overcome by commerce without
major fuss. Other barriers are critical blockages which effectively
stop trade. The initiative envisions a broad-base engagement to better
facilitate private trade's and government's ability to identify and
navigate around these hurdles and eliminate the unjustified ones. The
end result will provide U.S. exporters with more systematic,
comprehensive, timely and definitive solutions for their export
interests on the one side, and will help facilitate resolution of
outstanding barriers on the other.
Question. Doesn't this annual report identify barriers to the
expansion of U.S. agricultural exports? Why does the USDA need to do a
separate catalog?
Answer. This initiative does not represent a duplicate listing of
barriers on an annual basis. It serves both daily market servicing and
outreach as well as strategic issue resolution.
Question. Who are the intended users of this proposed catalog?
Answer. U.S. agricultural product exporting firms are targeted as
the primary beneficiaries of this initiative.
Question. Please provide a detailed justification of the $500,000
requested for this initiative.
Answer. A major gain in the Uruguay Round was agreement to include
disciplines on technical barriers to trade. Elaboration of the specific
disciplines in both the Agreement on Technical Barriers to Trade and
the Agreement on the Application of Sanitary and Phytosanitary Measures
is continuing, especially with regard to harmonization, equivalency and
consistency. Clearly a starting point for a meaningful discussion of
all these is knowing how transparent or non-transparent a market is.
This initiative takes a more comprehensive, detailed approach to
transparency issues with respect to U.S. agricultural export interests
in the top 30 U.S. markets. Transparency is to know in advance what
will be expected if I want to export x product to y country. This
information is not always readily available. This initiative is in line
with the objectives of improved government services, more systematic
servicing and outreach to current and potential U.S. agricultural
exporters.
cochran fellowship program
Question. Please provide a breakdown by country and funding source
of the fiscal year 1996 and estimated fiscal year 1997 Cochran
Fellowship participant levels.
Answer. In fiscal year 1996, a total of 676 participants from 44
countries received training under the Cochran Fellowship Program. Of
the total, 287 participants (39 percent of the total) were funded by
appropriations, 207 participants (31 percent of total) were funded by
USDA's Emerging Markets Office (EMO), and 182 participants (27 percent
of the total) were funded by the U.S. Agency for International
Development (USAID) under the Freedom Support Act. Appropriations were
used in 29 countries of Asia, Latin America, Africa, and Eastern
Europe. EMO funds were used in Eastern Europe (excluding Turkey), South
Africa and Namibia, and Russia, Ukraine and Kazakstan. Freedom Support
Act funding was used in the 12 New Independent States.
The following provides the fiscal year 1996 participant levels by
region and by country:
--Asia: 102 participants from seven countries: Korea (16
participants), Malaysia (8), China (24), Thailand (17),
Indonesia (10), Philippines (25), and Vietnam (2)
--Eastern Europe: 171 participants from 13 countries: Turkey (12),
Poland (34), Hungary (13), Czech Republic (10), Slovakia (15),
Albania (7), Bulgaria (22), Slovenia (16), Croatia (8), Latvia
(10), Estonia (10), Lithuania (6), and Romania (8).
--Latin America: 85 participants from seven North, Central, and South
American countries: Mexico (32), Venezuela (9), Trinidad &
Tobago (8), Barbados & Other West Indies (2), Panama (9),
Colombia (19), and Chile (6).
--Africa: 47 participants from five African countries: Cote d' Ivoire
(2), Algeria (6), Tunisia (14), South Africa (22), and Namibia
(3).
--New Independent States: 271 participants from the New Independent
States of the Former Soviet Union: Russia (121), Ukraine (43),
Belarus (13), Kazakstan (23), Kyrgyzstan (7), Uzbekistan (8),
Turkmenistan (6), Tajikistan (9), Armenia (18), Moldova (12),
Georgia (5), and Azerbaijan (6).
In fiscal year 1997, the Cochran Fellowship Program will work in
the above mentioned countries except Belarus and possibly Albania. In
addition, pilot programs will be started in Brazil, Kenya, and Bosnia.
The program in Vietnam will be expanded using EMO funding. We expect to
provide training to more than 700 participants in fiscal year 1997.
Question. Also, please provide examples of achievements, by
country, the Program has documented in 1996.
Answer. The Cochran Fellowship Program provides an effective method
of providing U.S.-based training for international agriculturists and
business persons. The program is a tool for expanding U.S. contacts
within the country, addressing important policy and trade-related
issues, and in promoting contact with the U.S. agribusiness sector. The
following provide examples of the success of the 1996 program.
Vietnam.--The Cochran Fellowship Program was initiated in Vietnam
in 1996.The Agricultural Attache in Hanoi states: ``FAS/Hanoi is
extremely pleased with the development of the Cochran Fellowship
Program in Vietnam. The program has served to expand our contacts and
increase our knowledge and understanding of the agricultural sector.
The implementation phase of the program will help develop the linkages
necessary to expand the market for U.S. agricultural products here in
Vietnam.''
Korea.--The FAS Agricultural Office in Seoul reports that Cochran
Programs in food safety have helped improve mutual understanding of
food safety and technical issues: ``The end result has been fewer
misunderstandings, relatively fewer problems, and improved access for
U.S. agricultural products. This has been especially true for high-
valued U.S. agricultural products, an area that is the fastest growing
and approaching $1 billion annually.''
Korea.--The Oregon Department of Agriculture reports that Korea has
approved the Oregon Export Service Center as the foreign testing center
for pre-clearance of U.S. products going to Korea. ``We are the first
organization that Korea has ever considered to certify as a foreign
testing organization. This is a milestone for us and the Cochran
Program helped us a great deal in achieving this goal.'' Twenty-two
(22) Cochran-sponsored officials from the Korean Ministry of Health &
Social Welfare and Food & Drug Administration have visited the Oregon
Export Service Center over the past three years.
China.--The FAS Agricultural Trade Office in Guangzhou, China
reports that a 1995 Seafood Team ``produced excellent contacts with an
enormous industry with which the U.S. had limited previous contacts. At
a quantified minimum, hundreds of thousands--possibly millions--of
dollars worth of trade has resulted directly from that one team.''
Malaysia.--A Senior Advisor from the Prime Minister's Office in
Malaysia reports that as a result of his Cochran Halal Bilateral
Education Program he is forming a Halal Coordination Council for
Malaysia (HCCM) in Chicago. Once established HCCM would be able to
approve U.S. Halal slaughter facilities without Malaysian authorities
having to physically inspect the facilities. They are working to have
HCCM be recognized by other Muslim countries such as Saudi Arabia. This
could greatly facilitate poultry and other livestock exports to Muslim
countries.
Thailand.--The Thai Tanners Association identified their
participation in Cochran Programs several years ago as the major reason
Thai importers of hides and skins switched to U.S. suppliers. Exports
of U.S. hides and skins to Thailand have shown tremendous gains over
the past five years.
Mexico.--Over the past six months, the Cochran Program in
conjunction with FAS Export Credits, CoBank in Denver, and the National
Cattle Breeders Association has provided training to Mexican bankers on
the GSM-103 livestock program for Mexico. Since the initial training,
five sales of U.S. livestock have been registered with USDA for about
$2.2 million and at least two other sales of $3 and $4 million
respectively are being negotiated.
Colombia.--Two Colombian alumni who trained in the U.S. in 1992 and
1993 report purchases of more than 1,500 breeding sows. Colombian food
retailers reported purchases of popcorn ($500,000), cookies ($250,000),
and dried beans after their Cochran program.
Venezuela.--FAS Caracas reports that a Venezuelan cattleman learned
how to perform embryo transplants and has already purchased U.S.
Brahman embryos and equipment used in embryo transplants. In another
example, two Venezuelan Ministry of Agriculture officials learned how
commodity boards of trade operate. This training will assist in
establishing a commodity board of trade in Venezuela, which will
strengthen market-oriented policies and promote trade.
Panama.--A 1995 Cochran participant developed a new store layout,
better displays and advertising, and a more consumer-oriented attitude
after his supermarket training. This has led to a faster turnover of
products, which includes new purchases of deli meat, hams, fresh
produce, and cheeses from the United States.
Poland.--Poland required imported oak logs to be debarked prior to
shipping because they were concerned about pests in the bark. Debarked
logs, however, often became damaged during shipment and thus became
unsuitable for use in veneer. The Polish General Director for Plant
Quarantine observed U.S. fumigation methods and was convinced that
with-bark-on logs from the U.S. were not a threat if the logs were
properly fumigated. The regulations to allow with-bark-on logs became
effective in February 1996.
Regional East Europe.--The FAS Agricultural Attache in Vienna
states that ``the Cochran Program is one of the most beneficial tools
available in promoting goodwill, building contacts, and promoting trade
opportunities in the region.''
Slovenia.--The FAS Agricultural Attache in Vienna reports that a
joint 1996 Cochran/American Soybean Association training activity on
the use of soybean meal in livestock feed has resulted in sales of
25,000 metric tons of U.S. corn and 5,000 metric tons of U.S. soybean
meal valued at about $7 million.
Turkey.--A Turkish participant reported that his company is
concluding a long-term contract with a Californian supplier of sauces,
mustard, mayonnaise, and sweet corn after attending the FMI/NASDA Food
Showcase. He stated: ``I believe this program to be of utmost
importance in promoting U.S. products for the simple reason that we had
no intention of importing U.S. products until we came under the
program.''
Albania.--The FAS Agricultural Office covering Albania reports that
Cochran seed certification training has helped convince Albanian import
authorities of the quality of U.S. certified seed: ``Despite very tight
Albanian import requirements, the (first shipment of U.S. certified)
seeds had no problem with entry or registration.''
Uzbekistan.--A 1995 Cochran fellow from Uzbekistan started a small
food store in a joint venture with a U.S. company. He imported $130,000
worth of U.S. consumer products in 1996. The participant will pay his
own way to the 1997 Food Marketing Institute (FMI) Food Expo in Chicago
in order to become familiar with additional U.S. consumer ready foods.
Russia.--A businessman from the Russian Far East attended the
Produce Marketing Association meeting in San Diego and purchased, on a
trial basis, more than $220,000 worth of U.S. apples, pears, and other
fruits. If successful in the trial market, the participant promises to
import that much per month. Another businessman from the Russian Far
East is importing 1,200 metric tons per month of flour from a Seattle
flour company he visited during his 1995 Cochran program.
Cote d' Ivoire.--The Agricultural Attache in Cote d' Ivoire reports
that Cochran alumni have already imported or plan to import $20 million
of brown rice under Public Law 480 Title I and about $30 million on
commercial terms. A banker, who was part of a Cochran GSM-103
Agricultural Export Credit Team, reports that his bank facilitated the
financing for the above purchases, and is working on financing 6,000
metric tons of U.S. soy oil.
export subsidy programs
Question. Please provide the total amount of bonus awards to U.S.
exporters under the Export Enhancement Program, the Dairy Export
Incentive Program, and the Sunflower and Cottonseed Oil Assistance
Programs in each of fiscal years 1995 and 1996 and estimated for fiscal
year 1997.
Answer. I will be glad to provide that information for the record.
[The information follows:]
EXPORT ENHANCEMENT PROGRAM--AWARDS FOR FISCAL YEARS
------------------------------------------------------------------------
Commodity Quantity (MT) Mean bonus
------------------------------------------------------------------------
Fiscal year 1995:
Barley malt....................... 112,700 $3,740,640.00
Barley or malting barley.......... 75,000 1,963,750.00
Eggs.............................. \1\ 63,781,720 13,178,873.47
Feed grains....................... 396,208 11,483,323.04
Frozen pork....................... 21,030 12,704,714.00
Frozen poultry.................... 40,243 20,823,145.00
Rice.............................. 112,747 5,047,393.00
Wheat............................. 13,906,704 243,133,273.97
Wheat Flour....................... 309,799 27,409,110.48
-----------------
Total........................... .............. 339,484,222.96
=================
Fiscal year 1996: Frozen poultry...... 11,125 5,152,850.00
-----------------
Total........................... .............. 5,152,850.00
=================
Fiscal year 1997: There are no awards
for fiscal year 1997 to date.
------------------------------------------------------------------------
\1\ Dozen.
DAIRY EXPORT INCENTIVE PROGRAM--AWARDS FOR FISCAL YEARS
------------------------------------------------------------------------
Commodity Quantity (MT) Mean bonus
------------------------------------------------------------------------
Fiscal year 1995:
Andydrous milkfat................. 15,243 $7,941,756.20
Butter............................ 12,904 6,009,871.50
Butteroil......................... 2,239 1,185,533.00
Butteroil and/or anhydrous milkfat 8,164 6,450,435.50
Cheddar cheese.................... 1,359 1,834,105.00
Mozzarella cheese................. 1,839 1,964,077.00
Nonfat dry milk................... 186,898 97,655,598.60
Processed American cheese......... 227 182,482.28
Whole milk powder................. 19,384 17,000,948.75
-----------------
Total........................... .............. 140,224,807.83
=================
Fiscal year 1996:
Cheddar cheese.................... 158 162,740.00
Cream cheese...................... 290 109,360.00
Mozzarella cheese................. 1,139 1,006,620.00
Nonfat dry milk................... 42,674 16,817,678.93
Processed American cheese......... 904 776,929.64
Whole milk powder................. 2,580 1,550,938.78
-----------------
Total........................... .............. 20,424,267.35
=================
Fiscal year 1997 (through April 14,
1997):
Anhydrous milkfat................. 863 741,190.00
Butter............................ 120 64,456.50
Cheddar cheese.................... 76 50,426.00
Mozzarella cheese................. 722 500,588.00
Nonfat dry milk................... 38,604 30,116,043.15
Processed American cheese......... 498 287,456.40
Whole milk powder................. 1,496 1,509,381.50
-----------------
Total........................... .............. 33,269,541.55
------------------------------------------------------------------------
QUANTITY AWARDED UNDER THE COTTONSEED OIL AND SUNFLOWERSEED OIL ASSISTANCE PROGRAMS
[Date of agreement for fiscal year]
----------------------------------------------------------------------------------------------------------------
Quantity/ Estimated \1\ Actual \2\
Country awarded (MT) bonus awarded bonus paid
----------------------------------------------------------------------------------------------------------------
Cottonseed Assistance Program
Fiscal year 1995: Egypt (515A-1)................................ 1,200 $16,800.00 $16,796.78
-----------------------------------------------
Total..................................................... 1,200 16,800.00 16,796.78
===============================================
Total bonus value:
Sunflowerseed oil........................................... .............. 16,800.00 16,796.78
Cottonseed oil.............................................. .............. .............. ..............
-----------------------------------------------
Total..................................................... .............. 16,800.00 16,796.78
===============================================
Fiscal year 1996: There were no awards for fiscal year 1996.
Fiscal year 1997: There are no awards for fiscal year 1997.
----------------------------------------------------------------------------------------------------------------
\1\ During fiscal years 1989-1991, the bonus was paid in physical stocks of oil. For these years, the Estimated
Bonus Awarded represents the estimate of the cost of the bonus oil on the date of the Agreement. For later
years, this column shows the bonus on the quantity awarded exclusive of shipment tolerances.
\2\ The Actual Bonus Paid reflects the cost of the bonus oil purchased in fiscal years 1989-1991. In later years
it reflects bonus payments on the quantity exported, inclusive of tolerances.
______
Questions Submitted by Senator Burns
foreign agricultural service
Question. It is my understanding that your agency does not approve
of the line item budget for the Foreign Market Development account. It
has been stated that you are not able to place more funds into the
account than what is the line item of appropriations, basically that
you can not put more money in than what is legal. Yet your agency has
never put any more money in the account in the past, why should this
Senator and the cooperators believe you would deposit more money in the
account now?
Answer. It has been FAS policy to provide the maximum level of
support possible to the Foreign Market Development Cooperator Program.
In six of the past ten fiscal years, FAS has provided additional
funding for the program beyond the baseline level for that particular
year and we have every intention of continuing this policy.
Question. FAS intends to assist American agriculture to increase
the value of farm, food, fish, and forestry exports by 50 percent over
1994 levels by the year 2000. To meet this goal, FAS will conduct a
``demand-driven export strategy, deploying five major policy objectives
to execute the strategy while integrating commodity and country market
priorities for allocating scarce export assistance resources.'' How
does strategic outreach and market intelligence fulfill the strategy of
doing more with less? In other words, why invest in efforts to increase
domestic awareness of export opportunities/global consumer quality and
safety expectations, as well as educating foreign buyers about the
merits of U.S. products and how they may be purchased, when the
private-sector is already doing these things without additional federal
expenditure?
Answer. Dunn and Bradstreet reports there are approximately 150,000
companies in the United States producing, manufacturing, packing or
marketing agricultural products, yet fewer than 10,000 are actually
engaged in exporting. With sales to the export market growing at three
times the rate of the domestic market it is very important that U.S.
companies be alerted to overseas opportunities and the potential for
profit. Increased exports create jobs in both urban and rural
communities, provide a safety net for farm income, and contribute
positively to the balance of trade. It is clearly in the best interest
of the national economy that the Government engage in increasing
domestic awareness of global market opportunities, consumer quality and
safety expectations, and educate foreign buyers about the merits of
U.S. products. The USDA using its extensive communication network and
relationships with universities, export assistance centers and, in
particular, the State Departments of Agriculture is effectively
conveying the message to small, medium and new-to-export companies and
cooperatives alike that real export opportunities exist, and that USDA
can be a full partner to the private sector in expanding sales,
developing new markets and promoting new products. Frequently,
companies are reluctant to attempt the export market because of the
greater risks and higher demands for new market information and country
specific knowledge. These barriers reduce possible exports without
Federal encouragement and support. The private sector is neither
organized nor equipped to conduct the type of information campaign
needed to be effective in reaching such a diverse and wide-spread
target audience.
Question. Consistent with the implementation of the Government
Performance and Results Act (GPRA), FAS has articulated a ``General
Goal No. 2: Increase Foreign Demand for U.S. Agricultural, Fish, and
Forest Product Exports through Market Development and Promotion
Activities.'' Aside from the obvious question of why this is not the
agency's number 1 goal, why does FAS propose to cut FAS foreign market
development activities, particularly from Foreign Market Development
Cooperator Program to fund the CCC Computer Facility?
Answer. The 1996 FAIR Act includes provisions that limit CCC
funding made available each year to other agencies through reimbursable
agreements. Because of this limitation and the nature of the activities
involved, the budget proposes to shift the annual operating costs of
the CCC Computer Facility and related IRM activities as well as the
Emerging Markets Program, with a combined fiscal year 1998 budget of
$19.7 million, from mandatory funding to discretionary funding in the
FAS annual appropriation. FAS, currently uses about half of the total
section 11 cap, which is needed to fund other CCC activities,
activities more relevant to the CCC mission in NRCS and FSA. However,
the President's commitment to achieving a balanced budget by 2002 has
also placed constraints on discretionary spending and, as a result, the
FAS budget includes an increase of $14.0 million for these activities,
with $5.7 million balance to be absorbed through reductions in FAS
market development activities. This was not a decision that was made
lightly. However, this reduction can be ameliorated by increased cost-
sharing by participants in the Foreign Market Development Program.
Question. FAS proposes an increase of $500,000 to implement a
systematic process to review, identify, and catalog technical barriers
to trade and other technical requirements that limit export
opportunities for U.S. agricultural products in the top 30 U.S. export
markets. Presumably, the private-sector representatives faced with
these barriers to trade are better able to identify the problem and
propose solutions to these market access problems. Why devote the time
and effort at this time to the compilation of a catalog of barriers to
trade?
Answer. FAS receives daily numerous questions regarding various
types of market access issues. These range from persons wanting to
start-up in the export market to current high-volume exporters with a
newly identified (minor or major) barrier. Servicing these questions in
a systematic and consistent manner will remain an ongoing challenge.
Providing FAS and its key export development partners with improved
tools is a key function of this initiative. It will serve both daily
market servicing and outreach as well as strategic issue resolution.
A major gain in the Uruguay Round was agreement to include
disciplines on technical barriers to trade. Elaboration of the specific
disciplines in both the Agreement on Technical Barriers to Trade and
the Agreement on the Application of Sanitary and Phytosanitary Measures
is continuing, especially with regard to harmonization, equivalency and
consistency. Clearly a starting point for a meaningful discussion of
all these is knowing how transparent or non-transparent a market is.
This initiative will take a more comprehensive, detailed approach to
transparency issues with respect to U.S. agricultural export interests
in the top 30 U.S. markets.
Transparency is to know in advance what will be expected if I want
to export x product to y country. This information is not always
readily available. This initiative is in line with the objectives of
improved government services and more systematic servicing and outreach
to current and potential U.S. agricultural exporters.
Question. In fiscal year 1996, FAS located staff with the
California, Colorado, and Oregon State Departments of Agriculture and
the Iowa State Office of USDA's Farm Service Agency. How has the
expenditure for these domestically located FAS personnel resulted in
increased exports? Can you quantify this?
Answer. Increased agricultural exports are generated by established
exporters and new-to-export companies and cooperatives. USDA is engaged
in a massive domestic awareness campaign highlighting export
opportunities, and the supportive nature of USDA export assistance
programs. USDA established the four domestic offices for FAS personnel
to be closer to provide first hand export counseling. This counseling
and use of USDA export assistance programs has gotten some companies to
take the first step. The resultant sales represent tangible evidence of
USDA's commitment to expanding the number of exporting companies and
can be linked to the efforts of our domestic offices in partnership
with State Departments of Agriculture.
Question. How does ``Outreach'' to small, medium and new-to-export
businesses help U.S. farmers? Is this function better provided by the
Commerce Department?
Answer. Targeting small, medium and new-to-export companies in
addition to cooperatives has led to a higher rate of export
participation among these groups. USDA continues to expand its
distribution of knowledge and information on export opportunities and
export markets to a wide range of target groups and trade-assistance
organizations. USDA is clearly best suited to assist established
exporters and new-to-export companies in gaining entry to new markets
and successfully selling new products because of an extensive
agricultural attache network system overseas, the largest export
information network in the world, and corresponding export programs and
services designed specifically for agricultural companies and
cooperatives. The expertise of the Department of Commerce, and focus of
their export assistance and information network is strictly non-
agricultural. In addition, USDA's partners with the Department of
Commerce to provide a seamless delivery system to companies seeking to
export such non-agricultural, yet related, products as fertilizer,
pesticides or agricultural equipment. The USDA has in place solid
industry partnerships, and a efficient and effective delivery system to
serve agricultural companies wishing to export overseas which is second
to none.
Question. How much did the 48 outreach events cost per the
approximately 2,100 participants?
Answer. As part of the 1996 USDA Global Attache Conference, FAS in
partnership with FSA and the State Departments of Agriculture held 48
outreach events in 46 States plus Puerto Rico. Approximately 2,100
people attended, but thousands more were indirect participants
contacted via extensive local television, radio and newspaper and
magazine articles. The cost of the participating attaches at each of
the events was minimized by arranging for many to simply stop at a
selected state on the way to the conference or returning to their
foreign post. The events, while organized and publicized by State
Department of Agriculture officials, offered opportunities for local
news coverage touting the success of a community business or
highlighting the potential impact of exports on local transportation,
manufacturing or financial services. The overall cost for attache
participation which would include any additional air fare, per diem,
and related expenses was under $100,000, but the extent of contact,
that is the inclusion of indirect participants, far exceeds the
impression provided by the 2,100 estimate and must be factored in
accordingly.
Question. The FAS budget request reads as follows: ``With the
privatization of many markets and the more disciplined use of export
subsidies in the post Uruguay Round environment, the value of the more
traditional marketing effort of the FMD (Foreign Market Development
Cooperator Program) will take on an increasingly important role in the
U.S. Long Term Agricultural Trade Strategy (LATS). While the nature of
these mid-to long-term marketing programs tends to make measuring the
overall success of the program difficult, it is quite clear that the
FMD will play a key role in implementing the LATS and reaching the
Department's Export Goal 2000. The FMD has already contributed to this
effort, with the value of U.S. exports of bulk commodities (wheat,
course grains, rice, soybeans, cotton, tobacco, pulses, peanuts, and
others) having increased from $18 billion to $26 billion in the years
1991-1996.'' Why are you cutting the budget for this program from $27.5
million to $22 million?
Answer. The decision to propose reduced funding for the FMD was not
easy to make but simply reflects the fiscal realities we all face as we
move toward the objective of a balanced budget by the year 2002. The
constraints on both the mandatory and discretionary accounts required a
number of difficult choices to be made, including the proposal to
reduce funding for the FMD program as well as other market development
activities. The impact of the reduced level of federal contribution can
be offset by higher contribution levels from program participants.
Question. Under the heading Research and Scientific Activities, FAS
noted that it recruited a California confectionery company to form a
joint venture with an Irish counterpart using economic growth and job
creation as a ``common ground upon which lasting peace can be built.''
Further, it noted that ``discussions are still underway with a
recruited Fortune 500 agricultural company to form a similar
relationship in Ireland.'' What did this cost and how did/will U.S.
farmers benefit from this activity?
Answer. FAS costs were minimal in this effort, consisting only of a
small portion of one staff person's time, to help develop a list of
American food companies and agricultural cooperatives that were
interested in exploring investment opportunities in Ireland. This
included preparations for the White House Conference on Trade and
Investment with Ireland. While the joint venture of the California and
Irish confectionery companies was promising, they have since terminated
their partnership due to a lack of agreement on whether the U.S.
company would be a partner or a customer for distribution of product.
No sales of U.S. agricultural products resulted from the partnership.
With regard to the Fortune 500 agricultural companies recruitment
efforts, no partnership has resulted.
______
Questions Submitted by Senator Bumpers
value-added v. bulk commodity
Question. Shouldn't the higher levels for value-added products help
offset the lower levels for rough grains?
Answer. Yes. For fiscal year 1997, USDA is expecting overall U.S.
agricultural exports will decline to $56.5 billion, down roughly $3.5
billion from the record level set in 1996. This overall expected
decline is entirely attributable to lower bulk commodity exports, led
by wheat and coarse grain exports which are forecast to fall by a
combined $5.4 billion. Partially offsetting this bulk commodity
decline, U.S. exports of value-added (or high-value) agricultural
exports are projected to rise $2.5 billion to a new record high of $33
billion.
While 1997 is expected to be a disappointing year for wheat and
coarse grains, the longer term prospects for these and other bulk
commodities are decidedly more bullish. By the year 2002, USDA baseline
estimates project the volume of U.S. wheat exports will rise by 47
percent from 1997 levels and coarse grains will rise by 35 percent.
With high-value exports expected to grow by 27 percent during the same
period, this means U.S. agricultural exports will be advancing along a
broad front as we enter the 21st century with total farm product
exports approaching $70 billion by 2002.
Question. What are the ratios for these categories of exports?
Answer. In fiscal 1997, U.S. exports of bulk commodities are
forecast to total $23.5 billion, representing 41.5 percent of total
agricultural exports. High-value products are forecast to reach $33
billion, accounting for the 58.5 percent of total exports.
Question. How much has each category increased or decreased from
the previous year?
Answer. Bulk commodities' share of total U.S. agricultural exports
has declined, from 48 percent in 1996 to 41.5 percent projected for
1997. Conversely, high value products' share of the total has increased
from 52 percent in 1996 to a projected 58.5 percent in 1997. These
developments are part of a longer term trend that has seen bulk
commodities' share of total U.S. agricultural exports fall from 70
percent in 1980 to the current estimate of 41.5 percent, while high-
value products have gone from 30 percent in 1980 to almost 58.5 percent
projected for 1997. By 2002, USDA projects high-value products will
account for 60 percent of total agricultural exports.
food safety of imports as a trade issue
Question. Because we are entering a global food market, what can be
done to prevent problems like we have seen last week with the case of
tainted strawberries from Mexico?
Answer. FAS is very actively engaged in the international processes
fostering trade in agricultural and food products. FAS focuses
attention on rules, procedures and guidelines to expand U.S.
agricultural exports, but we are also keenly aware these same rules
must apply to U.S. imports. The experience with strawberries again
reminds us that no process is perfect. Within its mission goal as a
trade agency, FAS has taken on this and other similar food safety
issues (such as E. coli in apple juice to Japan): within hours FAS
responded definitively to foreign countries' concerns that U.S. shipped
product may have included unsafe lots of specific products. FAS will
continue to work with other regulatory agencies to provide foreign
partners these types of timely, valuable information. FAS also
continues to work within established U.S. inter-agency processes to
further international standardization for food safety concern.
importance of exports to u.s. agriculture
Question. Is the fact that the agricultural sector is twice as
dependent on exports (and projected to be 2.5 times as dependent by the
year 2000) than other sectors of our economy a good sign or a bad sign?
Answer. We feel this is a good sign as it reflects the growing
competitiveness of the U.S. agricultural sector in the global market
place. Furthermore, the expansion of U.S. agricultural trade results in
increased employment for U.S. citizens and increased profits for U.S.
companies. It also allows U.S. companies to realize significant
economies of scale, which can lower prices for U.S. consumers. Without
the positive stimulus of a expanding export market, many U.S.
agricultural industries would be forced to contract significantly.
Exports represent the future of American agriculture. This is why USDA
is so keenly interested in opening foreign markets and using its export
programs to counter the efforts of competitor governments who use their
own well funded programs to give their producers an advantage in the
global battle for market share. In the wake of the FAIR Act, increasing
export opportunities is one of USDA's highest priorities since export
expansion has become a key component of the safety net for our
producers.
Question. Does this mean that agriculture is more vulnerable to the
often disruptive nature of foreign markets and foreign governments'
trade policies?
Answer. There is no denying that as our producers become more fully
integrated in the global food market, the possibility of facing
disruptions rises. This is an inherent risk with doing business
internationally. However, USDA is doing everything in its power to
ensure that disruptive actions are minimized. For example, the USDA
puts a premium not only on opening foreign markets but ensuring there
is no backsliding on prior commitments by our trade partners. We see
the biggest threat coming from sanitary and phytosanitary (SPS)
barriers where governments in the past have resorted to unsound science
to justify restricting other countries' access to their markets. For
that reason, we have increased the level of our resources devoted to
monitoring other countries actions in this area and, if problems arise,
we will do whatever is necessary to negotiate a solution that protects
our industry's interests as we did when U.S. poultry exports to Russia
were halted.
clarification of aquaculture v. seafood
Question. You indicated the $2.9 billion sales in edible fish and
seafood was in addition to ``agricultural'' exports. Why are they not
considered part of ``agricultural'' exports?
Answer. Traditionally, exports of products such as seafood and
solid wood products were handled by the Department of Commerce and,
therefore, have not been included as ``agricultural'' exports. In terms
of FAS programs, Congress has defined fishery products as agricultural
products. Now that we are actively working to open and develop markets
for fishery products, we will explore incorporating fishery products
trade in the agricultural statistics.
Question. Why did the edible fish and seafood exports fall from the
95 level?
Answer. The value of exports fell primarily because of lower prices
for salmon and crab. Large increases in farmed salmon production in
Norway and Chile have depressed world salmon prices in general and
increased competition, weakening prices to our number one market,
Japan.
Question. What was the balance of trade in edible fish and seafood
for that year?
Answer. We imported $6.6 billion of seafood products in 1996
resulting in a trade deficit of $3.7 billion. Shrimp accounted for 37
percent of these imports.
Question. How is the domestic demand for these products affecting
our export and import activities?
Answer. Many of our exports consist of products where our supply
exceeds U.S. demand (e.g., monkfish, squid, dogfish, frozen salmon) and
include products such as sockeye salmon and monkfish livers which are
exported for top dollar. Primarily we import products that are not
readily available in the U.S. (i.e., shrimp, year-round fresh salmon,
swordfish, etc.)
developing markets for pork
Question. What will be the short and long term effect of the Taiwan
pork health problems for US exports and US producers of pork and other
agricultural commodities?
Answer. The immediate effect of the foot-and-mouth disease (FMD)
outbreak in Taiwan has been an increase in orders from Japan for U.S.
fresh/chilled pork. The sharpest impact is expected to occur beginning
in July, when Japan's stocks of frozen pork are drawn down, and Japan's
gate price (minimum import price) for pork is reduced. Total U.S. pork
exports for 1997 are now forecast to increase by 44 percent over 1996.
This represent an increase of 23 percent over pre-FMD estimates.
Taiwan is expected to remain out of the pork exporting business for
3 to 5 years, and will find it difficult to reestablish its dominant
position in the Japanese market. This absence will provide U.S.
exporters the opportunity to improve their trade contacts within the
Japanese industry and make permanent gains in market share.
U.S. pork producers are likely to see improved prices this year.
Increased domestic demand for corn and soybeans will likely offset any
reduction in demand from Taiwan.
The outbreak of foot-and-mouth disease among Taiwan's swine
population now affects 3,255 of Taiwan's estimated 25,000 hog farms.
Taiwanese government policy requires the destruction of all hogs on
infected farms, a number that now totals over 2.7 million head.
Estimates for the recovery of Taiwan's pork industry range from 3 to 5
years.
The ban on exports of Taiwanese pork has left a substantial gap in
Japan's supply of imported pork. This gap has created an opportunity
for U.S. pork exporters to increase their market share in Japan. U.S.
pork exports to Japan are forecast to increase an additional 123,000 MT
in 1997. This would raise U.S. pork exports from 6.5 to 8 percent of
total domestic production in 1997.
developing markets for beef
Question. Can U.S. beef gains in Korea offset our problems with the
EU?
Answer. We do not expect sales of U.S. beef to the EU to decline
dramatically. As a matter of fact, U.S. beef exports to the EU have
recovered since the imposition of the beef hormone ban, increasing from
$18 million in 1989 to about $30 million in 1996. U.S. sales of beef to
Korea, our third largest beef market, are expected to grow in 1997, as
Korean imports are forecast up 19 percent for the year to 234,000
metric tons. This year, we expect U.S. beef exports to increase 19
percent to $330 million. The U.S. should maintain its majority share in
1997 as U.S. beef does well in the Hotel/Restaurant (HRI) sector. This
sector accounts for over 60 percent of total beef consumed in Korea.
Also, some chilled beef imports are expected to enter Korea this year,
which should benefit the United States. We expect continued growth in
beef exports, as market access increases under the U.S.-Korea Beef
Agreement. Under this agreement, the amount of beef permitted to be
imported for private sector sales will increase annually until January
1, 2001. At that time, all non-tariff barriers to beef imports,
including state trading, will be removed.
Question. What is the state of beef and other commodity access to
the EU?
Answer. We work to preserve or expand market access for a variety
of products, both through the WTO and through bilateral contact with
the Commission and EU member states. The EU remains the second largest
export market for U.S. agricultural products (after Japan) and over the
last five years, the value of agricultural exports to the EU has grown
17 percent to $9 billion. Major components of our trade with the EU
include soybeans ($2.3 billion), forest products ($1.2 billion), tree
nuts ($842 million), tobacco ($653 million) and coarse grains ($375
million). Consumer-oriented products show particular promise and (as a
group) have grown from $1.8 billion to $2.5 billion over the past 5
years. In 1989, the introduction of both the EU's ban on meat from
hormone-treated animals and its Third Country Meat Directive resulted
in a drastic decline in U.S. beef exports to the EU. U.S. exports of
beef and beef offal plummeted from over $100 million in 1985-87 to $18
million in 1989. Since 1989, exports of beef have actually recovered
($40 million in 1995, compared with $15 million in 1985-87), but offal
exports have not ($13 million in 1995, down from $90 million in 1985-
87).
Question. What steps are being taken to eliminate barriers with the
EU?
Answer. Many of our trade policy efforts with the EU in the past
decade have focused on the meat and livestock area. Both before and
after implementation of the EU's Third Country Meat Directive, United
States Government (USG) officials engaged in negotiations aimed at
preserving access for our meat products. In 1992, conclusion of the
U.S.-EU Red Meat Agreement succeeded in eliminating many of the
barriers that had been imposed on our beef industry, and U.S. beef
exports recovered somewhat.
Unfortunately, because of the hormone ban, U.S. offal trade has not
recovered, and beef exports have not been able to grow as they
otherwise would have. After years of fruitless attempts to resolve this
issue bilaterally, and with the improved leverage of the Sanitary and
Phytosanitary (SPS) Agreement and the dispute settlement procedures in
the WTO, in 1996 the USG embarked upon a dispute settlement process
within the WTO. The three-member panel of judges selected to review the
case have concluded all their meetings, and a final report is expected
in late May 1997. We are hopeful that the outcome will be in the U.S.'s
favor and will result in elimination of the EU ban. In recent years,
the EU has been harmonizing its directives on the whole range of
animals and animal products (including fish products). We have been
negotiating an equivalence agreement, in order to preserve U.S. trade
in these products. We have succeeded in negotiating terms of trade for
most product areas which will allow U.S. trade to continue. We are
still trying to finalize details, particularly regarding poultry
inspection.
Question. What effect has the BSE problems with British beef had on
U.S. exports?
Answer. The only direct effect has been an increase in U.S. exports
of beef to the United Kingdom, which jumped from 587 metric tons in
1995 to 1,384 metric tons in 1996. Indirectly however, fears over BSE
caused considerable anxiety among consumers in important markets for
U.S. beef. This is particularly true in Japan, where the combination of
the BSE scare along with unexplained outbreaks of E. coli dampened beef
consumption and led to slower than expected growth in U.S. exports. We
expect to see a recovery in Japan's beef consumption over the course of
1997. Though no cases of BSE have ever been recorded in the United
States, the controversy surrounding BSE has had an impact on imported
beef in a number of other markets, particularly in Asia.
developing markets for rice
Question. Of the $125 million in U.S. rice sales to Japan, how much
is being consumed in that country rather than being used for other
purposes such as meeting their own foreign food assistance needs?
Answer. Of the approximately 200,000 tons of U.S. rice purchased by
Japan during their 1996/97 import campaign, 13,000 tons purchased under
the semi-private Simultaneous-Buy-Sell (SBS) system is known to have
entered regular marketing channels. Of the remainder, the Government of
Japan (GOJ) has announced its intention to use up to 30,000 tons in
food aid shipments. It is believed that all, or almost all, of the
remaining amount is currently in GOJ stockpiles.
Question. What is the long-term outlook for rice exports to Japan?
Answer. The long term outlook is excellent as long as the GOJ
continues to fulfill market access commitments. The GOJ has repeatedly
stressed its commitment to buying the highest quality rice available
for its domestic consumers. In addition, the GOJ has stated its
intention to monitor SBS purchases as an indicator of consumer
preference for foreign rice. In both of the first two years of Japan's
minimum access rice imports the United States has dominated SBS
purchases.
Question. What is the current state of the Japanese ``mind set''
toward consumption of U.S. rice?
Answer. Japanese consumers have had little exposure to foreign rice
and U.S. rice exporters are actively engaged--under the auspices of the
USA Rice Federation and with the help of USDA--in promoting U.S. rice
in Japan. We have full confidence in the high-quality of U.S. rice and
the eventual acceptance of U.S. rice by Japanese consumers as long as
the GOJ continues to provide market access for foreign rice.
genetically altered products
Question. You mentioned successes in Japan and the EU in
introducing genetically altered products. Still, we hear reports about
serious objections to those products overseas. What is the current
outlook for overcoming these obstacles?
Answer. Our biggest concern now is that consumers, especially in
Europe, are not receiving the best information and are voicing strong
resistance to biotech products. This is a major topic in our
conversations with various EU government officials and with U.S. and EU
industry. We are encouraging the private sector to do more in the way
of consumer education. We are also working to ensure that any labeling
requirements that are adopted in foreign markets are fair and
reasonable and do not amount to disguised restrictions on trade.
new areas of fas focus
Question. What do the shifts in your focus from Europe to the
Pacific Rim and Latin America mean for various U.S. commodity producers
and regions?
Answer. The shift in focus from Europe to the Pacific Rim and Latin
America is primarily due to changes in market demand and potential for
export growth. FAS' goal is to maximize total U.S. agricultural exports
with a focus on emerging markets and trade opportunities created by
recent trade agreements, promotion of high value products, and export
assistance for small-sized, new-to-export entities and cooperatives.
While Europe continues to be an important market for U.S.
agricultural products, it can no longer be viewed as a high growth
market in comparison to the potential in the Pacific Rim and Latin
America. This change in focus has led to a gradual decline in USDA
export promotion funding for Europe. Although changes in the European
Union's agricultural policy have had notable effects on demand for U.S.
agricultural exports, Europe is still our most important market for
soybeans, peanuts, rice, prunes, raisins, tree nuts, walnuts and
almonds.
FAS continues to take a proactive approach to position our products
in growth markets to help ensure U.S. agriculture's continued export
success and contribution to farm income and rural development. The
growth in U.S. agricultural exports to Latin American and Pacific Rim
markets is more than offsetting any declines in Europe. For example,
twenty years ago the EU accounted for 31 percent of total U.S.
agricultural exports while the Pacific Rim accounted for only 24
percent. Today the EU accounts for only 16 percent, while the Pacific
Rim accounts for approximately 43 percent. FAS will continue to work
closely with the industry to capitalize on trade opportunities and
provide support for those products and activities in those markets that
hold the greatest export potential for the American farmer.
Question. Does this reflect that there are going to be winners and
losers among American farmers based on this change of emphasis?
Answer. No. We do not believe our shift in focus will produce any
losers among American farmers. In fact, that is the very thing we hope
to prevent by refocusing our resources to higher return to mission
markets like the Pacific Rim. However, educating an industry as broad
as agriculture on the importance of these export markets and how to
succeed in them is important to maximizing the numbers of winners.
Therefore, one of our major initiatives over the past couple of years
has been to boost our resource commitment to outreach activities. By
partnering with commodity organizations, government agencies, Congress,
and others, in sponsoring and participating in export seminars and
trade events around the country, we can help our producers and
processors stay current on the strategic shifts in agricultural markets
and informed on how USDA programs, activities, and resources can help
them compete in the global market as we move into the 21st century.
market access program
Question. How have the recent legislative changes to the Market
Access Program (formerly the Market Promotion Program) changed the
programs function in practice?
Answer. The Omnibus Budget Reconciliation Act of 1993 and the
Federal Agriculture Improvement and Reform Act of 1996 have
programmatically changed the MAP in the following manner:
--within the brand program, FAS gives priority assistance to small-
sized entities and agricultural cooperatives;
--FAS limits assistance to promote a specific brand product in a
single market to no more than 5 years;
--an eligible trade organization that receives assistance for generic
promotion must provide a minimum contribution level of 10
percent. FAS has assigned the greatest weight to this factor in
its allocation decisions to encourage a higher degree of cost
sharing. As a result, the average level of contribution is 40
percent;
--each participant must certify that any Federal funds received
supplement, but do not supplant, private or third party
participant funds or other contributions to program activities;
--FAS no longer enters into direct agreements with large companies
under the Export Incentive Program (a component of the MAP).
Question. What have been the results of those changes?
Answer. The most notable results stemming from the above-mentioned
legislated changes are as follows: This year, FAS has targeted 84
percent of the brand promotion funds for small-sized entities and
cooperatives, up from 76 percent in 1996. Funding for generic campaigns
to assist small and new-to-export companies and cooperatives take
advantage of real opportunities in international trade has also
increased from 66 percent in 1996 to 72 percent in 1997. FAS has also
responded to concerns raised by Congress and program critics by
decreasing funding for large companies. Since 1996, only small entities
and cooperatives have been eligible to receive promotional funds
directly from FAS under the Export Incentive Program. FAS has also
reduced funding available to MAP recipients to indirectly fund brand
promotion by large companies by 75 percent since 1995. Beginning with
the 1998 program, FAS will only provide assistance to small-sized
entities and cooperatives within the brand program.
Question. Would you please provide your most recent breakdown of
all MAP allocations (both your most recent actual figures and your most
recent projected figures for the subsequent year) by entity for both
generic and branded promotions and note which of the participants do
not meet the definition of a small business?
Answer. In 1997, FAS made direct allocations to 64 nonprofit trade
organizations and agricultural cooperatives. For purposes of
determining size, the SBA size standards are most applicable to those
U.S. commercial entities that receive indirect assistance through
nonprofit trade associations and state regional trade groups. A list of
the 1996 and 1997 budgets authorized for generic and brand promotions
by organization follows.
[The information follows:]
Market Access Program allocations--fiscal year 1997
1997 MAP
Trade organization allocation
Alaska Seafood Marketing Institute...................... $2,965,056
American Brandy Association--Export..................... 36,294
American Forest & Paper Association..................... 6,280,192
American Jojoba Association............................. 176,324
American Seafood Institute/Rhode Island Seafood Council. 592,923
American Sheep Industry Association..................... 95,141
American Soybean Association............................ 2,203,929
Asparagus USA........................................... 162,938
Blue Diamond Growers.................................... 1,412,689
California Agricultural Export Council.................. 525,178
California Cling Peach Growers Advisory Board........... 727,009
California Kiwifruit Commission......................... 66,095
California Pistachio Commission......................... 815,018
California Prune Board.................................. 2,538,590
California Strawberry Commission........................ 471,614
California Table Grape Commission....................... 1,987,929
California Tree Fruit Agreement......................... 704,566
California Walnut Commission............................ 2,566,006
Cherry Marketing Institute.............................. 154,361
Chocolate Manufacturers Association..................... 721,310
Cotton Council International............................ 9,261,438
Eastern U.S. Agricultural and Food Export Council....... 799,696
Florida Department of Citrus............................ 4,247,525
Hop Growers of America.................................. 103,000
Kentucky Distillers Association......................... 499,401
Mid-America International Agri-Trade Council............ 190,833
Mohair Council of America............................... 75,000
National Association of State Departments of Agriculture 564,788
National Dry Bean Council............................... 306,760
National Grape Cooperative.............................. 664,261
National Honey Board.................................... 132,953
National Peanut Council................................. 837,544
National Potato Research and Promotion Board............ 1,290,688
National Renderers Association.......................... 301,885
National Sunflower Association.......................... 821,958
New York Wine and Grape Foundation...................... 165,673
North American Blueberry Council........................ 92,952
North American Export Grain Association................. 94,225
Northwest Wine Promotion Coalition...................... 119,287
Ocean Spray International, Inc.......................... 319,848
Oregon Seed Council..................................... 180,540
Oregon-Washington-California Pear Bureau................ 974,151
Pet Food Institute...................................... 596,075
Raisin Administrative Committee......................... 2,444,619
Southern United States Trade Association................ 3,097,777
Sunkist Growers, Inc.................................... 2,064,157
Texas Produce Export Association........................ 42,222
The Catfish Institute................................... 304,905
The Popcorn Institute................................... 500,000
United Fresh Fruit and Vegetable Association............ 177,093
USA Dry Pea and Lentil Council.......................... 550,918
USA Fresh Sweet Cherry Promotion........................ 840,401
USA Poultry and Egg Export Council...................... 2,290,770
USA Rice Federation..................................... 2,911,598
USA Tomato.............................................. 481,772
U.S. Apple Association.................................. 438,707
U.S. Dairy Export Council............................... 1,881,135
U.S. Feed Grains Council................................ 2,865,352
U.S. Livestock Genetics Export, Inc..................... 739,981
U.S. Meat Export Federation............................. 8,498,273
U.S. Wheat Associates................................... 2,023,893
Washington Apple Commission............................. 2,470,410
Western United States Agricultural Trade Association.... 4,481,370
Wine Institute.......................................... 3,051,004
--------------------------------------------------------
____________________________________________________
Total............................................. 90,000,000
------------------------------------------------------------------------
1996 ceilings
MAP participant -------------------------------
Branded Generic
------------------------------------------------------------------------
Alaska Seafood Marketing Institute...... $800,000 $2,208,702
Almond Board of California.............. .............. 531,800
American Brandy Association--Export..... 208,146 138,565
American Forest & Paper Association..... .............. 7,490,689
American Jojoba Association............. .............. 165,500
American Seafood Institute/Rhode Island
Seafood Co............................. 259,202 244,798
American Sheep Industry Association..... .............. 343,403
American Soybean Association............ .............. 1,972,747
Asparagus USA........................... .............. 254,575
Blue Diamond Almond Growers............. 1,429,561 ..............
California Agricultural Export Council.. .............. 498,985
California Cling Peach Growers Advisory
Board.................................. .............. 740,000
California Kiwifruit Commission......... .............. 200,363
California Pistachio Commission......... 207,778 657,878
California Prune Board.................. 963,900 1,557,100
California Strawberry Commission........ .............. 508,144
California Table Grape Commission....... .............. 2,058,406
California Tomato Commission/Florida
Tomato Comm............................ .............. 433,441
California Tree Fruit Agreement......... .............. 601,477
California Walnut Commission............ .............. 1,820,278
Cherry Marketing Institute.............. .............. 155,000
Chocolate Manufacturers Association..... 1,472,244 193,116
Cotton Council International............ .............. 9,373,200
Eastern US Agricultural and Food Export
Council................................ 5,148,299 1,254,546
Florida Department of Citrus............ .............. 4,280,355
Ginseng Board of Wisconsin.............. .............. 120,475
Hop Growers of America.................. .............. 94,676
Kentucky Distillers' Association........ 789,206 256,196
Mid-America International Agri-Trade
Council................................ 7,397,656 880,822
Mohair Council of America............... .............. 75,000
National Association of State Dept. of
Agri................................... .............. 547,513
National Dry Bean Council............... .............. 320,129
National Honey Board.................... 42,460 82,765
National Peanut Council................. 202,894 699,300
National Potato Promotion Board......... .............. 1,365,000
National Renderers Association.......... .............. 380,306
National Sunflower Association.......... .............. 720,000
New York Wine and Grape Foundation...... 83,158 147,492
North American Blueberry Council........ .............. 100,000
North American Export Grain Association. .............. 162,686
Northwest Wine Promotion Coalitions..... 89,142 218,990
Ocean Spray International, Inc.......... 308,034 ..............
Oregon Seed Council..................... .............. 168,000
Oregon-Washington California Pear Bureau .............. 948,759
Pet Food Institute...................... .............. 1,145,449
Raisin Administrative Committee......... 231,513 2,190,759
Southern United States Trade Association 5,126,496 803,504
Sunkist Growers, Inc.................... 2,418,571 ..............
Texas Produce Export Association........ .............. 150,000
The Catfish Institute................... .............. 259,765
The Popcorn Institute................... .............. 399,437
United Fresh Fruit and Vegetable
Association............................ .............. 150,000
USA Dry Pea and Lentil Council.......... .............. 443,434
USA Fresh Sweet Cherry Promotion........ 0 760,647
USA Poultry and Egg Export Council...... 1,679,225 1,980,025
USA Rice Federation..................... .............. 3,189,073
U.S. Apple Association.................. .............. 413,235
U.S. Dairy Export Council............... .............. 1,642,437
U.S. Feed Grains Council................ .............. 3,843,963
U.S. Livestock Genetics................. 244,717 785,095
U.S. Meat Export Federation............. 454,851 9,355,681
U.S. Wheat Associates................... .............. 2,171,578
Washington Apple Commission............. .............. 2,049,332
Welch's Food............................ 613,044 ..............
Western United States Agricultural Trade
Assoc.................................. 6,409,844 1,091,405
Wine Institute.......................... 2,509,650 1,987,413
------------------------------------------------------------------------
------------------------------------------------------------------------
1997 ceilings
MAP participant -------------------------------
Generic Branded
------------------------------------------------------------------------
Alaska Seafood Marketing Institute...... $2,569,203 $457,005
American Brandy Association--Export..... 124,126 105,874
American Forest and Paper Association... 7,568,704 ..............
American Jojoba Association............. 200,000 ..............
American Seafood Institute/Rhode Island
Seafood Co............................. 172,854 500,000
American Sheep Industry Association..... 170,000 ..............
American Soybean Association............ 2,550,929 ..............
Asparagus USA........................... 258,103 ..............
Blue Diamond Growers.................... .............. 1,412,691
California Agricultural Export Council.. 649,837 ..............
California Cling Peach Growers Advisory
Board.................................. 798,931 ..............
California Kiwifruit Commission......... 175,000 ..............
California Pistachio Commission......... 721,853 257,250
California Prune Board.................. 1,553,590 1,010,000
California Strawberry Commission........ 536,843 ..............
California Table Grape Commission....... 2,348,272 ..............
California Tomato Commission/Florida
Tomato Committee....................... 665,745 ..............
California Tree Fruit Agreement......... 799,664 ..............
California Walnut Commission............ 2,593,772 ..............
Cherry Marketing Institute.............. 165,292 ..............
Chocolate Manufacturers Association..... 207,876 1,840,004
Cotton Council International............ 9,756,938 ..............
Eastern US Agricultural and Food Export
Council................................ 1,100,000 3,600,000
Florida Department of Citrus............ 4,499,440 ..............
Ginseng Board of Wisconsin \1\.......... .............. ..............
Hop Growers of America.................. 125,000 ..............
Kentucky Distillers' Association........ 446,159 582,847
Mid-America International Agri-Trade
Council................................ 1,000,000 5,700,000
Mohair Council of America............... 55,000 20,000
National Association of State Dept. of
Agri................................... 600,000 ..............
National Dry Bean Council............... 728,469 ..............
National Honey Board.................... 44,582 100,000
National Peanut Council................. 1,251,544 ..............
National Potato Promotion Board......... 1,674,984 ..............
National Renderers Association.......... 354,500 ..............
National Sunflower Association.......... 1,007,958 ..............
New Jersey Fish & Seafood Marketing \2\. .............. ..............
New York Wine and Grape Foundation...... 1,734 189,120
North American Blueberry Council........ 92,952 ..............
North American Export Grain Association. 200,000 ..............
Northwest Wine Promotion Coalitions..... 283,874 ..............
Ocean Spray International, Inc.......... .............. 319,848
Oregon Seed Council..................... 207,540 ..............
Oregon-Washington California Pear Bureau 1,065,813 ..............
Pet Food Institute...................... 1,100,053 ..............
Raisin Administrative Committee......... 2,108,393 336,226
Southern United States Trade Association 900,000 4,800,000
Sunkist Growers, Inc.................... .............. 2,593,546
Texas Produce Export Association........ 123,930 ..............
The Catfish Institute................... 309,905 ..............
The Popcorn Institute................... 522,078 ..............
United Fresh Fruit and Vegetable
Association............................ 191,093 ..............
USA Dry Pea and Lentil Council.......... 585,918 ..............
USA Fresh Sweet Cherry Promotion........ 858,020 ..............
USA Poultry and Egg Export Council...... 2,671,174 1,388,426
USA Rice Federation..................... 3,537,075 ..............
U.S. Apple Association.................. 505,548 ..............
U.S. Dairy Export Council............... 1,934,781 ..............
U.S. Feed Grains Council................ 4,085,338 ..............
U.S. Livestock Genetics................. 793,202 335,500
U.S. Meat Export Federation............. 10,135,146 346,034
U.S. Wheat Associates................... 2,334,389 ..............
Washington Apple Commission............. 3,198,266 ..............
Welch's Food............................ .............. 664,261
Western United States Agricultural Trade
Assoc.................................. 1,300,000 6,200,000
Wine Institute.......................... 2,609,014 1,941,990
-------------------------------
Totals............................ 89,130,404 34,700,622
123,831,026
------------------------------------------------------------------------
\1\ Applied, but not funded.
\2\ Applied, but directed to work with the American Seafood Institute.
Question. Also would you please note the extent and the manner in
which any branded promotion funds were provided to companies indirectly
through trade associations or any other means?
Answer. Companies receive MAP assistance for brand promotions
indirectly through trade associations. I will provide for the record a
list of companies and the budgets for each that have been approved to
date in 1996. The 1997 MAP allocation has just been completed. Funding
available to large companies for brand promotions through trade
associations was reduced by 35 percent in 1996, by 45 percent in 1997
and will be eliminated altogether in 1998.
[The information follows:]
MAP U.S. COMPANY BUDGETS FOR 1996
------------------------------------------------------------------------
Company Cooperative Size Budgeted
------------------------------------------------------------------------
21st Century Genetics.......... ............. S........... $15,500
A&F International.............. ............. S........... 2,500
ABS International.............. ............. S........... 44,084
Accelerated Genetics........... ............. S........... 10,000
Advance Food Company........... ............. L........... 30,000
Advanced Nutritionals ............. S........... 132,500
Corporation.
Ag-Link International, Inc..... ............. S........... 6,000
Agri BeefCo.................... ............. S........... 12,000
Agri Trade International, Inc.. ............. S........... 7,500
Agrisource, Inc................ ............. S........... 15,000
Agway Inc...................... ............. S........... 9,666
AJC International.............. ............. L........... 17,500
Alle Processing Corporation.... ............. S........... 18,250
Allied Foods, Inc.............. ............. S........... 75,000
Allied Processors, Inc......... ............. S........... 46,000
Allied-Sysco................... ............. S........... 80,000
Alpine Lace.................... ............. S........... 50,000
Alta Genetics.................. ............. S........... 17,033
Amal Meat Corp................. ............. S........... 37,500
American Ag-Tec International.. ............. S........... 47,000
American Connoisseur........... ............. S........... 9,500
American Eagle Beverages, Inc.. ............. S........... 150,000
American Home Food Products.... ............. L........... 20,000
American Popcorn Corp.......... ............. S........... 112,750
American Protein Corporation... ............. S........... 69,125
American Soy Products.......... ............. S........... 23,800
American Standard Products, Inc ............. S........... 25,000
American Tanning & Leather ............. S........... 20,000
Company.
AMES International, Inc........ ............. S........... 40,000
AMPC, Inc...................... ............. S........... 63,932
Amy Foods, Inc................. ............. S........... 5,000
Anacon Foods Company........... ............. S........... 21,500
Andes Candies, Inc............. ............. S........... 74,000
Arciero Winery................. ............. S........... 6,000
Ariel Vineyards................ ............. S........... 28,000
Arizona Pepper Products Co..... ............. S........... 48,000
ASB Group International........ ............. S........... 415,000
Aspen International Export Inc. ............. S........... 17,000
Audubon Cellars................ ............. S........... 4,500
Austin Nichols & Co., Inc...... ............. L........... 79,999
Azmex Foods, Inc............... ............. S........... 39,000
A. Smith Bowman Distillery, Inc ............. S........... 49,500
Babe Farms..................... ............. S........... 30,000
Baldwin Vineyards.............. ............. S........... 5,000
Barber Foods................... ............. L........... 60,000
Barnaby's Foods................ ............. S........... 5,000
Bay Pac Beverages.............. ............. S........... 40,000
Bay World...................... ............. S........... 8,500
Beaverton Foods, Inc........... ............. S........... 10,000
Beechnut (Ralston Foods)....... ............. L........... 47,500
Beehive Botanicals............. ............. S........... 15,000
Beer Nuts Inc.................. ............. S........... 30,000
Ben and Jerry's................ ............. S........... 25,000
Bernardi Italian Foods, Inc.... ............. S........... 26,500
Bernardo Perez & Associates.... ............. S........... 40,000
Berrywine Plantations, Inc..... ............. S........... 20,000
Best Brands Inc./American ............. S........... 25,000
Products, Inc.
Better Baked Foods, Inc........ ............. S........... 10,000
Biagio's Gourmet Foods, Inc.... ............. S........... 58,000
Bil Mar Foods.................. ............. L........... 9,000
BioSan Laboratories, Inc....... ............. S........... 120,000
Birdie Corp.................... ............. S........... 10,000
Black Mountain Brewing Co...... ............. S........... 40,000
Blue Bell Creameries, L.P...... ............. L........... 60,000
Blue Diamond Growers........... Y............ ............ 1,479,561
Blue Sky Natural Beverage Co... ............. S........... 10,000
BMTS International............. ............. S........... 40,000
Boboli International, Inc...... ............. S........... 5,000
Bolinger Marketing Inc......... ............. S........... 7,500
Bovine Elite, Inc.............. ............. S........... 4,000
Brach & Brock Confections...... ............. S........... 160,000
Brice Foods, Inc............... ............. S........... 100,000
Brown & Haley.................. ............. S........... 58,000
Bruce Foods Corporation........ ............. S........... 249,000
BST International Corporation.. ............. S........... 20,000
Bunge Foods.................... ............. L........... 6,000
Bush Brothers & Company........ ............. L........... 49,500
B&H General Supply & Marketing ............. S........... 99,250
Corp.
B.M. Lawrence And Company...... ............. S........... 31,000
Cakebread Cellars.............. ............. S........... 4,000
Calico Cottage Candies, Inc.... ............. S........... 15,475
California Kazakhstan Trading ............. S........... 87,000
Company.
California Sun Dry Foods....... ............. S........... 31,000
Campbell Soup Company.......... ............. L........... 145,610
Canadaigua Wine Company........ ............. L........... 132,779
Capital Pet Foods.............. ............. S........... 76,000
Cargill, Inc., Feed Division... ............. L........... 14,500
Carlton Bar A Ranches.......... ............. S........... 4,000
Cascade Clear Water Co......... ............. S........... 24,000
Cascadian Farm................. ............. L........... 20,000
Cecchetti Sebastiani Cellar.... ............. S........... 8,000
Cenzone Tech Inc............... ............. S........... 33,000
Cha Cha Foods.................. ............. S........... 50,000
Charleston Tea Plantation, Inc. ............. S........... 35,000
Chef Paul Prudhomme's Magic ............. S........... 40,000
Seasoning Bl.
ChemGen........................ ............. S........... 18,560
Chenango Valley Pet Foods...... ............. S........... 49,900
Cherrex Corporation............ ............. S........... 185,000
Cherry Central................. ............. S........... 7,873
Chez de Prez Cheesecake, Inc... ............. S........... 99,000
Chihade International, Inc..... ............. S........... 100,000
Childers Food Products......... ............. S........... 45,000
Chukar Cherry Company.......... ............. S........... 20,000
ClawIsland Foods, Inc.......... ............. S........... 24,200
Cloud Nine, Inc................ ............. S........... 26,500
Coast Ridge Cellars............ ............. S........... 57,500
Coastal Health-Age Beverages... ............. S........... 50,000
Cody's Real Pet Products....... ............. S........... 15,000
Coffee Masters................. ............. S........... 38,424
Collin Street Bakery........... ............. S........... 49,000
Compass West................... ............. S........... 20,000
Conagra Frozen Foods........... ............. L........... 136,000
Concannon Vineyard............. ............. S........... 26,300
Continental Imports, Inc....... ............. S........... 49,000
Continental Mills, Inc......... ............. L........... 15,000
Cookie Investment Co., Inc..... ............. S........... 9,000
Cookietree Bakeries............ ............. S........... 97,000
Cornucopia Pet Foods, Inc...... ............. S........... 100,000
Country Fresh Farms ............. S........... 10,000
International.
CPC International/Best Foods ............. L........... 133,300
Exports.
Craft Beers International...... ............. S........... 5,000
Creekside Vineyards............ ............. S........... 2,000
Crichton Hall Vineyard......... ............. S........... 2,500
Crown Products, Inc............ ............. S........... 180,000
Crystal Cream & Butter Company. ............. S........... 20,000
Crystal International ............. S........... 210,000
Corporation.
Crystal Ocean Seafood, Inc..... ............. S........... 23,000
Cumberland Packing Corporation. ............. S........... 37,750
Custom Industries, L.P......... ............. S........... 19,951
Cuvaison Winery................ ............. S........... 20,000
C.S. Steen..................... ............. S........... 5,000
C.H. Guenther & Sons, Inc. dba ............. L........... 35,000
Pioneer F.
Da Vinci Gourmet, Ltd.......... ............. S........... 20,000
Dae Julie, Inc................. ............. S........... 28,000
Dahlgren & Company, Inc........ ............. S........... 16,275
De Beukelaer Corporation....... ............. S........... 35,000
Decas Cranberry Sales, Inc..... ............. S........... 20,000
Deep Sea Fish.................. ............. S........... 17,300
Delicato Vineyards............. ............. S........... 123,000
DeLoach Vineyards, Inc......... ............. S........... 14,000
Desert Rose Foods, Inc......... ............. S........... 40,000
Devlin......................... ............. S........... 1,500
Diamond Pet Foods.............. ............. S........... 39,050
Distributors International..... ............. S........... 67,500
Downey's International Inc..... ............. S........... 5,000
Dreyer's Grand Ice Cream....... ............. S........... 60,000
Dry Creek Vineyard............. ............. S........... 1,500
Dr. Konstantin Frank........... ............. S........... 2,000
Duck Walk Vineyards............ ............. S........... 3,000
Durkee-Mower, Inc.............. ............. S........... 77,500
DXR International, Inc......... ............. S........... 33,000
Earthrise Company.............. ............. S........... 48,000
East Coast Seafood, Inc........ ............. S........... 108,750
Eastern Food Exporters......... ............. S........... 7,000
EBS, Inc....................... ............. S........... 5,000
Edy's Grand Ice Cream.......... ............. L........... 23,833
Eli's Chicago's Finest ............. S........... 36,500
Cheesecake.
Empire Kosher Poultry, Inc..... ............. L........... 10,000
Entenmann's Inc................ ............. S........... 25,000
Entertainment Foods, Inc....... ............. S........... 39,000
Equipment Team Hawaii.......... ............. S........... 31,000
Excalibur Sires................ ............. S........... 4,000
Excel.......................... ............. L........... 10,000
Excel Trade Limited............ ............. S........... 37,000
Export Trade Of America........ ............. S........... 55,000
E. Boyd & Associates, Inc...... ............. S........... 25,000
E. & J. Gallo.................. ............. L........... 915,000
Fantastic Foods, Inc........... ............. S........... 20,000
Far Niente..................... ............. S........... 27,000
Farmland Industries, Inc....... ............. L........... 20,000
Fast Food Merchandisers........ ............. L........... 15,000
Ferrara Pan Candy Company...... ............. S........... 2,000
Fetzer Vineyards............... ............. L........... 45,000
Finnbar International LLC...... ............. S........... 1,150
Firestone Vineyard............. ............. S........... 3,000
Florida European Export-Import ............. S........... 13,000
Co., Inc.
Flower City Nurseries.......... ............. S........... 25,000
Food Producers International... ............. L........... 19,140
Foppiano Vineyards............. ............. S........... 28,000
Foulds, Inc.................... ............. S........... 50,000
Franciscan Vineyards, Inc...... ............. S........... 6,000
Freemark Abbey Winery.......... ............. S........... 4,000
French Gourmet Inc............. ............. S........... 125,000
Frontier Foods, International.. ............. L........... 20,000
Frontier Trading............... ............. L........... 48,000
Fruits International, Inc...... ............. L........... 70,000
Furman Foods Inc............... ............. S........... 20,000
Garden of Eatin' Inc........... ............. S........... 29,000
Garuda International, Inc...... ............. S........... 9,500
General Mills, Inc............. ............. L........... 32,700
Genex Coop..................... ............. S........... 11,500
Gerber Agri, Inc............... ............. L........... 27,500
Gering and Son................. ............. S........... 29,000
Geyser Peak.................... ............. S........... 31,500
Gibson Goodies Inc............. ............. S........... 8,000
Giumarra Vineyards............. ............. L........... 15,000
Global Beverage Company........ ............. S........... 50,000
Global Export Marketing Company ............. S........... 110,000
Golden State Vintners.......... ............. S........... 90,000
Golden Temple Bakery, Inc...... ............. S........... 38,000
Golden Valley Microwave Foods.. ............. L........... 71,700
Goldenberg Candy Co............ ............. S........... 58,000
Good Kama Foods, Inc........... ............. S........... 5,000
Gossner Foods, Inc............. ............. S........... 39,000
Gourmet House.................. ............. L........... 40,988
Graceland Fruit Cooperative, Y............ ............ 13,000
Inc.
Great Crescent International ............. S........... 189,000
Inc.
Greater Pacific Foods.......... ............. S........... 24,000
Grimmway Enterprises, Inc...... ............. L........... 30,000
Groeb Farms, Inc............... ............. S........... 16,125
Guglielmo (Emilio) Winery...... ............. S........... 20,000
Gulf Pacific Rice Co., Inc..... ............. S........... 49,500
Hale Indian River Groves....... ............. L........... 25,000
Hansa-Pacific Associates, Inc.. ............. S........... 25,000
Hansen Beverage Company........ ............. S........... 85,000
Hansmann's Mills, Inc.......... ............. S........... 29,000
Harvest International Company.. ............. S........... 35,000
Hawaiian Sun Products.......... ............. S........... 20,000
Healthy Times.................. ............. S........... 27,000
Heaven Hill Distilleries, Inc.. ............. S........... 59,801
Heinz Pet Products............. ............. L........... 211,110
Henry Estate................... ............. S........... 6,000
Herman Goelitz, Inc............ ............. S........... 117,000
Herr Foods Inc................. ............. S........... 10,000
Hershey Foods Corporation...... ............. L........... 224,610
Heublein, Inc.................. ............. L........... 60,000
Hills Pet Nutrition, Inc....... ............. L........... 61,800
Homeland Fruit Company......... ............. S........... 20,000
Honee Bear Canning............. ............. S........... 50,000
Honway......................... ............. S........... 2,500
Hormel Foods................... ............. L........... 35,000
Hsu's Ginseng Enterprises, Inc. ............. S........... 90,000
Hudson Foods, Inc.............. ............. L........... 24,375
Hughson Nut Marketing, Inc..... ............. S........... 18,000
H.J. Heinz Company Ltd......... ............. L........... 50,000
H.K. Brewing Company, Ltd...... ............. S........... 25,000
Idahoan Foods.................. ............. S........... 150,000
Imagine Foods, Inc.,........... ............. S........... 100,000
Interfrost..................... ............. S........... 150,000
Inter-group Trade Services ............. S........... 100,000
Corp. (ITSC).
International American ............. S........... 470,000
Supermarkets.
International Food Concepts.... ............. S........... 150,000
International Grocers, Inc..... ............. S........... 40,000
International Industries ............. S........... 100,000
Corporation.
International Market Brands.... ............. S........... 229,000
International Marketing ............. S........... 50,000
Systems, Ltd.
International Multifoods ............. L........... 180,700
Corporation.
International Pet Products, Inc ............. S........... 108,000
Island Coffee Company.......... ............. L........... 15,000
Ital Florida Foods, Inc........ ............. S........... 12,000
I.M.G. Enterprise Inc./Cherry ............. S........... 45,000
Lake Farm.
J&J Snack Foods................ ............. S........... 18,000
Jack and Jill Ice Cream Company ............. S........... 150,000
Jardine Foods.................. ............. S........... 20,000
Jasper Wyman & Son............. ............. S........... 47,000
Jersey Asparagus Farms, Inc.... ............. S........... 8,500
Jewel Date Company............. ............. S........... 29,000
Jim Beam Brands Co............. ............. L........... 387,934
J-K Products International..... ............. S........... 15,000
Johnsonville Foods............. ............. L........... 9,750
Johnstown Bean Company......... ............. S........... 5,000
Jones Dairy Farm............... ............. L........... 64,000
Joseph E. Seagram & Sons, Inc.. ............. L........... 43,093
Joseph Gallo Farms............. ............. S........... 10,000
J.P. Sullivan & Company........ ............. S........... 6,000
Kal Kan Foods, Inc............. ............. S........... 30,000
Kalsec Inc..................... ............. S........... 11,640
Karly.......................... ............. S........... 3,000
Kashi Company.................. ............. S........... 11,000
Kautz Ironstone Vineyards...... ............. S........... 40,000
Kendall-Jackson Winery......... ............. S........... 15,000
Kenwood Vineyards.............. ............. S........... 8,000
Kidd & Company, Inc............ ............. S........... 134,000
King B Gourmet Foods........... ............. S........... 15,000
Knudsen & Sons, Inc............ ............. L........... 30,000
Korbel Brands.................. ............. S........... 45,977
Kozy Shack, Inc................ ............. S........... 192,500
KSM Seafood Corporation........ ............. S........... 85,000
Kwik Enterprises............... ............. S........... 20,000
La Tapatia Tortilleria, Inc.... ............. S........... 18,000
Lady-J, Inc.................... ............. S........... 40,000
Lafayette Foods................ ............. S........... 24,000
Lamex Foods, Inc............... ............. S........... 62,500
Land O'Lakes Food Ingredients ............. L........... 18,810
Division.
Laurel Glen Vineyard........... ............. S........... 2,500
Lawrence Foods, Inc............ ............. S........... 35,000
Leprino Foods.................. ............. S........... 9,000
Liberty Orchards Co., Inc...... ............. S........... 18,000
Lincoln Snacks Company......... ............. S........... 122,500
Little Lady Foods, Inc......... ............. S........... 77,500
Long Island Seafood Export..... ............. S........... 6,500
LP International............... ............. S........... 77,000
Lucks Food Decorating Co....... ............. S........... 100,000
Lucky States Trading Company... ............. S........... 15,000
Lyons Magnus................... ............. S........... 15,000
M&R Company.................... ............. S........... 18,000
Maker's Mark Distillery, Inc... ............. L........... 34,477
Mama Tish's Italian ............. S........... 28,500
Specialties, Inc.
Manna Pro Milk Products Inc.... ............. L........... 9,550
Maple Grove Farms of Vermont... ............. S........... 25,000
Maplehurst Genetics............ ............. S........... 4,000
Market Makers, Inc............. ............. S........... 150,000
Matanzas Creek Winery.......... ............. S........... 3,000
Matt Brewing Company........... ............. S........... 50,000
Maui Pineapple Company, Ltd.... ............. L........... 20,000
Mauna Loa Macadamia Nut Corp... ............. S........... 137,000
Mazda Trading Co., Inc......... ............. S........... 31,000
McFarland's Foods, Inc......... ............. S........... 20,000
McIlhenny Company.............. ............. S........... 190,000
Mederer Corporation............ ............. S........... 220,000
Merrick Petfoods, Inc.......... ............. S........... 40,000
Merrick's, Inc................. ............. S........... 19,859
Merryvale Vineyards............ ............. S........... 45,000
Mi Mama's Tortilla Factory, Inc ............. S........... 7,500
Midamar Corporation............ ............. S........... 34,500
Mid-America Dairymen, Inc...... ............. L........... 30,000
Midwestern Pet Foods, Inc...... ............. S........... 76,250
Milk Specialties Co............ ............. S........... 31,200
Milward Enterprises, Inc....... ............. S........... 30,000
Mission Foods.................. ............. L........... 15,000
Missouri Angus Association..... Y............ ............ 2,575
Mister Cookie Face............. ............. L........... 25,000
Molly's Foods, Inc............. ............. S........... 42,000
Mooney Farms................... ............. S........... 20,000
Morrison Farms................. ............. S........... 26,325
Motts International./Div. of ............. S........... 45,000
Cadbury Bev.
Mrs. Fields Inc................ ............. S........... 30,000
Mrs. Leeper's, Inc............. ............. S........... 20,000
Murphy-Goode Estate Winery..... ............. S........... 6,500
M&M/Mars, A Division Of Mars, ............. L........... 276,610
Inc.
Nabisco International Ltd...... ............. L........... 25,000
NAF International.............. ............. L........... 91,000
Nancy's Pies, Inc.............. ............. S........... 10,000
Nancy's Specialty Foods........ ............. S........... 79,000
National Raisin Co............. ............. S........... 20,000
Naturipe Berry Growers, Inc.... Y............ ............ 37,000
Nebraska Dairies............... ............. S........... 50,000
New Generations Dairy Cattle... ............. S........... 11,974
New Venture Development Corp... ............. S........... 40,000
Newman's Own Inc............... ............. L........... 91,500
Newton Vineyard................ ............. S........... 8,500
Norbest........................ ............. L........... 5,000
Norpac Foods................... Y............ ............ 118,000
Norpro, Inc.................... ............. S........... 25,000
Northeast Group................ ............. S........... 50,000
Northwest Packing Company...... ............. S........... 35,000
Nouveau International.......... ............. S........... 50,000
NupacInternational, Inc........ ............. S........... 80,000
Nutrilicious Foods............. ............. S........... 40,000
Ocean Spray Cranberries, Inc... Y............ ............ 338,534
Oceanica Trade & Investment, ............. S........... 17,000
Inc.
Oglesby Plant Laboratories, Inc ............. S........... 13,250
Old Salem Enterprises.......... ............. S........... 5,000
Ontario International, Inc..... ............. S........... 120,000
Oregon Potato Company.......... ............. S........... 22,000
Ore-Ida Foods.................. ............. L........... 30,895
Organic Food Products.......... ............. S........... 92,500
Organotech..................... ............. S........... 40,000
Orion Seafood International, ............. S........... 3,000
Inc.
Otis McAllister, Inc........... ............. S........... 40,000
PA Producers Research & Devlop. ............. S........... 19,500
Pace Foods, Ltd................ ............. S........... 55,000
Pacific Valley Foods........... ............. S........... 13,000
Pamela's Products.............. ............. S........... 10,000
Paramount Farms................ Y............ ............ 67,600
Pepperidge Farm Incorporated... ............. S........... 51,610
Pet Center Inc................. ............. S........... 5,500
Pet Products Plus, Inc......... ............. L........... 74,960
Pete's Brewing Company......... ............. S........... 40,000
Petrofsky's International, Ltd. ............. S........... 50,000
Phoenix Marketing.............. ............. S........... 35,000
Pierce Foods................... ............. L........... 37,375
Pindar Vineyards............... ............. S........... 3,000
Pines International............ ............. S........... 135,000
Pioneer Snacks, Inc............ ............. S........... 5,000
Plantation Sweets.............. ............. S........... 30,000
Pogue Industries, Inc.......... ............. S........... 25,000
Powerfood Inc.................. ............. S........... 150,000
Precise Pet Products........... ............. S........... 49,500
President Foods Ltd/GWB Foods.. ............. S........... 15,000
Presto Food Products, Inc...... ............. S........... 43,000
Prickly Pear Ranch............. ............. S........... 4,950
Prime Tanning Co., Inc......... ............. L........... 51,610
Primex......................... ............. S........... 57,678
Prince of Peace Enterprises, ............. S........... 101,000
Inc.
Pro Bar Products, Inc.......... ............. S........... 8,500
Pro Diet Pet Products.......... ............. S........... 19,650
Providence Bay Fish Company.... ............. S........... 2,500
Purity Foods International..... ............. S........... 200,000
Quady Winery................... ............. S........... 9,500
Quality Products Intl., Inc.... ............. L........... 22,500
Racke.......................... ............. L........... 7,500
Ralston Purina International... ............. L........... 213,310
Ramsey Popcorn Company, Inc.... ............. S........... 200,000
Raskas Foods, Inc.............. ............. S........... 17,500
Red River Commodities, Inc..... ............. L........... 9,900
Reily Dairy and Food Company... ............. S........... 15,000
Reimann Food Classics, Inc..... ............. S........... 15,000
Rhino Foods, Inc............... ............. S........... 7,500
Richland Beverage Corporation.. ............. S........... 25,000
Rim Export Consultants, LTD.... ............. S........... 18,200
Rio Del Mar Foods, Inc......... ............. S........... 40,000
River of Life.................. ............. S........... 5,000
Robert Mondavi Winery.......... ............. L........... 40,000
Rocco, Inc..................... ............. L........... 30,000
Rocking JC Southwest Foods..... ............. S........... 20,000
Rockingham Poultry............. ............. L........... 45,000
Rocky Mountain Popcorn Co...... ............. S........... 7,000
Roman Meal Company............. ............. S........... 108,000
Roney-Oatman................... ............. S........... 49,850
Round Hill Winery.............. ............. S........... 15,000
Royal Cake Company............. ............. S........... 5,000
Royal Pacific Foods............ ............. S........... 20,000
Royal Wine Company............. ............. S........... 130,000
Rubschlager Baking Corp........ ............. S........... 5,500
Rutherford Benchmarks, Inc..... ............. S........... 7,000
Sabroso Company................ ............. S........... 22,000
Safeway Inc.................... ............. L........... 11,000
Sahagian & Associates, Inc..... ............. S........... 10,000
Santa Cruz Valley Pecan Company ............. S........... 30,000
Sargento, Inc.................. ............. L........... 47,200
Schug Carneros Estate Winery... ............. S........... 17,000
Schwan's Food Asia Pte. Ltd.... ............. L........... 80,200
Sea and Farmfresh Importing ............. S........... 33,000
Company.
Sea Fresh USA.................. ............. S........... 4,800
Sea Watch International, Ltd... ............. L........... 35,239
Seafood Exchange Seoul, Inc.... ............. S........... 6,000
Seafood Export, Inc............ ............. S........... 30,325
Seald-Sweet Growers............ Y............ ............ 49,500
Select Sires................... ............. S........... 13,500
Sequoia Grove Vineyards........ ............. S........... 5,000
Servos International Trading ............. S........... 25,000
Co., Inc.
Shafer Vineyards............... ............. S........... 2,350
Shallowford Farms.............. ............. S........... 15,000
Shelf Stable Foods, Inc........ ............. S........... 80,000
Shurfine International......... ............. S........... 40,848
Sierra Nut Company............. ............. S........... 5,000
Sigco Sun Products, Inc........ ............. S........... 117,500
Simi Winery.................... ............. L........... 10,000
Simonian Fruit Co.............. ............. S........... 21,000
Simplot Meat Products, Inc..... ............. L........... 20,000
Simply Delicious, Inc.......... ............. S........... 25,000
Sinner Bros & Bresnahan........ ............. S........... 15,000
Sioux Honey Association........ Y............ ............ 32,235
Sire Power, Inc................ ............. S........... 9,500
Sk Food International.......... ............. S........... 17,750
SKIF Corporation............... ............. S........... 65,000
Smith Dairy Product Company.... ............. S........... 75,000
Snapple Beverage Corporation... ............. L........... 51,000
Snyder's of Hanover, Inc....... ............. S........... 50,000
South Georgia Farms............ ............. S........... 7,329
Southern Pride Catfish......... ............. L........... 20,000
Sovereign Trading Company...... ............. S........... 50,000
Spectrum Naturals Inc.......... ............. S........... 20,000
Stahlbush Island Farms......... ............. S........... 10,000
Stanley Orchards Sales, Inc.... ............. S........... 20,000
State Fish Company, Inc........ ............. S........... 10,000
Staton Hills................... ............. S........... 3,000
Ste. Chapelle.................. ............. S........... 3,000
Stimson Lane Vineyards......... ............. L........... 74,375
Stinson Seafood Company........ ............. S........... 28,000
Stockpot Soups................. ............. S........... 12,000
Stokes/Ellis Foods............. ............. S........... 20,000
Stonepoint..................... ............. S........... 50,000
Stonyfield Yogurt.............. ............. S........... 25,000
Stroh Brewery Co............... ............. S........... 51,610
Sturdy Pet Products, Inc....... ............. S........... 10,000
Sun Maid....................... Y............ ............ 170,648
Sun Pacific Enterprises........ ............. L........... 30,000
Sunday House Foods, Inc........ ............. L........... 7,500
Sungrow........................ ............. S........... 39,000
Sunkist Growers................ Y............ ............ 2,568,571
Sunny Ridge Farm............... ............. S........... 22,500
Sunsweet....................... Y............ ............ 859,800
Super Stores Industries........ ............. S........... 30,000
Supervalu International........ ............. L........... 15,000
Sutter Home Winery, Inc........ ............. S........... 117,500
Sweet Street Desserts, Inc..... ............. S........... 50,000
Syfo Beverage Company of Flor.. ............. S........... 25,000
SYSCO Food Services............ ............. L........... 5,000
S.B. Global Trading Co......... ............. S........... 80,000
Take 5......................... ............. S........... 25,000
Teeccino Caffe, Inc............ ............. S........... 12,000
Texas Best Authentic Food Pro.. ............. S........... 40,000
The California Winery.......... ............. S........... 79,500
The Figaro Company, Inc........ ............. S........... 10,000
The Great Western Tortilla ............. S........... 20,000
Company.
The Hain Food Group............ ............. S........... 50,000
TheIams Company................ ............. L........... 68,900
The Original Log Cabin Homes, ............. S........... 175,000
Ltd.
The Seagrams Classic Wine ............. L........... 125,000
Company.
Thompson's Pet Pasta Products.. ............. S........... 183,600
Timber Crest Farms............. ............. S........... 90,000
TKI Foods, Inc................. ............. S........... 200,000
Tootsie Roll Industries, Inc... ............. L........... 85,000
Tostino Coffee Roasters........ ............. S........... 20,000
Traditional Medicinals Inc..... ............. S........... 106,000
Transcon Trading Co., Inc...... ............. S........... 140,000
Tree Top, Inc.................. Y............ ............ 185,000
Triangle Products.............. ............. S........... 45,000
Tri-Valley Growers............. ............. L........... 206,000
TRT International.............. ............. S........... 50,000
Trundle & Company.............. ............. S........... 7,945
Tyson Foods.................... ............. L........... 690,000
T&K Pet Products............... ............. S........... 19,000
T. Marzetti Company............ ............. L........... 15,000
United Apple Sales, Inc........ ............. S........... 50,000
United States Bilateral Trade ............. S........... 25,000
Co.
U.S. Distilled Products Co..... ............. L........... 22,101
U.S. Foods & Pharmaceuticals, ............. S........... 130,000
Inc.
U.S. Grain Company............. ............. S........... 30,500
U.S. Mills, Inc................ ............. S........... 14,500
Valley Fig Growers............. Y............ ............ 45,000
Valley View Packing Company.... ............. S........... 40,000
Vanguard Trading Services, Inc. ............. S........... 100,000
Ventana Vineyards.............. ............. S........... 5,000
Vermont Speciality Meats, Inc.. ............. S........... 50,000
Vidalia Supreme................ ............. S........... 20,000
Vie de France Corp............. ............. L........... 30,000
Vienna Sausage Manufacturing Co ............. S........... 134,250
Virga's Pizza Crust of VA, Inc. ............. S........... 10,000
Vision Ostrich International... ............. S........... 49,500
Vogel Popcorn.................. ............. L........... 15,861
Wakefern Food Corporation...... ............. S........... 51,000
Walton & Post, Inc............. ............. S........... 25,000
Washington Beef................ ............. L........... 22,000
Welch Foods Inc., A Cooperative Y............ ............ 813,044
Well-Pict, Inc................. ............. S........... 22,000
Wenix International Corp....... ............. S........... 18,000
Wente Bros..................... ............. S........... 260,000
Western Export Services, Inc... ............. S........... 27,000
Western Family Foods, Inc...... ............. S........... 143,000
Wholesome & Hearty Foods, Inc.. ............. S........... 20,000
Widman Popcorn Company......... ............. S........... 26,375
Wild Rice Exchange............. ............. S........... 105,000
Wilkins-Rogers, Inc............ ............. S........... 7,000
Williamette Valley Vineyards... ............. S........... 4,000
Wilton Foods, Inc.............. ............. S........... 25,000
Wine Alliance.................. ............. L........... 10,000
Wine World Estates............. ............. L........... 15,000
Wines Of America, Ltd.......... ............. S........... 20,000
Wisconsin Enterprise Inc....... ............. S........... 185,000
Wolny & Associates Co.......... ............. S........... 40,000
Woltner Estates................ ............. S........... 4,500
World Finer Foods, Inc......... ............. S........... 200,000
World Source Inc............... ............. S........... 10,000
World Variety Produce, Inc..... ............. S........... 7,000
Worldwide Marketing Corporation ............. S........... 23,709
Worldwide Sires, Inc........... ............. S........... 44,083
Y S Trading Company............ ............. S........... 20,000
Yorkshire Dried Fruit & Nuts, ............. S........... 40,000
Inc.
Yorkville Cellars.............. ............. S........... 5,000
Yoshida Food Products.......... ............. S........... 85,000
Young Pecan Company............ ............. S........... 30,000
------------------------------------------------------------------------
Question. Please provide any documentation you have regarding
actual market gains that are a direct result of this program.
Answer. I will provide that information for the record.
[The information follows:]
[Clerk's note.--The information referred to does not appear in the
hearing record but is available for review in the subcommittee's
files.]
Question. Please provide any documentation you have regarding to
what extent non-coop companies which received MAP branded program
dollars and are of a size which exceeds the small business definition
made the decision to market products in a country only because they
received the MAP assistance?
Answer. We believe a substantial number of large companies have
explored opportunities in new markets as a result of receiving MAP
assistance, but we do not have documentation available to this effect
because program participants are not required to submit this type of
information to FAS. However, program participants are required to
certify that any Federal funds received will supplement, but not
supplant, any private or third party funds or other contributions to
program activities. Program participants must also maintain supporting
documentation which demonstrates why the participant is unlikely to
carry out activities without Federal financial assistance and make this
information available for audit.
section 11 reimbursements
Question. Since USDA is under the cap for section 11 transfers, why
are you asking for converting the Emerging Markets Technical Assistance
to discretionary sending?
Answer. The basis for proposing the change is that the nature of
the activities carried out under the Emerging Markets Program do not
relate directly to the primary mission of CCC, which is the
stabilization of farm prices and incomes and assisting in the
conservation of soil and water resources. Additionally. this proposal
is consistent with past actions to discontinue the use of CCC funds for
non-commodity price and income support activities, such as ASCS (now
FSA) salaries and expenses and funding transferred to FAS to support
the General Sales Manager's administrative expenses. Further, by making
this change, funding for the Emerging Markets Program will no longer be
subject to the section 11 transfer limitation and, thus, no longer have
to compete for funding against other high priority activities.
Question. Would you please explain in detail the need to move FAS
activities from CCC reimbursables to discretionary spending?
Answer. Provisions of the 1996 FAIR Act established a limitation on
CCC funding made available each year to other agencies through
reimbursable agreements. As a result, a number of priority activities
are competing for limited CCC resources. Shifting the Emerging Markets
Program and support of the CCC Computer Facility from mandatory to
discretionary spending provides for a larger base from which to fund
these activities. The 1998 budget does request an increase in funding
for FAS which will help to offset a portion of the costs of the
activities which will no longer be funded through CCC reimbursement.
Question. Or, do you simply intend to convert these activities to
mandatory funds subject to appropriations?
Answer. No, the President's budget ultimately proposes a permanent
shift of these activities from the mandatory to the discretionary
account.
export education
Question. As part of your effort to enhance export education with
potential U.S. exporters on the home front, you mention activities in
California, Colorado, Oregon, and Iowa. Are you also utilizing the work
of the Global Marketing Support Service at the University of Arkansas?
Answer. FAS recently contacted Dr. Preston Laferney of the
University of Arkansas, and we are currently exploring avenues to
utilize the Global Marketing Support Service. In addition, FAS is
actively working with Arkansas state agricultural officials and the
Southern U.S. Trade Association to alert Arkansas companies to overseas
trade opportunities and USDA export assistance programs. USDA will
continue to enhance export education of potential Arkansas exporters by
working with the University of Arkansas and trade related organizations
to ensure small, medium and new-to-export Arkansas companies have the
tools and information they need to capitalize on the growing export
market.
public law 480
Question. Explain why the reduction in the Public Law 480 program
level will have no effect on projected tonnage exported through those
programs?
Answer. The proposed $50 million total rescission in fiscal year
1997 appropriations for Public Law 480 Title I will affect projected
tonnages under that program. Commodity shipments will be reduced by
approximately 200,000 metric tons as a result of the proposed
rescission. However, allocations of Title I commodity assistance that
have already been announced for fiscal year 1997 will not be affected
by the proposed rescission because the reduction in program funding
will be taken from a reserve of unallocated funds and from unobligated
funds carried over from fiscal year 1996.
For 1998, while the budget includes a reduction in the Public Law
480 program level, we expect the overall tonnage level for the program
to remain unchanged from our revised estimate for 1997 because of lower
commodity price projections for next year.
Question. There is a pending rescission request relating to Public
Law 480 Title I due to carryover funds and a further reduction in
fiscal year 1998. Are the carryover funds not likely to be needed in
future years?
Answer. The decision to propose the $50.0 million Title I
rescission was based on the need to identify an offset for the
supplemental requests included in the budget, including one for the
Special Supplemental Nutrition Program for Women, Infants, and
Children. The reduction in program funding will be taken from
unallocated fiscal year 1997 funds totaling $24.6 million and
unobligated funds carried over from fiscal year 1996 totaling $32.9
million. Upon enactment of the rescission, just over $7 million will
remain in the ocean freight differential account for fiscal year 1997.
We believe this remaining reserve is needed to meet current programming
plans because the rate of ocean freight differential payments has been
increasing recently, leading to higher program costs.
Question. Is there not a likelihood that these funds could be
transferred to Title II?
Answer. By law, these funds could be transferred to Title II.
However, at this time we have no reason to believe that funding will be
inadequate for the Title II program this year. Nevertheless, we are
monitoring the situation in North Korea and Zaire very closely.
Developments in those countries could increase the need for emergency
food aid.
overseas operations
Question. Would allowing for 2-year money for overseas operations
provide ultimate savings?
Answer. A key advantage of this proposal is that unobligated
balances remaining at the end of a given fiscal year could be applied
toward offsetting the following fiscal year's operating costs. This
would be particularly true in the event that favorable foreign currency
fluctuations associated with overseas office operations created an
operating surplus. It is expected that savings in one year would offset
losses in others, as a result of currency exchange rate fluctuations.
Question. If so, how much?
Answer. Predicting any savings in advance is not possible.
Question. What other efficiencies would be realized by this move on
a programmatic basis?
Answer. This proposal eliminates the uncertainties associated with
forecasting overseas wage and prices increases and exchange rate
movements, and coupled with the proposed advance appropriation, would
ensure that only those funds necessary to offset these costs were
actually made available. Currently, accurately forecasting overseas
wage and prices adjustments is impossible given the long lead time
involved in the budget process. In some fiscal years, more funds were
appropriated for these costs than were necessary, in other fiscal
years, less.
rice/eu issues
Question. What steps are USDA taking to help bring consensus within
the U.S. rice industry to resolve the TRQ issue with the EU?
Answer. USDA continues to have an ongoing dialogue both with
individual companies and with industry associations. At the same time,
we are working with EU officials to ensure that, once we come up with a
workable system, imports can commence immediately.
cumulative recovery system
Question. What is the status of negotiations with the EU on the
rice Cumulative Recover System issue?
Answer. The Commission has drafted proposed regulations for both
the 4CRS and the malting barley TRQ. These proposals, both of which are
acceptable to U.S. industry, are scheduled to be voted on at the April
17 Grains Management Committee.
______
Question Submitted by Senator Kohl
dairy export incentive program
Question. Will the Dairy Export Incentive Program (DEIP) be
utilized in 1997 to the maximum extent allowed under the Uruguay Round
GATT Agreement? If not, why not, and how close will we come to full
funding for DEIP in 1997?
Answer. We feel that our current level of activity under DEIP is
moving the available dairy products to the international market without
causing undue disruption to our domestic markets. We do not project
reaching either the quantity or expenditure ceilings allowed under our
Uruguay Round commitments for the current year. The volume of activity
under the DEIP is a reflection of domestic availability and
international demand. With the exception of butterfat, current
allocations have been available since July 1996. However, almost 60
percent of our awards have occurred since January 1997. The tight
markets in the U.S. last summer and less than aggressive international
demand for the products that can be exported under the DEIP were
primary reasons for this limited activity. I will provide a table
showing the award totals and Uruguay Round ceilings.
[The information follows:]
DAIRY EXPORT INCENTIVE PROGRAM (DEIP)
[Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
Quantity (MT)-- Bonus value--
---------------------------------------------------
GATT GATT
Commodity Committed maximum Committed maximum
(from July (from July (from Oct (from Oct
1) 1) 1) 1)
----------------------------------------------------------------------------------------------------------------
Nonfat dry milk............................................. 39,024 100,222 $30,119 $113,388
Whole milk powder........................................... 1,540 9,971 1,510 11,503
Cheese...................................................... 1,384 3,669 839 4,999
Butterfat \1\............................................... 853 38,611 803 41,934
----------------------------------------------------------------------------------------------------------------
\1\ Includes butter, butteroil, anhydrous milkfat and ghee on a butter equivalent basis.
Note: Commitments are as of April 11, 1997. Quantity commitments are based on a July/June year and expenditure
commitments are based on an October/September year.
______
Risk Management Agency
Questions Submitted by Senator Cochran
salaries and expenses
Question. In a climate where other agencies in USDA are decreasing
administrative and operating expenses, your projected available funds
and staff years for 1998 for the Risk Management Agency and the Federal
Crop Insurance Corporation actually increase. Why do you estimate an
increased need in funds available and staff years for 1998?
Answer. The requirements of the Federal Crop Insurance Reform Act--
the Act--and the Federal Agriculture Improvement and Reform Act of
1996--the 1996 Act--drastically increased the workload required of the
Risk Management Agency--RMA--to support FCIC's existing programs, crop
expansion, continuing changes to overall program requirements, and the
increased emphasis on new crop program development. For example, the
implementation of catastrophic risk protection coverage increased the
number of policies sold from 800,000 in 1994 to 1.6 million in 1996. In
addition, the 1996 Act provided for the establishment of a Risk
Management Education program to provide education on risk management
strategies, including futures and options trading and insurance
protection programs, and to educate producers of the financial risks
inherent in the production and marketing of agricultural commodities.
The 1996 Act also transferred to RMA responsibility for the Options
Pilot Program.
Due to increasing expansion of program coverage resulting from the
1996 Act, the need for greater compliance has grown. Greater reliance
on private insurance company delivery based on the Standard Reinsurance
Agreement has generated increased Compliance workload in the form of
additional Hotline complaints, support investigations, support of
regulatory functions of the current insurance program, and upgraded
program operations. In addition, the increased reliance of farmers on
crop insurance as a result of the 1996 Act has led to much greater
demand to expand crop insurance to new crops and new products. Our
resources are stretched thin at our current rate of expansion, and we
will not be able to accelerate this expansion to the rate demanded
without additional resources.
Question. How has the agency conformed to the provision in the 1994
Crop Insurance Reform Act which states, ``the Board shall alter program
procedures and administrative requirements in order to reduce the
administrative and operating costs of approved insurance providers and
agents in an amount that corresponds to any reduction in the
reimbursement rate required * * * during the 5-year period * * * ?''
Has the reimbursement rate decreased, and if so, how much?
Answer. Yes, FCIC has decreased the expense reimbursement rate as
mandated in the Reform Act. For the 1997 reinsurance year, the rate was
decreased from 31 percent to 29 percent. Under current law, the
reimbursement rate will decrease at least to 28 percent in 1998 and
decrease again in 1999 to 27.5 percent. However, we recognize that the
rate may be too high and are proposing that the statutory ceiling on
delivery expenses be reduced from 28 percent to 24.5 percent.
RMA also continues to seek ways to simplify the delivery of crop
insurance to satisfy this mandate of the Reform Act--reducing
administrative expenses. Suggestions were solicited from participating
companies and all other interested parties via a Federal Register
notice. Twenty-nine actions have been completed since passage of the
Crop Insurance Reform Act--a few examples follow: actuarial documents
have been restructured, which reduced the number of pages printed each
year by one-third, or approximately two million; combined forms have
been approved which allow the company to reduce the number of times
that they must contact the farmer; type and practice codes have been
standardized and simplified; and the basic crop insurance computer
system called RAS/DAS, was analyzed to assure that it contained no
unnecessary or redundant data requirements. Ten actions are still in
progress and four more are currently being evaluated. Consultations
with industry will continue on this important issue.
Question. The Administration has proposed legislation which will
only reduce the amount needed to fund the sales commissions paid to
reinsured companies from $202 to $150 million. How does the
Administration propose to fund the remaining $150 million?
Answer. The delivery expense of reinsured companies has been paid
from the mandatory side of the budget for 1995, 1996 and 1997. For
1998, part of the delivery expenses are to be paid from the
discretionary side of the budget as part of a statutory compromise
reached in the Federal Crop Insurance Reform Act of 1994. We are
proposing that this amount be $150 million and that it be provided for
delivery expenses in general rather than designated specifically for
sales commissions. The $150 million is included in the President's
request for funding under the 1998 Appropriations Act.
Question. What will happen under current law to the crop insurance
program if the Committee is unable to provide full funding requested
for the sales commissions paid to reinsured companies?
Answer. As described above, RMA specifically proposed that the $150
million be appropriated for expense reimbursement generally, so the
companies could determine how to allocate the mandatory and
discretionary funds they receive as they see fit. Since the Federal
Crop Insurance Act of 1980, delivery of the crop insurance program has
been through private companies.
RMA and the Department are committed to the private delivery of
crop insurance. We believe in the private delivery system and its
ability to broaden the available safety net to farmers. Insurance
agents are knowledgeable about the crop insurance products and have
made extra efforts to provide producers with access to other lines of
insurance and non-insurance risk management tools. We strongly urge
that $150 million be appropriated.
Question. The Administration's fiscal year 1998 request proposes
increases in: pay costs for the Office of the Administrator; pay costs
and staff years for research and development activities; pay costs and
staff years for the insurance services division; pay costs for program
support; pay costs and staff years for risk compliance; and, $202
million for sales commissions paid to reinsured companies.
How does the Administration justify these requested increases for
pay costs and staff years when the program is in jeopardy if the $202
million requested for sales commissions paid to reinsured companies is
not funded?
Answer. In our proposal, RMA would be absorbing fifty percent of
the combined anticipated pay raise in fiscal year 1998 and the
annualization of the fiscal year 1997 pay raise as required by the
Department. Therefore, the increase for pay costs for the Agency is
only half of what would be needed to fund the pay costs of agency
personnel currently on-board working in support of the crop insurance
program. Due to the legislation of the past several years, the workload
has increased to implement new programs which are of service to the
producers, review existing programs and rates/coverages, assure
compliance with the policies and from the private insurance companies,
and provide risk management education to producers on forward
contracting, futures and options trading, and other risk management
tools. All of these programs need personnel to produce the desired
results expected from Congress and the nation's producers.
Question. The current crop insurance regulations state, ``if there
are insufficient funds appropriated by the Congress to deliver the crop
insurance program, the policy will automatically terminate without
liability.'' Who makes the determination of ``insufficient funds''
which will trigger this provision?
Answer. Pending the degree to which funds are not fully available,
several parties including companies and the Administration must make
such a determination. If partial funding is available, the
Administration must decide if the program can be delivered in a manner
acceptable to farmers and with little confusion or program
vulnerabilities. Companies must decide if they can deliver the product
adequately and compliant with program standards for the funds
reimbursed. Each must make their determination based on the amount of
available funds and the timing of when such funds become available. If
program funds are not at adequate levels, producers could find
themselves without insurance after they have made many key management
decisions.
Question. Has a determination been made for fiscal year 1998? What
is the level of ``insufficient funds'' which will trigger this
provision?
Answer. Such a decision has not been made for fiscal year 1998. The
Administrations budget proposal is the only basis at this time upon
which to make such a determination, and that proposal results in
adequate funding, although some insurance providers may disagree. Until
actual funding is made known, estimating levels to trigger the policy
provision would only be conjecture.
Question. In your prepared statement, you state that under the
Administration's proposal regarding the administrative expenses paid to
the reinsured companies that an additional $10 million in
administrative reimbursements to reinsured companies would be required.
Please explain why this increase is required and is it netted out of
the $53 million which the budget indicates would be saved by the
Administration's legislative proposal?
Answer. Under the current Standard Reinsurance Agreement, FCIC has
authorized a higher rate of compensation for expense reimbursement to
private insurance companies for increased sales of CRC policies, which
is estimated as a $10 million increase in administrative expense
reimbursement. Since we anticipate a 5 percent increase in sales of
revenue products and a shift from current yield-based coverage
products, we expect that costs to administer the programs will
increase.
To offset the increase in these costs in the discretionary portion
of RMA's budget, we are proposing the reduction of expense
reimbursement rates paid to private insurance companies.
Question. The Administration is proposing legislative changes to
reduce the reimbursement rate for delivery expenses, which I understand
would lower the discretionary requirement rate from $203 million to
$150 million. It is also proposing to make a portion of the overall
reimbursement rate, not just the sales commission portion,
discretionary and subject to appropriations. In your prepared statement
you state that in order to be cost neutral in providing revenue
insurance nationwide, the reimbursement rate used to determine
administrative expenses paid to reinsured companies will be reduced. Is
this reduction in the reimbursement rate the same as required by
current law over a 5-year period?
Answer. No, under current law, the targeted reimbursement rate for
1998 is 28 percent and for 1999 and beyond, 27.5 percent. The
Department's proposal does not specify a particular amount to be paid
for sales commissions but reduces the overall reimbursement rate used
to determine administrative expenses paid to the private insurance
companies. This proposal would lower the reimbursement rate from 28
percent of premiums sold for multiple-peril crop insurance to 24.5
percent in 1998 and 24.25 percent in 1999 and beyond. The proposal
specifies that 10.5 percentage points of the proposed rate be
considered discretionary spending. This proposal achieves a reduction
in discretionary spending of $53 million from current law to $150
million for 1998.
Question. How is this proposal to reduce the reimbursement rate
connected to the Administrative's proposal that will result in an
estimated increase of $10 million for administrative reimbursements to
reinsured companies?
Answer. The estimated increase of $10 million for administrative
reimbursements to reinsured companies results from the expected
increase in business from nationwide expansion of revenue products. The
proposal to reduce the administrative expense reimbursement rate will
provide an estimated savings of $53 million in delivery expenses and is
not related to the expansion of revenue products.
expansion of crop revenue insurance plan
Question. In January 1997 the Federal Crop Insurance Corporation
Board of Directors approved an expansion of crop revenue coverage on
corn and soybeans while adding new programs on spring wheat, grain
sorghum, and cotton. (Senator Lugar has been very vocal about the
anticipated high costs of expanding this program.) Does USDA have the
authority under the Crop Insurance Act to expand the pilot program?
Answer. The Department does have authority to expand CRC on a
nationwide basis because it was sponsored by a private insurance
company under Section 508(h) of the Act. FCIC does not have authority
to offer its own revenue products on a nationwide basis but is
requesting an amendment to the FCIC Act which will authorize such.
Question. What is the estimated cost to extend this pilot program
nationwide?
Answer. Most of the additional cost is expected due to greater
participation induced by products that better meet producers' needs
than does the standard yield-based coverage. To date, subsidies have
been limited to the amount that would be paid if the producer had
purchased the Actual Production History--APH--coverage plan. This cost
generally is less than the APH plan for IP and RA. For CRC, the cost of
the producer premium subsidy is the same as the APH plan, and an
average of 9 percent extra is paid for administrative and operating
expenses on the portion of the CRC premium that exceeds the premium
that would have been paid under the APH plan. In general, the
reimbursement to reinsured companies is 6-12 percent greater for CRC
policies than for policies sold under the APH plan.
The cost thus depends upon several factors: the increase in total
participation and the mix of products that producers purchase. Higher
sales of CRC will increase costs; greater market penetration by
products such as IP and RA will reduce costs.
For the purpose of the budget, FCIC assumed an increase in total
participation on the order of 5 percent. It further assumed that most
of the increase would be in CRC. To offset the costs associated with
these assumptions, FCIC proposed that the statutory loss ratio target
be reduced and made other program modifications. A part of the cost is
offset by changes in other mandatory programs. The proposal is budget
neutral.
Question. What portion of the $203 million fiscal year 1998 request
for administrative costs is related to this expansion of the pilot
program?
Answer. None. The $203 million estimate in the fiscal year 1998
President's Budget only reflects current law. Current law does not
authorize a Federal nationwide revenue insurance program. The
additional cost for CRC in 1998 under current law is estimated to be
$10 million.
Question. When does the Agency plan to expand this program and
offer it to producers?
Answer. There has been great demand for increased availability of
the revenue insurance concept, and the Administration is seeking
legislative authority to offer revenue insurance nationwide. Presently,
the Federal Crop Insurance Act authorizes only a pilot program of
revenue insurance under direct Federal sponsorship. The plan or plans
that may be offered are not yet known. Presumably, CRC would be one
such plan. However, it probably does not meet the needs of all
producers. Thus, some alternative plans may be needed such as Income
Protection--IP--or Revenue Assurance--RA.
FCIC has recently received a submission from the private company
that developed CRC to expand wheat to 25 additional states and to
expand to all counties in states that have previously been approved for
only certain counties. FCIC will continue to review and consider for
approval, products or product expansions as they are received from the
private industry. If approved, consideration will be given to the
timing that will allow for the orderly implementation in a way that
provides ample opportunity for sales to producers.
Question. What has been the participation rate in this pilot
program?
Answer. The Federal Crop Insurance Corporation developed the Income
Protection--IP--Plan of Insurance. For the 1996 crop year, IP was
available for corn, cotton, and spring wheat in 30 counties. For 1996,
about 998 IP policies were purchased, covering about 218,000 net acres
with total premiums of about $3.4 million. For the 1997 crop year the
IP pilot program was expanded and is available for corn, cotton, grain
sorghum, soybeans, spring wheat, and winter wheat in 159 counties. Data
for the 1997 crop year will not be available until late in the calender
year.
Under the authority of the Act, FCIC approved the CRC and Revenue
Assurance plans developed by the private sector. For the 1996 crop
year, CRC was available for corn and soybeans for all Iowa and Nebraska
counties. For 1996, about 91,000 CRC policies were purchased, covering
about 11.3 million net acres, with total premiums of about $141.0
million. For the 1997 crop year, the availability of CRC for corn and
soybeans includes all counties in the States of Colorado--corn only,
Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri,
Nebraska, Ohio, Oklahoma, South Dakota, and Texas. In addition, for the
1997 crop year, CRC was made available for:
Cotton
Arizona--all counties
Georgia--all counties
Oklahoma--all counties
Texas--selected counties
Grain sorghum
Colorado--all counties
Nebraska--all counties
Oklahoma--all counties
Kansas--selected counties
Missouri--selected counties
South Dakota--selected counties
Spring wheat
Minnesota--all counties
Montana--selected counties
North Dakota--selected counties
Winter wheat
Kansas--all counties
Michigan--all counties
Nebraska--all counties
South Dakota--all counties
Texas--all counties
Washington--selected counties
FCIC approved the RA plan of insurance for corn and soybeans in all
Iowa counties for the 1997 crop year. CRC and RA plans of insurance
will only be available in counties if an existing multiple peril crop
insurance program is also available for the crop.
Question. As a result of weather, adverse growing conditions, etc.,
what are the estimated losses as a result of farmers participating in
this program?
Answer. As of April 8, 1997, reinsured companies had reported
losses of $47.3 million for Crop Revenue Coverage for corn and soybeans
in Iowa and Nebraska. The overall program loss ratio was 0.34. Losses
paid to producers of corn and soybeans in Iowa and Nebraska who
purchased coverage other than catastrophic under the Actual Production
History yield-based plan had been paid $26.8 million, for a loss ratio
of 0.26. By this time, reporting of losses normally is over 95 percent
completed.
On that same date, losses of $55 thousand and $178 thousand had
been reported for corn and wheat, respectively, under the Income
Protection coverage plan. The respective loss ratios were 0.07 and
0.13. No losses had been reported for cotton under this revenue
insurance plan. Since Income Protection is sold only in specific
counties and not entire states, a comparable loss ratio for the APH
coverage plan is not readily available.
Question. Some farmers have expressed concern that no ``safety
net'' exists for those that can't afford crop insurance or that no crop
insurance coverage exists for a specific crop. Is there some way to
address this concern?
Answer. Free catastrophic insurance coverage--50 percent yield
coverage indemnified at 60 percent of the maximum price--is available
wherever crop insurance is offered. Producers are responsible for a
minor $50 processing fee for each crop. The fee is waived in instances
when limited resource producers cannot afford to pay it. Other
alternative programs, such as the Group Risk Plan, provide low cost
coverage alternatives in many areas. Where crop insurance is not
available for a crop, the Noninsured Assistance Program provides
coverage equivalent to catastrophic insurance coverage at no charge
when an area suffers a widespread loss.
crop insurance for specialty crops
Question. In the past pilot programs have been directed and pursued
for crop insurance alternatives, especially for ``specialty crops'' in
which the standard coverage was not viable. Such policies have been
suggested for peaches, pecans, citrus, nursery crops, etc. Which crops
are currently participating in a pilot program and what is the status
of each of them?
Answer. Specialty crops that are currently participating in a pilot
program and their status is as follows:
Apple Scab Integrated Pest Management Pilot Project.--This pilot
program was conducted during the 1996 crop year and is currently being
evaluated to determine its success. This program provided insurance
protection to apple growers participating in an apple scab Integrated
Pest Management--IPM--demonstration project. The University of Vermont
and the University of New Hampshire jointly conducted the project to
demonstrate the effectiveness of IPM procedures for the control of
apple scab.
The pilot program provided protection for quality losses due to
scab on apples that, had it not been for apple scab damage, would have
been marketable as fresh market U.S. Fancy or Extra Fancy apples. The
protection against apple scab quality losses required an endorsement to
the existing policy since that policy does not protect against quality
or production losses due to disease or insects that could have been
controlled. Producers desiring this optional coverage were required to
carry an available level of additional coverage Actual Production
History (APH) insurance coverage on their apples along with the apple
scab endorsement.
Support for this IPM demonstration project is consistent with the
shared goal of USDA and Congress to facilitate producers' movement to
sustainable farming practices.
Avocados.--An avocado pilot revenue program has been established
for the 1998, 1999, and 2000 crop years for Ventura County, California.
This program is being tested as an adaptation of the Income Protection
program to a specialty crop for which revenue has not previously been
insured. Plans are in place to initiate a pilot program to protect
against almond revenue losses beginning the 1998 crop year. The almond
insurance program has been in place more than fifteen years and
provides protection only for production losses.
Blueberries.--An Actual Production History (APH) based blueberry
pilot program was established for the 1995 and 1996 crop years, and
expanded for the 1997 and 1998 crop years. The pilot program is
presently available in two counties in Maine, two counties in Michigan,
eight counties in Mississippi, two counties in New Jersey, and one
county in North Carolina.
Canola/Rapeseed.--An Actual Production History (APH) based canola
pilot program was established for the 1995 crop year and expanded for
the 1997 and 1998 crop years, and is available in sixteen counties.
The pilot program is available for spring-seeded canola in the
following counties: Lewis, Idaho; Kittson, and Roseau, Minnesota;
Glacier, Montana; Bottineau, Cavalier, Pierce, Ramsey, Rolette and
Towner, North Dakota; Whitman, Washington.
The pilot program is available for fall-seeded canola in the
following counties: Baker, Calhoun, and Early, Georgia.
The pilot program is available for spring-seeded and fall-seeded
high oleic canola and fall-seeded high euricic Rapeseed in the
following Pacific Northwest counties: Latah, Idaho; and Umatilla,
Oregon.
Florida Fruit Trees.--A Florida fruit tree pilot program was
established for the 1996, 1997, and 1998 crop years to protect grove
owners for replacement or rehabilitation of trees damaged by freeze,
wind, or excess moisture. The insurable tree types include all citrus
and the following tropical fruit trees: avocado, carambola, and mango.
The pilot program is available in the following five Florida counties:
Dade, Highlands, Martin, Palm Beach, and Polk. The insured crops vary
by county.
Millet.--A millet pilot program was established for the 1996, 1997,
and 1998 crop years for the following five counties: Logan, Colorado;
Cheyenne and Deuel Counties, Nebraska; Dickey, North Dakota; and
Bennett, South Dakota. Production records, grower interest, and Risk
Management Agency Regional Service Office recommendations were used to
select the pilot counties. The millet pilot program is an Actual
Production History plan of multiple peril crop insurance. A detailed
description of these and other pilot programs is available through the
Risk Management Agency's Research and Evaluation Division Internet home
page at http://www.act.fcic.usda.gov/research. This web site also
contains feasibility studies and/or executive summaries of feasibility
studies conducted to determine the feasibility of developing risk
management programs for specific crops, most of which are considered
specialty crops.
Question. Have any of these pilot programs been successful?
Answer. The following descriptions of the outcome/status of the
pilot programs.
Apple Scab IPM Pilot Program.--Although the Apple Scab IPM Pilot
Program evaluation is not completed, the program appears to have served
its purpose for the small number of growers who participated. The pilot
program evaluation will assess the relative success of the program and
its applicability to other areas and crops.
Avocado Pilot Program.--It is too early to determine the success of
the avocado pilot program.
Blueberry Pilot Program.--Although the blueberry pilot program
evaluation is not completed, it appears that the program has been a
success, and plans are in place to convert the program to permanent
status beginning the 1999 crop year. About 300 polices reported premium
mostly at the CAT (50/60) level. Canola/Rapeseed Pilot Program--
Although the canola pilot program evaluation is not completed, it
appears that the program has been a success, and plans are in place to
convert the program to permanent status beginning the 1999 crop year.
Over 2,000 policies reported premium, mostly at the additional coverage
levels.
Florida Fruit Tree Pilot Program.--This pilot program is just into
the second year of its 3-year expected duration, and the pilot program
evaluation is expected to be completed in April 1998. Approximately
1,200 policies were purchased in the 1996 crop year, mostly at the CAT
(50/60) level.
Millet Pilot Program.--The millet pilot program is just beginning
its second year of its 3-year expected duration, and the millet pilot
program evaluation is expected to be completed in July 1998.
Approximately 1,700 policies were purchased in the 1996 crop year,
mostly at additional coverage levels.
Question. The Federal Crop Insurance Reform Act of 1994 created the
position of ``Specialty Crops Coordinator.'' This position was created
to serve as a liaison between producers and the agency. Has this
position been filled? If yes, then who has been selected to fill this
position?
Answer. The Specialty Crops Coordinator position was filled in
March 1996 by William C. (Bill) Jones after the previous Specialty
Crops Coordinator, Dr. Floyd F. Niernberger, retired in January 1996.
Mr. Jones, a native from McLean County, Illinois, began his Federal
civilian career with the Federal Crop Insurance Corporation in 1968,
and has served in numerous positions within the agency. Although raised
on a grain, livestock, and dairy farm in Central Illinois, Mr. Jones
has owned and operated a small fruit and vegetable farm in the Kansas
City area for 15 years, growing, wholesaling, and retailing a variety
of specialty crops.
Question. What actions have the agency taken to address the
insurance needs of specialty crops?
Answer. The agency has taken a number of actions to address the
insurance needs of specialty crops. Major actions that have been taken
in addition to developing the pilot programs for specialty crops
identified above are as follows.
--The agency published ``Data Collection Guidelines to Be Used in
Formulating New Crop Insurance Policies'' in the Federal
Register on April 14, 1995, to advise interested parties of
FCIC's guidelines for data collection to assist the Corporation
in researching the feasibility of formulating crop insurance
policies for new crops.
--On July 12, 1995, ``Notice of Specialty Crops Research Studies''
was printed in the Federal Register, naming the specialty crops
for which research reports were being prepared and soliciting
proposals from interested parties of additional crops or
comments on the crops named. Representatives of the agency had
speaking engagements with grower groups and commodity
associations to communicate the agency's new and specialty
crops program expansion efforts.
--The agency has developed a Summary of New Program Development Data
Requirements to be provided to specialty crops growers and
commodity associations to enable them to better understand the
data needed to develop a new program, and to enable them to
assist in the data-gathering process to facilitate expansion
efforts.
--The agency contracted research with the Economic Research Service
(ERS) to determine the feasibility of insuring various new and
specialty crops. These feasibility studies represent one
component in the process of developing risk management products
for specialty crops. To date, 49 such projects have been
undertaken.
--The agency has made available its New Program Development Handbook,
Summary of New Program Development Data Requirements, and
information regarding various feasibility studies and pilot
programs through the agency's Research and Evaluation Division
Internet web site at http://www.act. fcic.usda.gov/research.
--In August 1996, the agency's Research and Evaluation Division
conducted an intensive New Program Development Training session
for representatives from the ten Risk Management Agency
Regional Service Offices and Washington, D.C. The expected
outcome of this training was greater involvement in project
management at the field level and maximum utilization of
resources throughout the agency in the development of new
programs.
--The agency is conducting a joint research project between the
University of Maine, the Extension Service, and RMA's Research
and Evaluation Division to investigate the feasibility of
offering a crop insurance program designed to meet the needs of
specialized producers of vegetables and other perishable crops
who market through direct marketing channels.
--The agency is expanding the coverage of existing specialty crops
programs to new areas and new producers. As an example, the
apple insurance program was expanded for the 1996 and 1997 crop
years into 16 additional counties in six states. Additionally,
written agreements are being accepted for producers of
currently-insured crops in counties where the program is not
available.
Pilot programs are in various stages of development for the
following specialty crops:
Almond Revenue Pilot Program.--A pilot program offering almond
revenue protection as an alternative to the current production
protection program is being considered for implementation in
California.
Pecan Revenue Pilot Program.--A pilot program offering pecan
growers protection against unavoidable loss of revenue is being
considered for implementation beginning the 1998 crop year.
Sweet Potato Pilot Program.--A pilot program offering growers
protection against unavoidable loss of production is being considered
for implementation beginning the 1998 crop year in a number of states
and counties.
Turfgrass Sod Pilot Program.--A pilot program offering growers
protection against unavoidable losses to their sod inventory is being
considered for implementation beginning the 1999 crop year. The
turfgrass sod industry trade group will be presenting the proposed
policy to its membership at their annual meeting in June.
Wild Rice Pilot Program.--A pilot program offering growers
protection against unavoidable loss of production is being considered
for implementation beginning the 1999 crop year in Minnesota and
California.
Christmas Tree Pilot Program.--A pilot program offering growers
protection against unavoidable losses is being considered for
implementation beginning the 1999 crop year.
Direct Market Perishable Crops Pilot Program.--A pilot program
offering growers protection against unavoidable loss of revenue is
being considered for implementation beginning the 1999 crop year.
Aquaculture Pilot Program.--A pilot program offering growers
protection against unavoidable losses is being considered for
implementation beginning the 1999 crop year.
Peach Income Protection (IP) Pilot Program.--A pilot program
offering peach growers protection against unavoidable revenue losses is
being considered for implementation beginning the 1999 crop year.
Potato Income Protection (IP) Pilot Program.--A pilot program
offering potato growers protection against unavoidable revenue losses
is being considered for implementation beginning the 1999 crop year.
Nursery Program.--The current nursery program is being considered
for redesign to provide broader protection than is currently available.
Significant pilot program development activity is taking place for
the following specialty crops during 1997 and 1998: Cane Berries--
Brambles; Melons; Snap Beans--Fresh Market; Squash; Artichokes;
Cabbage; Chili Peppers; Citrus Fruit--Alternative to current programs;
Cucumbers; and Sesame. This may result in such pilot programs being
initiated in the 2000 crop year, depending upon the model used, data
and resources available, and other factors.
Question. Are any special initiatives being pursued and what are
they?
Answer. Without intending to single out any projects as more
significant or of higher priority than the others, the direct market
perishable crops program and aquaculture program would probably qualify
as much as any others as ``special initiatives'' in that they probably
have the greatest potential to be significantly different from any
other programs available or being developed.
______
Questions Submitted by Senator Bumpers
crop revenue coverage
Question. How much would it cost to expand Crop Revenue Coverage
(CRC) nationwide in terms of indemnities, reimbursements to private
companies, and administrative costs?
Answer. Most of the additional cost expected is due to greater
participation induced by products that better meet producers' needs
than does the standard yield-based coverage. To date, subsidies have
been limited to the amount that would be paid if the producer had
purchased the Actual Production History--APH coverage plan. This cost
generally is less than the APH plan for IP and RA. For CRC, the cost of
the producer premium subsidy is the same as the APH plan, and an
average of 9 percent extra is paid for administrative and operating
expenses on the portion of the CRC premium that exceeds the premium
that would have been paid under the APH plan. In general, the
reimbursement to reinsured companies is 6-12 percent greater for CRC
policies than for policies sold under the APH plan.
The cost thus depends upon several factors: the increase in total
participation and the mix of products that producers purchase. Higher
sales of CRC will increase costs; greater market penetration by
products such as IP and RA will reduce costs.
For the purpose of the budget, FCIC assumed an increase in total
participation on the order of 5 percent. It further assumed that most
of the increase would be in CRC. To offset the costs associated with
these assumptions, FCIC proposed that the statutory loss ratio target
be reduced and made other program modifications. A part of the costs is
offset by changes in other mandatory programs. The proposal is budget
neutral.
Question. How do those costs, in addition to the Non-insured
Assistance Program (NAP) administered by FSA, compare with the average
of ad hoc disaster programs provided over the past ten years?
Answer. As stated above, the cost of expanding CRC depends upon
several factors including the increase in total participation and the
mix of products that producers purchase. It is impossible at such an
early stage of the expansion to make a meaningful comparison between
the cost of CRC expansion and the cost of other ad hoc disaster
programs and NAP. We can however, provide you with the average cost of
disaster payments for fiscal years 1987 through 1996, as provided by
the Commodity Credit Corporation, which is $1,034,082,200. Furthermore,
as of April 3, 1997, the cumulative NAP payments for 1996 were
$35,709,127 and $26,851,144 for 1995.
Question. Please explain how you plan to make full coverage for CRC
revenue-neutral?
Answer. The major additional expense arises from expectations of an
increase in overall program participation. The mandatory costs
associated with this increase are to be offset by a reduction in the
legislated target loss ratio from 1.10 to 1.085 in 1998 and 1.075 to
1.060 beginning in the year 1999. Savings from other mandatory programs
also are to be credited. The discretionary costs associated with this
increase are to be offset by a reduction in the rate of reimbursement
for delivery expenses.
Question. Since the NAP program is designed as a risk management
tool, why has it not been consolidated with the other risk management
programs of your agency?
Answer. The Department of Agriculture Reorganization Act of 1994
was amended on April 4, 1996, by the Federal Agriculture Improvement
and Reform Act of 1996. The 1996 Act required the Secretary to
establish an independent agency to supervise the Federal Crop Insurance
Corporation activities. The Farm Service Agency (FSA) administers a
variety of activities and in the 1996 Act Congress retained NAP
functional activities under the administration of FSA. RMA and FSA do
coordinate in the collection of yield and price data on NAP crops and
that information is helpful when establishing new insurance programs on
those previously noninsured crops.
reimbursements to private companies
Question. On page 12 of Secretary Smith's statement, he mentions a
reduction in the discretionary amount for delivery expenses from $203
million to $150 million. In the next sentence, he states, ``Further,
our proposal would make a portion of the overall reimbursement rate
discretionary and subject to appropriations whereas current laws treat
only the sales commissions portion of the reimbursement as
discretionary.'' Is it not the case that the reimbursement for delivery
expenses, the amount you recommend dropping to $150 million is the only
discretionary item relating to company reimbursements. Would you please
clarify the statement I have quoted which sounds as though there is a
further discretionary item?
Answer. In our proposal, we tried to be fair to the agents and to
avoid having to tell the insurance companies how much they would be
allowed to pay their agents. As you know, sales commissions have been
paid out of the FCIC Fund, which is a mandatory spending account
although still subject to appropriation. However, current law requires
that they be treated as discretionary spending beginning in 1998.
Our proposal recognizes that the delivery expenses paid, in total
not just sales commissions, may have been too high. Consequently, we
are proposing that the statutory ceiling on delivery expenses be
reduced from 28 percent to 24.5 percent of the premium on multi-peril
coverage, which applies to production risks. For revenue insurance,
which has a higher premium because it applies to price as well as
production risks, the rate will be somewhat less, but the amount will
be at least as much as the amount paid on multi-peril coverage. We
estimate that delivery expenses under our proposal would be $417
million, compared to $460 million under current law, which is a savings
of $43 million, net of about $10 million in additional cost for an
increase in business.
As mentioned earlier, while we wanted to reduce delivery expenses,
we did not want agents to have to bear more than a fair share of the
reduction. We wanted this to be a matter of negotiation between the
agents and their companies, without our getting into the matter. So our
proposal provides for eliminating the distinction in current law that
subjects only the sales commission portion of delivery expenses to
discretionary spending ceilings.
Question. If you reduce the loss ratio used to establish the
premium rates structure, what effect will that have on participation?
At some point will farmers not feel the cost of the program exceeds the
benefits leaving only the more ``loss-prone'' farmers in the programs?
Answer. RMA is not aware of any studies that reliably estimate the
price elasticity of demand for crop insurance. Hence, any assessments
about the effect of a change in the statutory loss ratio target can
only be conjectural. The proposed reduction in the loss ratio, from
1.10 to 1.085 in 1998 and from 1.075 to 1.060 in 1999, infers a need to
increase premium income by 1.4 percent in each year. This is a
relatively modest amount that should not impact participation greatly.
Annual changes in price elections cause a greater change in premium
costs to producers.
The crop insurance program of today offers many options to
producers that enable them to better target their risk management
strategies with the price they are willing to pay. There are new
products and new coverage levels compared to even the recent 1995 crop
year. There is increasing awareness of the benefits of complementing
production risk management strategies with marketing risk management
strategies such as puts, calls, forward selling, and others. The
environment created by the new farm programs will require producers to
actively consider these strategies if they are to be successful.
______
Question Submitted by Senator Hutchison
Question. During the month of March 1997 some areas of Texas have
received in excess of 12 inches of rain and today received another 1\1/
2\ inches. The heavy rains have prevented some Texas farmers from
planting crops. At present only about 30 percent of the cotton has been
planted and most will have to be replanted. Most of the grain has been
planted, however, most will have to be replanted due to flooding and
weed infestation as a result of herbicides breakdown.
Is it possible for USDA to extend the final plant date to April 15,
1997 without imposing penalties in the Texas regions where rainfall has
been recently excessive? During last year' drought we used creative
approaches like this to help Texas farmers and ranchers.
Answer. FCIC has received several inquiries that have recommended
that insurance final planting dates be changed so that producers who
plant after the final planting date will not receive reduced production
guarantees. While such action may appear attractive, it can have
negative effects on producers:
--Qualification for a prevented planting production guarantee would
be delayed. Producers who are prevented from planting by the
final planting date may qualify for a prevented planting
production payment. Extension of these dates would require a
producer to be prevented from planting until this extended date
to qualify. Many growers have indicated that it is not
practical to plant after current final planting dates.
--Producers may be compelled to plant until the extended date to
qualify for insurance coverage. Planting may continue even in
situations in which reduced yields and net returns would be
expected. This could result in increased insurance losses and
less acreage planted to short-season substitute crops.
--Insurance policy requirements regarding the replanting of a damaged
crop could be impacted. Current provisions require that a crop
damaged prior to the final planting date be replanted if it is
practical to do so. As indicated above, many growers feel that
planting past the current final planting date is not practical.
--The late planting period would be extended for most crops until 25
days after the new final planting date. The late planting
period would then extend too far into the growing season for
most crops.
--Premium rates may be impacted in subsequent crop years if
additional losses result from the changes in the final planting
date.
--This change would override current policy provisions without
regulatory action in the very type of year/conditions for which
they were designed.
--RMA received negative feedback after certain date changes were made
for the 1995 crop year.
--Insurance providers may seek financial damages--hold harmless--from
RMA to compensate for losses that would not have been incurred
if planting dates were not changed.
It is for these reasons that RMA intends to maintain current final
planting dates and provisions that are expressly designed to deal with
situations where planting is delayed or prevented. RMA will continue to
evaluate any possible steps that will increase producers' awareness and
understanding of these coverages and that will enhance the service that
policyholders currently receive, including any options that may
expedite payment of indemnities to impacted producers.
Subcommittee Recess
Senator Cochran. Thank you all for everything you have been
doing. We congratulate you for your good efforts. Thank you
very much.
Our hearing is concluded. We will have another in a series
of hearings next Tuesday, April 15, at 10 a.m., in this room,
124, of the Dirksen Senate Office Building. At that time, we
will consider the budget request for the Department's rural
economic and community development activities.
Until then, the subcommittee stands in recess.
[Whereupon, at 12:05 p.m., Tuesday, April 8, the
subcommittee was recessed, to reconvene at 10:20 a.m., Tuesday,
April 15.]
AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR
FISCAL YEAR 1998
----------
TUESDAY, APRIL 15, 1997
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:20 a.m., in room SD-124, Dirksen
Senate Office Building, Hon. Thad Cochran (chairman) presiding.
Present: Senators Cochran, Burns, Bumpers, and Harkin.
DEPARTMENT OF AGRICULTURE
STATEMENT OF JILL LONG THOMPSON, UNDER SECRETARY, RURAL
DEVELOPMENT
ACCOMPANIED BY DENNIS KAPLAN, DEPUTY DIRECTOR, OFFICE OF BUDGET AND
PROGRAM ANALYSIS
Rural Utilities Service
STATEMENT OF WALLY B. BEYER, ADMINISTRATOR
Rural Housing Service
STATEMENT OF JAN E. SHADBURN, ADMINISTRATOR
Rural Business-Cooperative Service
STATEMENT OF DAYTON J. WATKINS, ADMINISTRATOR
Alternative Agricultural Research and Commercialization Corporation
STATEMENT OF W. BRUCE CRAIN, EXECUTIVE DIRECTOR
Opening Remarks
Senator Cochran. The subcommittee will please come to
order.
We will continue our hearings on the President's budget
request for the Department of Agriculture and related agencies
for the next fiscal year. We are very pleased this morning to
have Under Secretary for Rural Development Jill Long Thompson
to lead our panel to review this phase of the budget. With her,
we understand, are Wally B. Beyer, Administrator, Rural
Utilities Service; Jan E. Shadburn, Administrator, Rural
Housing Service; Dayton J. Watkins, Administrator, Rural
Business-Cooperative Service; Bruce Crain, Executive Director,
Alternative Agricultural Research and Commercialization
Corporation; and Dennis Kaplan, the Department's Office of
Budget and Program Analysis representative.
Thank you all for being here. If I have omitted someone, I
am going to ask Secretary Thompson to point that out and
introduce others who might be accompanying her this morning.
We have your written testimony, which we appreciate very
much. We will make that a part of the record in full, and ask
you to make whatever summary comments or remarks you think
would be appropriate. We will then have an opportunity to take
questions from the subcommittee members.
Before proceeding, though, I am going to ask my colleague,
Senator Burns, from Montana, if he has any opening statements
or comments he would like to make at this time. Senator Burns.
Senator Burns. Thank you very much, Mr. Chairman.
We have a very lively microphone. Does anybody ever use
this thing? [Laughter.]
We are not going to dwell too much on this. Anyway, Mr.
Chairman, I have a statement. We have to get this week started
off with a little levity or it is going to be a long week, I
fear. So, thank you very much. I will ask if my full statement
can be made a part of the record.
I just want to comment this morning that times change and
the way we serve our rural communities is changing, too. Mr.
Beyer and RUS, we have to start thinking technology and how
technologies serve our rural areas and of course the rural
utilities programs, distance learning, and telemedicine. I have
a great interest in them all because we are moving into a new
era with the different ways that we deliver our services and
how we plan for rural development, how the infrastructure
should look. Broadband communications happens to be a vital
part of that. With rural telephones and with the use of
wireless, all of this becomes very, very important to rural
Montana, just as electricity or anything else is a vital part
of that infrastructure that attracts business and industry,
aside from our traditional agricultural base to those
communities, is vital.
And so I congratulate you for holding these hearings. I am
sorry that we do not have some more money to spend in some
areas on infrastructure. I think that is the role of
Government--to provide that policy and seed money to build
infrastructure and then the rest of us can get out of the way
and let those that have great imaginations and ideas, let those
ideas flow where they serve the majority of the people who are
in the business of providing not only food and fiber, but the
ability to provide the other services that are found in our
rural communities.
And I thank you for this hearing today.
Prepared Statements
Senator Cochran. Thank you, Senator. We have your written
statement and it will be made part of the record along with
statements from Senator Bumpers and Senator Byrd.
[The statements follow:]
Prepared Statement of Senator Burns
Thank you Mr. Chairman. I thank you for calling this hearing today.
The importance of what is going on in rural America is extremely real
to all of us, especially since the majority of this committee comes
from rural states. We are touched daily by the questions that our
friends and neighbors have about the future of their way of life in
rural America. Montana is no different in this respect than is
Mississippi or Arkansas.
I have some concerns about what we are planning to do to assist our
rural American neighbors. I would love to see the ability to spend more
money to spend to assist these people in the development of industries
related to their way of life. However, we must do the most with the
amounts of money we have available to us.
I have a great interest in the efforts of the Rural Utilities
Service to help bring our rural schools and medical facilities into the
Information Age. The RUS Distance Learning and Telemedicine Grant
Program provided seed money to some of our most successful telemedicine
networks in Montana, networks that are still expanding. Rural America
continues to face barriers to full access to telecommunications, and
one of the best ways to get networks up and running is through grant
programs. The grants are relatively small and usually no more than 3
years in duration, but they allow an initial capital investment so the
networks can get started. Telecommunications is an important part of
rural development and I believe we ought to stay focused on it as we
craft this year's bill. This modest investment will bring rural areas
dividends in the form of better education, better health care, and more
jobs.
I will keep my statement short today to hear from the Department of
Agriculture. I thank the Chairman and look forward to hearing from the
Under Secretary today.
______
Prepared Statement of Senator Bumpers
Mr. Chairman, again, thank you for your courtesies and let me offer
a welcome to today's panel. This hearing will focus on the agencies at
USDA charged with the responsibilities for Rural America. My state,
with the exception of a few urban areas, is a rural state. Obviously,
these agencies are therefore very important to my state. I can not go
into any community in any part of my state where the programs
administered by the people in this room have not had some direct effect
of the lives of the people in those communities.
Growing up in Charleston, Arkansas, I still recall when
electricity, running water, and telephone service first came to our
home. I know that these are services most Americans take for granted.
In truth, there are far more Americans than many would expect that
still live day in and day out without these basic services. Without the
USDA rural development programs, many hundreds of thousands of
Americans every year would still be surviving, somehow, without running
water, electricity, or telephones. If America is going to move into the
21st Century as one nation, that means it is up to us to see that all
Americans have access to, at least, the basic services of life. The
United States of America is not a Third World Country and our people
should not be expected to live in conditions as though it is.
Of all the requests that I receive from constituents in my state,
none are more compelling, nor might I add more unrelenting, than
appeals from rural communities and water districts for funding from the
Rural Utilities Service's Water and Wastewater programs. I have seen
first hand what a difference these programs can mean for rural
communities and I have long considered myself a champion for their
cause. My support for these programs is not simply because they are
what my constituents want, I honestly believe these programs are among
the very best provided anywhere within the federal government.
Secretary Thompson, and Mr. Beyer, my congratulations to you for your
continuing good work.
By underscoring my support for the Water and Wastewater programs, I
don't mean to ignore the other important programs at USDA for Rural
America. Adequate housing has been and continues to be a major problem
for rural Americans. When one thinks of homelessness, the immediate
image is usually one found in an urban setting. But homelessness is not
a problem isolated to the inner city, it is found all across our
countryside. Equally troubling is the large number of rural Americans
who live in totally inadequate housing. USDA's housing programs are
designed to make housing affordable, safe, and, in some cases, existent
for many families. I continue my support for these programs, but I am a
little troubled by an item in the budget request calling on this
subcommittee to provide funding for certain section 8 housing
assistance costs that have formerly been under the jurisdiction of the
VA-HUD subcommittee. With our limited resources, I am concerned that
this expansion, without a corresponding increase in our 602(b)
allocation, will be problematic for existing USDA programs.
To further the need for USDA programs, I would like to focus for a
moment on the tragic natural disasters that continue to ravage many
parts of our country. For the past several weeks, we have all witnessed
the terrible losses in the upper plains states from a combination of
massive floods and freezing temperatures. The result has the appearance
of convulsive ice flows that have isolated homes and communities. There
is certainly a role for USDA Rural Development programs to help these
communities and families cope with this disaster.
In addition, last month, deadly tornadoes touched down in several
communities in Arkansas. Beyond the grievous loss of life and personal
injury, many thousands of Arkansans lost their homes and places of
employment. I had hoped that the emergency supplemental request pending
before Congress would have included an amount necessary to remedy these
programs through agencies such as the Rural Utilities Service, the
Rural Housing Administration and the Rural Business and Cooperative
Development Service, but I fear the amounts included, where in fact
they are included, will fall far short unless there are additional
amounts requested by the Administration.
The challenges facing Rural America have always been great. From
the days of early settlement, giving rise to the genesis of the
American spirit, through the trauma of the Great Depression, to the
political disparity resulting from declining populations, Rural America
has been at the heart of American perseverance and on the cutting edge
of national direction. Today, rapidly changing technologies in
communication and information offer Rural America a place at the table
of national and global dialogue and achievement. But that place at the
table will not occur if we don't ensure Rural America the tools
necessary to compete and be a full player in the information age that
is upon us. The agencies here today can, and must, play a vital role in
making sure that Rural America not only has the basic services
necessary for decent living, but also the tools appropriate for the
opportunities that lie ahead.
______
Prepared Statement of Senator Byrd
Chairman Cochran, Senator Bumpers, members of the subcommittee, and
Under Secretary Long Thompson, I am pleased to be here today to review
the U.S. Department of Agriculture's (USDA) Rural Development (RD)
programs. These programs address one of my long-standing priorities--
community infrastructure that meets the basic needs of our citizens.
Particularly, the Rural Utilities Service (RUS) programs provide small
rural communities with grants and loans for water and waste disposal
systems--infrastructure that I deem as a fundamental element of modern
civilization.
Incredibly, in these United States, nearly 8 million people do not
have access to safe drinking water. Now, let me repeat that, 8 million
people in the United States of America, the most prosperous and
powerful nation on the face of the Earth, do not have access to a
reliable source of clean drinking water. That, in my view, is a
national disgrace. National safe drinking water needs are assessed at
some $10 billion. In West Virginia, in 1995, 176,000 families were
without an adequate supply of safe drinking water, and the estimated
cost of needed water development projects in my state alone is $568
million.
The USDA's efforts to provide safe drinking water to American
families are generally laudable, if underfunded. I have maintained for
years that our budget ignores the most basic needs of the people, and
that we must take action to restore common sense to our budget
priorities. Last year, I offered an amendment that would close
corporate loopholes and restore $65 billion to the federal budget for
domestic projects, including funds for water and waste disposal
projects. Upon its defeat, I offered another amendment to add $1.5
billion for federal water and waste water projects. Regrettably, this
amendment was defeated as well. Nevertheless, last year, under the
capable leadership of Bobby Lewis, the West Virginia Rural Development
State Director, the USDA made available $22.2 million to fund projects
that will provide hundreds of West Virginians with access to a reliable
source of clean drinking water for the first time. However, much work
remains, and this hearing is a welcome opportunity to renew attention
to the critical need for federal investment in basic infrastructure. I
have several questions regarding the President's proposed budget in
this regard.
Statement of Jill Long Thompson
Senator Cochran. Madam Secretary, you may proceed.
Mrs. Thompson. Thank you, Mr. Chairman and members of the
committee. I am pleased to be here today to present for your
consideration the 1998 budget request for the rural development
mission area. And before I discuss the specifics of the budget
request, I would like to thank the subcommittee and your staff
for the assistance that you have provided to the mission area
and to the Department over the past year.
With your assistance and leadership, we were able to enact
some of the reforms needed in the multifamily housing program,
and then, also, again with your assistance, we were able to
conduct a very successful voluntary separation program, which
mitigated the need for a large reduction in force. The
voluntary separation program has assisted us in meeting other
commitments, such as the implementation of the centralized
servicing system, and it has permitted us to maintain a staff
that is going to be with us for years to come.
This past year has been very rewarding, as the mission area
has enjoyed a number of successes beyond delivering the program
funds provided by this subcommittee. We began the
implementation of the dedicated loan origination servicing
system, which will save the taxpayers $250 million over the
first 5 years, and $100 million annually thereafter. We have
also completed the streamlining of a number of our major
regulations, single-family housing, business and industry loan
guarantees, and water and waste disposal loans. And we, of
course, are working on others.
Mr. Chairman, since the early days of this administration,
it has been evident that one of the President's highest
priorities is to continue and, where possible, strengthen the
investment in rural America. While we have seen some
improvements in rural areas over the past few years, real
household incomes have actually declined, and poverty rates are
still alarmingly high.
As you know, the majority of rural poor families are
working poor, and incomes are not sufficient to lift families
above the poverty level in many cases. The poverty rate in
rural America still stands at about 17 percent. And even more
disturbing is the fact that 25 percent of rural children under
the age of 18 live in families with incomes below the poverty
level. And among African-American children, the level is about
54 percent.
Neither the programs of this mission area nor any other
Government program can ensure the economic success of any
individual, but we can help eliminate some of the obstacles.
And empowering people and communities to build the capacity to
control their destinies, while partnering with the private
sector to build new economic opportunities is a charge that I
am very committed to, and is the foundation of this budget
request. This budget reflects the President's belief that jobs
create opportunity and long-term community stability.
This administration stands behind the principle that if
sustainable economic development is to occur, rural communities
themselves must develop the structures that enable them to
respond to rapidly changing economic conditions and forces in
order to become competitive and to remain competitive. The
communities that are successful are those that take the
initiative and have the determination to succeed.
As you know, one of the requirements of the 1996 farm bill
is that our State directors in rural development, working in
concert with local communities and the States, prepare a plan
for the expenditure of the funds appropriated through these
programs. Each State office has submitted a draft of their
plan, and we are now in the process of reviewing them. And
based on my early review of them, I do expect that these plans
will very much be like business plans that articulate where a
particular State hopes to be 5 or 10 years from now, and sets
forth very concrete steps, benchmarks, to get there.
In fact, the benchmarking is one of the more useful tools
that comes out of the empowerment zone enterprise community
experience. One of our champion communities, an applicant that
did not receive designation as an empowerment zone or an
enterprise community, did not wait around for the Federal
Government to act, and based on the plan they developed, they
have now brought in $100 million in investments without
Government assistance.
I very much appreciate the willingness of this subcommittee
to appropriate funds under the Rural Housing Assistance
Program, the Rural Business Assistance Program, and the Rural
Utilities Assistance Program for fiscal year 1997. However, I
do remain convinced that the additional flexibility that we
requested--the authority to transfer up to 10 percent
nationally from one funding stream to another--is a tool that
we need to improve the use of the programs as development
tools. For that reason, we have again submitted the budget
under the terms of the Rural Community Advancement Program, as
enacted in the 1996 farm bill.
The budget request for RCAP totals $2.5 billion in program
level, and that translates to a $689 million level in budget
authority. As a former Member of Congress, I fully understand
and I share the committee's concerns regarding accountability
for sums of money of this magnitude and the ability to track
expenditures.
And today I want to assure the committee that I would not
approve any transfer until a system has been developed to track
the amounts of funding transferred, nor will any transfer be
approved unless the administrators of the respective agencies
agree to it. We have developed such a tracking system and we
can implement it quickly should we be given this authority.
The budget request for the Rural Housing Service, including
those programs under RCAP, totals $921 million in budget
authority, which will support a loan and grant program level of
$5.4 billion. Over 60 percent of the budget authority is for
the Rental Assistance Program, which, as you know, is the
rental subsidy that makes it possible for very low income
families to live in the multifamily projects that the
Department of Agriculture finances.
The request also includes a transfer from HUD of $52
million, for us to assume the responsibility for administering
the HUD section 8 assistance in some of our housing projects.
For the Rural Utilities Service, including what is
requested under RCAP, the total is $734 million in budget
authority, which will support $3 billion in loans and grants.
And over 80 percent of the budget authority is to support the
water and waste disposal loan and grant programs. The request
for these two programs is essentially the same as the
subcommittee provided last year. And this level will enable us
to continue our commitment to the Water 2000 initiative, as
well as meet some of the other increasing demands for these
programs.
Probably the most significant change from last year's
budget involves the Distance Learning and Telemedicine Program.
We are requesting $21 million in grant funds, compared to the
$7.5 million the subcommittee made available in 1997. And the
reason for an increase of this magnitude is quite simple. As
Senator Burns very eloquently stated in his remarks, I believe
that, in the long term, this program will generate a greater
return to the American public and the Federal Government than
any other program. And the program is a prime example of why we
should view these programs as investments rather than simply
expenditures.
The program budget request for the Rural Business-
Cooperative Service totals $70 million in budget authority, and
that would support a loan and grant program level of $780
million. As I have stated earlier, I firmly believe that the
private sector is the key to sustainable economic development
in rural areas.
And while the private sector has worked very well in most
areas, there are some rural communities in which the private
sector does not participate as well as they or we would like
them to. And as I have also said, I believe the Government's
role in these areas should be to encourage the private sector
in doing what it does best. Increasing the role of the private
sector will enhance our ability to create and maintain jobs in
rural America.
The budget request includes $10 million for AARC. That is
an increase of $3 million over fiscal year 1997. AARC is of
critical importance in enhancing private investment in rural
areas. As you know, AARC's investments have led to the creation
of 5,000 new jobs, all in rural areas, and each one related to
value-added agricultural products.
With regard to salaries and expenses, I am very pleased
with the progress that rural development has made in meeting
our objectives in streamlining and reinvention. And I pledge to
you that we will continue to do our share in changing how we
conduct business. These changes are long overdue, and had they
been made when needed, they probably would not be as costly as
they are today.
The improvements we are making, such as DLOS, can only be
achieved if up-front investments are made. We have implemented
improvements without significant negative consequences on
employees, and we thank the subcommittee for helping us to
accomplish that.
For salaries and expenses, I have requested $516 million
for fiscal year 1998, which is a reduction from 1997. But I
believe it is exactly what we need to continue to administer
the programs and to carry out our other responsibilities
without having to impose further reductions in force.
Mr. Chairman, before I close, I would like to say that,
last year, you questioned our projections regarding the subsidy
rate for the single-family housing loans. And at that time, I
suggested, in jest, that you were being cynical. And at this
point, looking back, I would like to say that I very much
admire your ability to forecast economic trends; that you were
more accurate than I was. And I am hopeful that, as we work
toward fiscal year 1998, that what we are requesting will be a
more accurate reflection of what the true interest rates are
going to be and what the Treasury rates will be.
You were more accurate than I was.
Senator Cochran. Thank you.
Mrs. Thompson. And I say that as someone who has taken a
number of courses in economic forecasting and have studied
econometric models and feel that I have a pretty good
background. And I think that you were quite accurate last year.
Prepared Statements
Senator Cochran. Well, thank you, Madam Secretary. And let
me say that we have statements from others on the panel which
we will also incorporate in our hearing record. But if any of
the others have an opening statement, we would be happy to
receive their comments at this time.
Mrs. Thompson. We would be happy just to submit them for
the record, so that we can proceed with your questions.
[The statements follow:]
Prepared Statement of Jill Long Thompson
Mr. Chairman and Members of the Committee, I am pleased to be here
today and present for your consideration the 1998 Budget request for
the Rural Development Mission Area. Before I discuss the specifics of
the Budget request, I would like to thank the Subcommittee and your
staff for the assistance provided to this mission area and to the
Department during the past year. With your assistance and leadership we
were able to enact some of the reforms needed in the multi-family
housing program and, again with your assistance, we were able to
conduct a very successful voluntary separation program which mitigated
the need for a large Reduction-in-Force. The voluntary separation
program has assisted us in meeting other commitments such as the
implementation of the centralized servicing system, and has permitted
us to maintain a staff that is going to be with us for years to come.
Mr. Chairman, this past year has been very rewarding as the mission
area has enjoyed a number of successes beyond delivering the program
funds provided by this Subcommittee. We began the implementation of the
Dedicated Loan Origination and Servicing System (DLOS) which will save
the taxpayers $250 million over the first five years and $100 million
annually, thereafter. Implementation is still in the early stages, but
we see no reason that we cannot meet our projected completion date of
October 1, 1997. DLOS is one of the largest government reinvention
efforts undertaken, and the monetary savings is only one part of the
success. We have proven that we can successfully manage large scale
change, and we have proven that change does not necessarily lead to
negative consequences for our employees.
We have also completed the streamlining of a number of our major
regulations: single-family housing, business and industry loan
guarantees, and water and waste disposal loans, and we are working on
others. Our objective has been not just to streamline, but also to
produce a product that works better and costs less. These regulations
are not only smaller in volume--they are much more understandable and
customer friendly. Further, in order to make the business and industry
loan guarantee program more attractive to lending institutions, the
application forms will soon be available electronically, and they can
be forwarded to our offices electronically. We are now examining other
opportunities to use this application process.
focus of the 1998 budget
Mr. Chairman, since the early days of this Administration it has
been evident that one of the President's highest priorities is to
continue, and where possible strengthen, the investment in rural
America.
While we have seen some improvement in rural areas over the past
few years, real household incomes have actually declined and poverty
rates are still alarmingly high. The majority of rural families are
working poor. Incomes are not sufficient to lift families above the
poverty level in many cases. The poverty rate in rural America still
stands at about 17 percent. Even more disturbing, however, is the fact
that 25 percent of rural children under the age of 18 live in families
with incomes below the poverty level, and among African American
children, the level is about 54 percent. As the President said in his
State of the Union address, our economic future is with these children,
and their Education and training will be the cornerstone of tomorrow's
economy. However, many of these children may not have the opportunity
to obtain the necessary education because they still lack basic
amenities of life such as adequate shelter and running water in their
homes. Investment in the elimination of these problems must continue,
and we must view them as investments, rather than simply expenditures.
empowerment and partnerships
Neither the programs of this mission area nor any other Government
program can ensure the economic success of any individual, but we can
help eliminate some of the obstacles. Empowering people and communities
to build the capacity to control their destinies while partnering with
the private sector to build new economic opportunities is a charge that
I am very committed to and is the foundation of this budget request.
This budget reflects the President's belief that jobs create
opportunity and long-term community stability. We recognize that it is
primarily the responsibility of the private sector to create the needed
jobs. However, in many rural areas, the private sector alone cannot
accomplish the task. These are the areas where we need to focus our
efforts and help the residents and the private sector create
opportunity.
This Administration stands behind the principle that if sustainable
economic development is to occur, rural communities themselves must
develop the structures that enable them to respond to rapidly changing
economic conditions and forces in order to become competitive and to
remain competitive. The communities that are successful are those that
take the initiative and have the determination to succeed.
There has been some improvement in rural areas, but examining the
data closely reveals that most of the improvement occurs in those
counties adjacent to metropolitan areas. According to one report, over
400 rural counties have fewer jobs today than in 1969. These counties
are generally found in the northern plains, the agriculture heartland,
the Mississippi Delta, the Cotton Belt, and natural resource dependent
states. The growth that has occurred in rural areas tends to be
concentrated in slow growth or declining industries--and in the more
rural counties that have experienced growth, it tends to be in low-
skill, low-wage jobs. This type of growth does not provide a base for
self-sustaining economic development.
For sustainable development to occur, rural communities must either
attract more of the high skill industrial employment or increase the
number of higher income residents and the only means of accomplishing
this is to increase investment that improves the communities' ability
to compete in an increasingly global economy. Depending on their
individual circumstances, this investment ranges from basic
infrastructure improvements and housing to business and industrial
investment. And we in the Federal government who administer programs
that assist rural areas must be willing to work with the communities,
and the States, to ensure that the investments are tied to long-term
strategic improvements. As you know, one of the requirements of the
1996 Farm Bill is that our State Directors, working in concert with
local communities and the States, prepare a plan for the expenditure of
the funds appropriated through these programs. Each State Office has
submitted a draft of their plan and we are now in the process of
reviewing them. I expect these plans to be like business plans that
articulate where a particular State hopes to be 5 or 10 years from now
and sets forth very concrete steps (bench marks) to get there. Bench
marking is one of the more useful tools to come out of the Empowerment
Zones/Enterprise Communities (EZ/EC) experience. One of our ``Champion
Communities'', an applicant that did not receive designation as an EZ/
EC, did not wait around for the Federal government to act. Based on the
plan they developed they have now brought in $100 million in
investments without government assistance. This is the ability and
determination that we hope to create in all of our customers.
rural community advancement program (rcap)
I very much appreciate the willingness of this Subcommittee to
appropriate funds under the Rural Housing Assistance Program, the Rural
Business Assistance Program, and the Rural Utilities Assistance Program
for fiscal year 1997. However, I remain convinced that the additional
flexibility that we requested, the authority to transfer up to 10
percent nationally from one funding stream to another, is a tool that
we need to improve the use of the programs as development tools. For
that reason we have again submitted the budget under the terms of the
Rural Community Advancement Program (RCAP) as enacted in the 1996 Farm
Bill.
I strongly believe that the key to economic growth in rural areas
is the private sector, particularly the investment community. In most
rural areas the private sector works quite effectively and efficiently.
However, in other areas it does not work as well and when investment
capital flows out of rural areas the local capacity to foster economic
development declines, as does the incentive to invest in these areas.
Inevitably, the Congress and the Administration are faced with public
policy choices regarding these problems. What we collectively have done
over the past few decades is enact new programs to meet some of the
needs. The programs we administer today are a result of that process
and while they individually have been very successful in eliminating or
mitigating specific problems, they have not been used collectively to
address the economic structural problems that plague many of our rural
areas. What the Administration proposed, and what the Congress enacted
in the 1996 Farm Bill, was the philosophy of better using what
resources we now have rather than creating new programs which stood
little chance of being funded due to budget constraints. If the problem
is investment capital, we should focus our efforts not on new programs,
but rather on how we can encourage the private sector by expanding
secondary markets, making existing programs easier to use, working with
community bankers to increase their ability to package loans, sharing
risk with other institutions, and creating more partnerships with the
private sector. This philosophy should also apply to infrastructure
investments. At every opportunity we are involving other lenders and
other sources of funds in our projects to stretch our limited
resources. We can and we will do more of this. But, what we need is the
flexibility to bring the key players to the table and structure a
financial package that is good for the community, is a sound investment
for the local lender, and reduces the involvement of the Federal
government. Neither the Federal government, local or state governments,
nor the private sector can solve these problems alone. We have to work
together. The Federal government has to be more flexible in its
approach to solving these problems, and, in my opinion, the flexibility
outlined in RCAP is the most important part of the legislation.
The budget request for RCAP totals $2.5 billion in program level
and $689 million in budget authority. As a former Member of Congress, I
fully understand and share the Committee's concerns regarding
accountability for sums of money of this magnitude and the ability to
track expenditures. I assure the Committee that I would not approve any
transfer until a system has been developed to track the amounts of
funding transferred, nor will any transfer be approved unless the
Administrators of the respective Agencies agree to it. We have
developed such a tracking system and can implement it quickly, should
we be given the authority requested.
rural housing service
The budget request for the Rural Housing Service, including those
programs under RCAP, totals $921 million in budget authority which will
support a loan and grant program level of $5.4 billion. Over 60 percent
of the budget authority is for the rental assistance program which, as
you know, is the rental subsidy that makes it possible for very low-
income families to live in the multi-family projects that USDA
finances. The request also includes a transfer from HUD of $52 million
for us to assume the responsibility for administering the HUD section 8
assistance in some of our housing projects. The Administration has
adjusted USDA and HUD budget ceilings to reflect this transfer of
responsibility. The request also includes $4 billion for single-family
housing loans, $1 billion of which is for direct loans. Loans, loan
guarantees and grants for community facilities total $428 million with
a subsidy cost of $27.6 million. As you know, the funds are used to
finance a wide variety of community facilities ranging from hospitals
and health clinics to sidewalks and drainage improvements, with over 50
percent of the money being utilized for either health facilities or
fire and rescue equipment.
Mr. Chairman, during the past few decades this country has made
great strides in reducing the number of Americans living in inadequate
housing and much of the credit for this success lies with this
Subcommittee. Unfortunately, there is still a large number of rural
Americans living in inadequate housing and, despite the desire of each
one of us to balance the budget, the simple fact is that housing poor
families costs money. And as we deliberate this budget request we must
keep in mind that this housing is more than shelter from the elements--
it is more than providing short-term jobs in the housing industry and
increasing the local tax base of the community. Being a homeowner
increases the dignity of these families immeasurably--it provides an
environment for the children to gain more from their education. I would
strongly encourage each Member of the Subcommittee to visit one of our
mutual and self-help housing sites, visit with the families that have
built their own homes with a little help from the Federal government,
and experience what being a homeowner means to these families. Programs
such as the mutual and self-help program should be among the highest
priorities of this government because it gives people the opportunity
to lift themselves out of their existing conditions. I think a quote
from a recent article in the Los Angeles Times puts the proper
perspective not only on the self-help program, but all of our programs.
The statement is made by a gentleman in Mississippi, who with his
family, recently moved into a new home that he and neighbors
constructed through the program. He ``imagines the children having a
clean place to study and himself awakening after a good nights rest
where you don't have to worry about catching rain in pots and pans''.
rural utilities service
The request for the Rural Utilities Service programs, including
those requested under RCAP, totals $734 million in budget authority
which will support $3.0 billion in loans and grants. Over 80 percent of
the budget authority is to support the water and waste disposal loan
and grant programs. The request for these two programs is essentially
the same as the subcommittee provided last year and this level will
enable us to continue our commitment to the Water 2000 Initiative as
well as meet some of the other increasing demand for these programs. We
presently have a backlog of applications for water and waste disposal
loans and grants totaling over $4 billion, and this represents but a
fraction of the funding that will be required to meet water quality and
drinking water standards in rural areas. We will be increasing our
efforts to attract other funding for these projects in order to stretch
our limited resources.
The most significant change from last year's budget involves the
distance learning and telemedicine program. We are requesting $21
million in grant funds compared to the $7.5 million the Subcommittee
made available for 1997. The reason for an increase of this magnitude
is quite simple. I firmly believe this program will, in the long-term,
generate a greater return to the American public and the Federal
government than any other program, and the program is a prime example
of why we should view these programs as investments rather than simply
expenditures. This is part of the President's emphasis on education.
This program will ensure that rural students have access to the same
educational opportunities available in suburban and urban schools, and
improves the prospect that more of the students will remain in rural
areas because they will no longer have to migrate to urban areas for
better jobs. This technology means that the information business is no
longer dependent on being close to urban centers.
Not only does the distance learning program provide the enhanced
educational opportunities to rural students that will enable them to
compete in the job market and the universities with urban students, but
it provides those students from poverty stricken families the
educational tools that may change their lives. They no longer have to
face a future of very limited opportunity or perhaps be doomed to a
future of public assistance. These are the faces that light up the most
when provided access to this technology. They are the ones that realize
this access can help them break out of the poverty cycle that affects
too many rural areas in this country. Secretary Glickman and I had the
fortune to visit the schools in the Mississippi Empowerment Zone and
see first hand what this technology means to these students. And I
might add that this effort is supported not only by the Federal
government. The private sector has been working hand-in-hand with us.
In this particular school system we were able to place a number of
Federal surplus personal computers, many which we and others repaired
and upgraded. A private firm from Indiana donated 40,000 feet of cable
initially, and has agreed subsequently to donate an additional 3.5
million feet, while Federal employees and employees of the local
telephone company volunteered the labor to wire the schools so the
students could have access to the information Superhighway.
Mr. Chairman, none of the success we will see from the distance
learning/telemedicine program would have been possible without the
rural electric and telecommunications programs. The positive economic
effects these two programs have had on rural America cannot be
measured. I say this to reiterate the point that rural America cannot
attract the businesses or industry it needs to strengthen local
economies without making investments in infrastructure. Mr. Chairman,
we are requesting $34 million in budget authority to support a total
program level of $1.5 billion for electric and telecommunication loans.
rural business-cooperative service
The program budget request for the Rural Business-Cooperative
Service totals $70 million in budget authority--this will support a
loan and grant program level of $780 million. As I have stated earlier,
I firmly believe that the private sector is the key to sustainable
economic development in rural areas, and while the private sector has
worked very well in most areas, there are some rural areas in which the
private sector does not participate as well as they or we would like
for them to. And as I have also said, I believe the Government's role
in these areas should be to encourage and assist the private sector in
doing what it does best. Increasing the role of the private sector will
enhance our ability to create and maintain jobs in rural America.
We have taken several steps to make the business and industry loan
guarantee program easier for private lenders to use and we have also
included incentives for the lenders to participate in areas in which
they are now not very active, such as the Empowerment Zones/Enterprise
Communities. For example, we are willing to increase the level of
guarantee from 80 percent to 90 percent and decrease the guarantee fee
from two to one percent on loans made in the targeted areas. The
application will soon be available electronically, and the lenders will
be able to submit the applications electronically. All of these changes
should increase the participation and efficiency in the program.
Mr. Chairman, with the decline of the traditional farm programs
which provided stability in the farm markets, I firmly believe that
cooperative-owned farm businesses offer an opportunity to pool risk,
increase marketing power, and provide the stability no longer available
through the price support programs. We see cooperatives as part of the
safety net for farmers. In addition, I think we will see more
cooperative processing businesses to maximize the amount of money
returning to the farmer and remaining in the rural communities. We will
soon be submitting legislation to the authorizing committees to
authorize the delivery of assistance to nonagricultural cooperatives.
There is an increasing interest in rural areas to use the cooperative
form of business to deliver other services such as health care, child
care and housing. At present we are prohibited from providing such
assistance unless the primary sponsor is an agricultural cooperative.
This legislation, if enacted, will provide another important tool in
our rural development efforts and I think we will see more use of our
business programs by cooperative ventures. As I said earlier in this
statement, it is important that local investment capital remain in the
local community--this is the foundation that makes sustainable
development possible. Once the investment capital starts to migrate to
other areas a declining spiral in the economy begins and it is very
difficult to reverse.
alternative agricultural research and commercialization corporation
Mr. Chairman, the budget request includes $10 million for AARC, an
increase of $3 million. AARC is of critical importance in enhancing
private investment in rural areas. AARC's investments have led to the
creation of 5,000 new jobs, all in rural areas and each one related to
value-added agricultural products. AARC equity investments are part of
the safety net for farmers, providing that vital link between the
development of new products based on agricultural commodities and
successful commercialization that is now even more critical with the
gradual phase out of commodity support payments.
salaries and expenses
Mr. Chairman, I am very pleased with the progress that Rural
Development has made in meeting our objectives in streamlining and
reinventions and I pledge to you that we will continue to do our share
in changing how we conduct business. These changes are long overdue and
had they been made when needed, they probably would not be as costly as
they are today. The improvements we are making, such as DLOS, can only
be achieved only if up-front investments are made. We have implemented
improvements without significant negative consequences on employees,
and we thank the Subcommittee for helping us accomplish that. Mr.
Chairman, for Salaries and Expenses I have requested $516 million. This
is a reduction from 1997 and is exactly what we need to continue to
administer the programs and carry out our other responsibilities
without having to impose further Reductions-in-Force. The level
appropriated for 1997 presented some management challenges, but through
planning and moving some items planned for 1997 back into 1996 and
delaying other plans and reducing other headquarters expenditures, we
have been able to work within the level provided and maintain our
commitment not to reduce administrative support of the State Offices.
Seventy four percent of our request is composed of salary costs. We
cannot continue to absorb costs without further reductions-in-force,
and we cannot afford to reduce the staff further than we have planned
without jeopardizing the delivery of programs. We will have reduced the
staff by over 2,000 positions since 1993 and we have closed just under
400 offices. At the same time, our costs have increased automatically
through inflation and annual cost of living adjustments and further
reductions in salaries and expenses will necessitate reductions-in-
force and that will negate much of the progress we have made.
Thank you very much for the opportunity to discuss the budget
request for rural development. The Administrators and I will be happy
to respond to any questions you may have.
______
Prepared Statement of Wally Beyer
Mr. Chairman and Members of the Subcommittee, I am pleased to
accompany Under Secretary Jill Long Thompson and present the 1998
Budget and Program Proposals for the Rural Utilities Service. I want to
thank the Subcommittee for the support you are providing to rural
America. Investment in infrastructure continues to be an investment in
our Nation's future productivity and equality of economic opportunity.
Congress has always recognized that it is in our national interest for
all citizens, and all regions, to have equal opportunity to build, to
grow and to develop to our greatest potential. The latest example was
the passage of the Telecommunications Act of 1996, when Congress and
the President declared that it was in our national interest to ensure
that reliable, affordable, telecommunications be available to rural
citizens as well as major population centers.
The character of this Nation is rooted in rural America. We began
as an agrarian society and our rural experience still affects our
lives. Geographically we are rural. Rural America comprises 80 percent
of the Nation's landmass. With nationhood comes responsibility, and the
investment we as a people and as a government have made in the
infrastructure of rural America has benefited all Americans. This
investment has increased economic productivity, improved health care
and education and created a modern agriculture that is a part of the
global economy. Living in the Great Plains most of my life, I know
firsthand the benefits of our rural electric, telecommunications and
water programs. The opportunity that the government has ``helped to
ensure'' throughout the years will be just as important tomorrow as it
was 60 years ago.
The rural infrastructure programs are the foundation of rural
education, health and economic development. Without a strong
foundation, rural America will not be able to build on its strengths
and aid the country as we move into this increasingly competitive
global economy.
RUS is the Federal government's point agency for rural
infrastructure assistance. RUS infrastructure programs focus on
targeting scarce Federal resources into high cost areas, poverty areas,
low density and out-migration areas and servicing the unserved.
Priority is given to leveraging scarce Federal dollars. The 1998 budget
proposes $34 million in budget authority for the electric and
telecommunications infrastructure loan programs. This $34 million
budget authority will generate $1.5 billion in Federal loans with an
additional leveraging of $4.33 billion private capital for a total
anticipated 1998 capital investment of $5.8 billion in the rural
electric and telecommunications infrastructure. This relatively small
Federal dollar investment in rural infrastructure is a critical
catalyst for the much needed private, state, and local capital used to
maintain quality reliable infrastructure in rural America at reasonable
cost. Each Federal loan dollar in the RUS telecommunications program
leverages 4.5 private capital dollars. Each Federal loan dollar in the
RUS electric program leverages 3.0 private capital dollars.
water and waste disposal programs
It is hard to imagine, but in this modern era we still have rural
areas with families that are drinking unsafe water and families without
plumbing and wastewater facilities. These are pressing but solvable
public health concerns. Towns and communities of less than 10,000
people often lack the tax base and bonding authority to construct,
update, or repair water and waste disposal infrastructure systems.
Drinking water and waste disposal infrastructure is basic and vital
to both health and economic development. The Water and Waste Disposal
Program administered by RUS invests loans and grants to bring safe
drinking water and sanitary, environmentally sound waste disposal
facilities to rural Americans in greatest need. If economic growth is
going to occur in an area, adequate water and waste disposal facilities
are a necessity. The challenges presented by investing in safe and
clean water for rural areas and small communities are sometimes
daunting, but our achievements are among our most rewarding.
The programs make sound investments in rural citizens and small
communities, improving the lives and public health standards of rural
Americans in all 50 states. Sanitary and environmentally sound water
and waste disposal facilities are key to protecting against serious,
often life threatening illnesses related to water contamination, such
as crypto sporidium,\1\ giardia, gastroenteritis, cholera, typhoid, and
salmonella.
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\1\ Crypto sporidium killed more than 100 people in Milwaukee,
Wisconsin, in April 1993, and seriously sickened thousands more.
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The RUS loan and grant programs will provide safe, affordable
drinking water to an estimated 782,000 rural households and an
estimated 2.2 million people in 1998. This program consistently has far
more requests for funds than funds available. At the end of 1996,
states had on-hand loan and grant applications totaling $4.1 billion.
State Rural Development Directors have for several years done an
outstanding job of mixing grants, loans, state and non-USDA funds to
leverage and finance the highest priority projects. Based on the
Administration's belief and policy that low income and poverty areas
represent the greatest need, water and waste disposal investments are
targeted to those areas.
Water 2000 initiative
In the RUS' state-by-state assessment in 1995, we found that an
estimated 2.5 million rural Americans, including some one million
people who do not have water piped into their homes, have critical
needs for safe, dependable drinking water. Approximately 5.6 million
more were found to have additional serious needs under Safe Drinking
Water Act standards. Water 2000 is an initiative to clearly assess
those needs and to target the loan and grant investments to address
them. State Rural Development offices have completed the Needs
Assessment which shows at least $3.5 billion in critical rural safe
drinking water investment needs, and another $6.5 billion in additional
serious needs.
A good example of the value of this initiative is a project just
funded to allow the City of Campton, Kentucky, to expand its current
public water system to rural homes that now rely on spring, creek and
well water.
Located in Wolf County in the Appalachian region of Kentucky, the
local economy is limited to small farms, small timber operations, and
small coal mines. The median household income in Wolfe County is
approximately $11,000, less than half the state average of $22,232. The
County has water sample records from the supplies of more than 100
people living in the proposed service area and the majority of the
tested samples are highly contaminated with fecal coliform and/or
confluent growth and some have detected the presence of dangerous E.
Coli bacteria. By expanding the service area of the community, an
additional 370 users will have a safe, dependable source of good
drinking water.
Water 2000 special allocation
In 1996, Congress provided us with $36 million (budget authority)
in unspent funds from the special supplemental nutrition program for
Women, Infants and Children (WIC), to be used for safe and clean water
projects. In July 1996, we converted these funds into $59 million in
Water and Wastewater loans and grants, which we supplemented with $11
million in loans and grants from regular State allocations, and used to
implement a total of $70 million 54 targeted safe drinking water
projects in 35 states. These projects, once all completed, will result
in improved drinking water quality, quantity and dependability for an
estimated 145,122 people, including some 18,200 receiving public water
in their homes for the first time.
In 1995 and 1996, RUS invested a combined total of $547 million in
loans and grants in projects that meet the guidelines of Water 2000,
which place a priority on serving unserved or under served households.
Water and waste disposal budget
The budget requests a total of $1.2 billion Water and Waste loans
and grants. The program mixes loans and grants, according to the needs
of the community or system, in order to provide water and waste
disposal at an affordable rate. Under the RCAP program, the budget
request is for a 1998 program level for Water and Waste Disposal loans
of $809 million with a budget authority of $72 million and Water and
Waste Disposal Grants and $484 million in grants.
telecommunications
Technological advances in the telecommunications industry will mean
new tools to increase opportunities for rural America. The Information
Superhighway will help rural America survive, prosper, and compete. It
brings the entire world to the door of our rural citizens. Whether
enabling regional communication or finding new markets throughout the
world, access to the Information Superhighway is vital to the future of
rural America.
The RUS Telecommunications program provides a cost-effective means
for assisting rural telecommunications providers in building the
infrastructure for the Information Superhighway in rural America. The
program provides capital, establishes telecommunications standards, and
provides policy guidance for rural telecommunications in the National
Information Infrastructure initiative. This service is needed more than
ever with the passage of the Telecommunications Act of 1996
(Telecommunications Act). Significant investment in rural
infrastructure will be required to meet the promise of the
Telecommunications Act and the maintenance, expansion, and improvement
of the rural infrastructure.
The RUS Telecommunications Program continues to provide leadership
in this changing environment. Just as we engaged in the development of
the Telecommunications Act, we have been deeply involved in working
with the FCC, the Federal-State Joint Board and State Public Utilities
Commissions to create an acceptable universal service structure. To
share ideas about the importance of telecommunications in people's
lives, RUS held six satellite accessible rural telecommunications
forums around the country bringing together Federal and State policy
makers with rural Americans to discuss issues and exchange ideas.
Telecommunications Program Budget
The 1998 Budget requests $300 million for treasury rate loans, $120
million in guarantee of direct FFB financed loans, and $40 million for
5 percent hardship loans. These program loans are financed with a total
budget authority of $1.6 million. RUS has requested budget authority in
a single amount for telecommunications programs. If the Administrator
has the flexibility to move budget authority between the
Telecommunications programs, it will better enable the Agency to meet
the needs of borrowers and the citizens of rural America who are the
end users of these vital services.
Distance Learning and Telemedicine Program
The Distance Learning and Telemedicine Loan and Grant Program has
emerged as one of the most dynamic new programs in the rural
development area. For the past four years grants have been made to
rural organizations to buy end-user equipment to encourage, improve,
and make affordable telecommunications access to educational and health
care services. The demand for the distance learning and telemedicine
grants has been high. For the four fiscal years from 1993 through 1996,
RUS has received 896 applications seeking a total of $277 million. Due
to budget constraints, only $35 million was available. This money
funded 119 projects in 39 states and one territory, leveraged more than
66 million in non-federal dollars. In 1997, under our new authority, we
will make our first loans.
Through 4 years of the grant program activity, approximately 704
rural schools in 33 states, serving nearly 600,000 rural students, will
be able to utilize the Information Superhighway to share limited
teaching resources and to gain access to libraries, training centers,
vocational schools, and other institutions located in metropolitan
areas. For telemedicine, approximately 500 rural medical facilities in
23 states and one territory, serving more than two million rural
residents, will be able to provide improved health care through linkage
with other rural hospitals and major urban medical centers for clinical
interactive video consultation, distance training of rural health care
providers, management and transport of patient information, and access
to medical expertise or library resources. This amazing leveraging of
resources is a testament to the creative nature of our rural citizens.
Distance Learning and Telemedicine Loan Program
The Federal Agriculture Improvement Act of 1996 (1996 Farm Bill)
added a loan component to the RUS Distance Learning and Telemedicine
Program. For its first year, 1997, the loan component has been funded
at a program loan level of $150 million. This loan component will help
to meet the extraordinary demand from rural schools, libraries,
community centers and health care providers to purchase end-user
equipment. The new loan component will also allow third parties to
guarantee the repayment of, or to borrow funds on behalf of, rural
schools, community centers, or libraries that either cannot incur long-
term debt or need a little extra help.
This increase in program level for end-user equipment will fit
hand-in-glove with the discount in the Telecommunications Act of 1996
for transmission costs for schools, libraries and rural health care
providers. Community centers can also use the equipment for welfare to
work programs.
To bring it all together, we are in the process of revising the
regulations to integrate the loan component into the program.
Distance learning and telemedicine grant and loan budget
The Budget requests $21 million for grants in 1998. This is triple
the current grant program, a $13.5 million increase over the 1997
appropriation. For the new loan program, the Budget requests a program
level of $150 million.
Rural Telephone Bank
Congress created the Rural Telephone Bank (RTB) to address the
increasing need for capital to develop rural telecommunications
services. Over the life of the program, the RTB has lent more than $3.2
billion to rural telecommunications borrowers to help build, maintain,
and upgrade the rural telecommunications infrastructure.
Pursuant to statute, the RTB began the process of privatization
during fiscal year 1996, when the Board of Directors voted to retire
$18 million of government held stock. Also during 1996, we completed a
study on how accelerated privatization of the RTB would impact the
RTB's ability to obtain capital in the private markets. The study
concluded that the RTB could accelerate the maximum statutory
privatization period and be in good shape to borrow money in the
private markets by the end of 1998.
The RTB is in a strong financial position with more than $1 billion
in net worth. By the end of fiscal year 1998, the RTB will have
sufficient internally generated funds to fully retire the government's
remaining $574 million capitalization of the RTB. The Administration is
working on legislation which would allow a fully private RTB to
leverage its net worth in the private markets and free the RTB from the
restrictive lending purposes of the RUS program--allowing more capital
for investment in the new rural telecommunications market structure.
Rural Telephone Bank budget
The 1998 budget request is for $3.7 million in budget authority, to
support a program level of $175 million in loans.
electric program
The Electric Program represents one of the most effective public/
private partnerships in the history of our Nation. The Electric Program
seeks to ensure universal electric service at affordable rates. It
serves as a cost-effective means for the leveraging of capital for the
maintenance of a nationwide network of infrastructure. The investment
is a continuing success story.
Today, the Nation's electric industry is changing dramatically. It
is moving from a monopoly-based to a competitive structure. Already, to
a great extent, the wholesale power industry has been deregulated.
Several states are already introducing competition at the retail level,
and legislatures in another dozen states are actively considering like
proposals. The 105th Congress will debate a national restructuring this
year.
As the debate on electric utility restructuring and deregulation
develops, the RUS believes there are two goals that should be part of
the development of any restructuring of the marketplace. The first goal
is to ensure the continued availability of reliable, high quality
electric service at a reasonable cost to rural consumers. The second
goal is to protect the integrity of the government's loan portfolio.
To accomplish these goals, the RUS believes that any restructuring
of the electric utility industry should be guided by the principles of
reliability, fairness and flexibility. The transition to a more
competitive industry environment must maintain the reliability of the
Nation's electric system. A more competitive electric sector with
retail choice should be fair and equitable to all consumers--including
rural citizens, to existing electric utilities, and to Federal
taxpayers who support the RUS program. Finally, industry restructuring
should be flexible and contain a thoughtful transition process that
accommodates the diversity of the electric utility industry, state
regulatory structures and policies, and a process of educating
consumers about the changes.
To help address the changing nature of the industry, the RUS is
reforming itself. We have made the first reform of our mortgage and
loan security documents in 25 years. Working with the Office of General
Counsel (OGC), we have instituted an automated loan processing system,
a computerization of our loan and security document preparation that in
the telecommunications program has reduced the time involved from up to
6 months to a turn around of 10 days. We have streamlined our
regulations and processes to maximize borrower flexibility. The new
regulations and procedures enhance a borrower's ability to attract
private financing while at the same time making internal changes to
compete more effectively. New merger regulations encourage borrowers to
take advantage of the economies of scale. The RUS continues to review
our programs and procedures to allow for a more efficient program that
is customer friendly while protecting the taxpayer investment in a
modern rural infrastructure.
RUS' Rural Electric Program is the primary mechanism that helps to
provide universal service to those areas that are the highest cost to
serve. The program helps service approximately 25 million rural
Americans living on 80 percent of the land mass, areas that investor-
owned and municipally-owned utilities failed to serve. Rural electric
cooperatives own 2.2 million miles of line, serving an average of 5.5
customers per mile. This compares to an average of 35 customers per
mile of line that other providers serve. Unlike the telecommunications
industry, where over the years, many mechanisms have been created to
offset the high cost to serve rural areas, in the electric industry,
the RUS program is the only mechanism to address the high cost to
serve. The ongoing cost to serve must be supported and aging and
obsolete infrastructure must be replaced and improved.
As the electric utility industry undergoes restructuring and
deregulation, RUS electric borrowers will face greater competition and
uncertainty. This is particularly true of generation and transmission
borrowers who, in the late 1970's and early 1980's made large
investments in nuclear generation at a time of high inflation and high
interest rates.
Since President Clinton appointed me as Administrator of RUS,
working with the very able and competent RUS staff, I have made every
effort to work through these problems. Where necessary, this has
included working with the Department of Justice to resolve serious debt
situations. There is no doubt that it would be easier to sit back and
take no action. However, we have an obligation to manage the RUS loan
portfolio, and to that end will continue to aggressively seek solutions
that result in maximizing recovery of Federal loan funds.
Electric program budget
For 1998, the President's Budget requests $400 million loans for
municipal rate electric loans, a $125 million for 5 percent hardship
loans, $300 million for guarantee of direct FFB financed loans. The
1998 budget request reflects no change from the loan level of $825
million available in 1997. These program loans are financed with a
total budget authority of $29 million. As in the telecommunications
program, RUS is requesting budget authority in a single amount for
maximum flexibility in using funds for programs with the most need.
conclusion
The Rural Utilities Service has had the opportunity to be at the
vortex of change in two of the Nation's most important industries--
electricity and telecommunications. Each of these industries generate
revenue of approximately $200 billion a year and both are evolving from
a regulated monopoly to a competitive environment. Each of these
industries define who we are as a nation and how we move forward into a
global economy.
Rural America is challenged by distance, density and economies of
scale. The facts focus the issue--rural America, 80 percent of the
landmass and 20 percent of the population. Serving rural America simply
costs more per person than serving urban and suburban America and
therefore, the market creates an access, quality and affordability
disparity between rural and urban and suburban areas. This disparity is
the rationale for the concept of universal service.
A concept which holds that all Americans are part of our nation and
all Americans are entitled to the opportunity to make the most of their
natural abilities and the opportunity to join with each other, as a
nation, in our relationship with the rest of the world.
It is this issue--universal service, coupled with universal
opportunity, and ultimately what kind of country we are--which defines
the issue of rural infrastructure.
The Congress debated the universal service issue last year in the
Telecommunications Act of 1996. In that debate we asked how does a new
competitive environment affect universal service? Will serving rural
residents still cost more than serving urban and suburban residents?
How do we make service affordable for rural residents? How will it
affect rural America? The answer was clear--universal service must be
preserved and strengthened. Rural America must not be left behind.
Rural areas should be supported by the system as a whole.
The question of funding rural infrastructure through the Rural
Utilities Service asks the same basic question--the question of
universal service. And the answer is the same as in the
Telecommunications Act of 1996. Universal service support is part of
who we are as a nation. The access to capital, standards, affordability
equalization, and lending leadership is needed more than ever. As we
move from a monopoly to a competitive market place, and as that
transition takes place, the need is much greater, not less, than ever.
______
Prepared Statement of Jan E. Shadburn
Mr. Chairman and members of the Committee, thank you for this
opportunity to testify today on the President's fiscal year 1998 budget
proposal and the accomplishments and goals of the Rural Housing
Service.
The Rural Housing Service, succeeding the Farmers Home
Administration, provides opportunities to rural families which help
them improve their standard of living, move out of poverty and build
for the future. We enable rural communities to enhance the quality of
life of their residents and to strengthen their economic
competitiveness. We accomplish this mission by providing rural people
and communities with: access to credit--which, as you know, is often
limited in rural areas; subsidized loans and rents; and technical
assistance and support to complete their community development efforts.
The Rural Housing Service operates several housing assistance
programs that provide decent, safe and affordable rental and home
ownership opportunities to a wide variety of Rural Americans. RHS also
administers the community facilities direct and guaranteed loan and
grant programs which provide funding for essential facilities such as
health care centers, fire stations, municipal buildings and day care
centers. These facilities allow rural communities to provide an
improved quality of life for their citizens and remain competitive in
attracting jobs and businesses. We deliver these programs and the
necessary technical assistance through a network of state and local
offices, many of which are or will be collocated with other USDA
agencies in USDA Service Centers.
Too many times we talk about the number of housing units, the
square footage or the payment with the associated subsidy cost. We lose
touch with the final product in the blur of our daily work--that
product is a chance at the American dream for thousands of poor working
families. That product is the result of the efforts of this Congress
and USDA, which gave an opportunity to a family or a community. The
investment has paid off thousands of times, both for the individuals
and communities and for the federal government. The rewards continue to
grow.
While we have provided this assistance for many years, we now also
focus on four goals: Reinventing government; developing a range of
partnerships and leveraging opportunities; creating budget savings for
the taxpayers; and expanding access to our programs across rural
America.
I would like to update you on our efforts on these four goals and
our modifications to the Section 515 Rural Rental Housing Program, but
first I would like to share with you the impact of housing and
community facilities programs on the broader range of issues which
concern this Congress. These issues include moving individuals from
welfare to work, containing health care costs, providing an adequate
start to children to improve their opportunities in life and improving
the competitiveness and stability of the rural American economy.
Although the Rural Housing Service finances the physical
construction or rehabilitation of housing and community facilities, the
impact on the community and the individual goes far beyond the tens of
thousands of construction and related jobs, the millions of dollars
generated each year in building and associated trades, the more than $1
billion boost in state and local taxes and the actual physical shelter
provided. Our assistance literally allows individuals, families and
communities to turn their lives around and to start to become self
sufficient. Let me just give you a few examples.
Some of the worst housing in the country is experienced by
farmworkers. The horrendous housing conditions that some of these
workers endure cause so many other problems, particularly for the
children. I would like to share with you how one family near Madera,
California credits RHS' farm labor program with providing them the
opportunity to have a decent life and a future.
Three years ago, a young farmworker and his family were sharing a
substandard, one-bedroom house with another family. The father worked
very hard in the fields, but the high cost of child care prevented the
mother from finding a job. It seemed that the children in this family
had dim prospects of a better life than that of their parents--that is,
until the family was able to move into the RHS-funded la Casa de la
Vina farm labor housing complex, located adjacent to the grape fields
which the father helps to cultivate. The eldest child attends a nearby
elementary school and the middle child attends the Head Start program
located in the la Vina development. These children have stability, a
decent home, and good educational opportunities, all of which seemed
out of reach just three years ago. And the mother now feels
sufficiently secure about her children's safety and her housing that
she has started to work in a local produce-packing plant. This is just
one example of the thousands of hardworking, low-income American
families whose housing conditions--and therefore quality of life--have
dramatically improved through participation in the RHS Section 514/516
Farm Labor Loan and Grant Program.
I would also like to tell you about what a difference in people's
lives our Mutual Self Help Housing Program has made. This program, in
conjunction with our Section 502 Direct Loan Program, allows groups of
six to ten families to build homes for themselves by contributing sweat
equity. Each family works on every other family's house until every
house is done. Only then may the families move into their new homes.
The process lasts about a year, and it's easy to see how by the end,
the families have built not only their homes but also a tight
community. Billy and Debra Blackmon offer a compelling example of how
these programs have brought prosperity and a sense of togetherness to
the people in one rural Florida town. In 1986, Mr. Blackmon was working
hard at his $6 an hour job, but he never seemed to get ahead. Today, he
is a certified electrician with his own successful business, and he
credits his participation in the Self Help Program with enabling him to
achieve that goal. Mr. Blackmon is giving back some of the opportunity
the government gave him: today he hires young men from the local area
to work in his business. He teaches them electrical skills and he
mentors them, encouraging them to complete their education and to
participate in society. Some of his employees who were considering
dropping out of school are now on the honor roll. Mrs. Blackmon is
giving back as well: she started her own day care program, thereby
raising the income of her family and providing quality, affordable day
care to her neighbors, who in turn are now able to return to work. As
you can see, in the process of moving themselves out of poverty, the
Blackmons have become community leaders and role models. Just ten years
ago, they were living in a one-bedroom structure that got soaked every
time it rained. Now, they and their children live in a lovely home they
built with their own hands. Thanks to the Self Help Housing Program,
their kids have opportunities that were unimaginable a decade ago, and
their community is turning around.
As you are aware, the effort to move families off of welfare and
into work requires the availability of affordable quality day care,
which is often more limited in rural America. This can present a real
barrier to a family who is trying to move out of poverty. RHS'
community facilities programs can be used to finance both adult and
child day care and RHS is working hard to ensure that communities can
utilize this resource. I would like to share with you how RHS'
financing of the ``Time for Tots'' child care facility in Harlan, Iowa,
has impacted so many residents' lives and supports your efforts to move
families from welfare to work.
``Time for Tots'', financed by a direct community facility loan,
opened in 1993 with a license to care for 113 children. According to
Nancy Gessmann, general manager of Communications Data Service, Time
for Tots benefits her business because ``. . . workers are more
dependable and absenteeism is reduced by as much as 50 percent.''
Harlan resident Mary Marco stated that ``my entire life has blossomed
as a result of Time for Tots.'' Ms. Marco, a single working mother of
four, always struggled to provide her children with a safe and stable
day care environment. But before Time for Tots, there was no affordable
day care in Harlan, and Ms. Marco had no alternative but to move her
children from sitter to sitter and relative to relative. And still she
sometimes had to stay home from work to look after them. Of course, Ms.
Marco's absenteeism prevented her from moving ahead in her job. She
worried that she would have to go on welfare to make ends meet. But
after Ms. Marco enrolled her three youngest daughters in Time for Tots,
her income stabilized, and with a loan from our agency, she was able to
move her family from a rented, two-bedroom apartment into her own
three-bedroom home. Because of Time for Tots, Marco and her children
have a better future. They and other Harlan families are able to stay
off welfare, and Time for Tots' affordable, high quality child care has
given many families the resources they need to move from welfare to
work.
Rural America has seen tremendous progress from these investments.
As a result, many of these communities are more competitive and stable,
additionally many more families are contributing to the local tax base.
Child care facilities and self help housing communities are pulled
together by grass roots efforts of the local people. Children are
healthier, doing better in school, gaining self esteem by having the
pride of showing a friend where they live. This is the real story.
However, we must recognize the task still to be done. Rural areas
continue to have high poverty rates and over 2.3 million substandard
homes. Many communities lack the essential community facilities such as
child care centers, fire stations and access to health care that not
only impact the quality of life but also make it more difficult to
attract and retain businesses. And we cannot expect a community or a
family to become self sufficient if the economy is not thriving.
However, we also cannot expect a family to be able to hold down a job
and stay off of welfare if they do not have a decent and stable place
to live. A permanent address and a decent place to live provide the
stability that a worker needs to obtain and maintain a job and that a
child needs to be successful at school.
Over the last two years, we have outlined our reinvention and
partnership efforts to this committee. I would like to review those
efforts and lay out our plans for the future to help achieve our four
goals: reinvention, partnerships and leveraging opportunities, budget
savings and expanding access.
Let me first discuss reinvention. As rural America changes, so does
the Rural Housing Service. Our reinvention efforts in the Single Family
502 Direct Loan Program, under the leadership of the Vice President's
National Performance Review, are a great success and have set the
standard for future efforts. We recognize that as we work together to
balance the budget, we must use automation and modern technology to
increase our efficiency, improve our customer service and cut costs.
The reinvention of the Section 502 Single Family Direct Loan
Program includes three components:
--The reduction of regulations by over 90 percent from 290 pages to
30 in the Code of Federal Regulations and the production of a
user friendly handbook for our field staff and partners.
--The reduction in the cost of the program by over 30 percent,
reducing the subsidy rate by squeezing out excess costs. As you
know, this change was accomplished in fiscal year 1996.
--The implementation of the Dedicated Loan Origination and Servicing
(DLOS) System, strongly supported by this committee. The DLOS
initiative includes two components--the automation of our loan
origination and servicing functions, and the establishment of
the Centralized Servicing Center (CSC) in St. Louis to service
an $18 billion portfolio of almost 600,000 borrowers. The DLOS
Initiative will allow us to satisfy the Congressional mandate
to escrow for taxes and insurance.
The Agency purchased a commercial off-the-shelf software system
directly from the private sector with modifications to meet unique
program requirements. Our borrowers will experience the best of both
worlds by receiving the finest servicing the private industry has to
offer today while still participating in Congressionally mandated
``supervised credit'' services delivered locally by our field staff.
These services, unique to the 502 program, offer lower payments based
on income (payment assistance), moratoriums and work-out agreements
which allow our borrowers to preserve their homes through economic or
financial difficulties. The automation and centralization efficiencies,
the reduction in staff and the improved servicing of the portfolio will
result in a savings to the taxpayer of $250 million over five years
(1996-2000) and $100 million a year thereafter.
The Administration laid out a plan three years ago which stated
that we would complete conversion to a centralized system by the end of
fiscal year 1997. On October 25, 1996, Secretary Glickman traveled to
St. Louis, Missouri, to kick off the Centralized Servicing Center, to
announce that this goal has been achieved and to present Vice President
Gore's Hammer Award to the staff who have worked on this initiative. We
are proud of our staff and our efforts. This is truly a reinvention of
our business. The conversion of the portfolio is proceeding in seven
phases and will be completed on schedule by September 1997.
This year, we continue to build on our reinvention efforts by
focusing on our Multifamily Housing Program. We are streamlining
regulations and increasing automation. We hope to create a dramatically
reduced, common-sense, non-bureaucratic set of regulations that eases
the burden on our borrowers and our staff. We are confident that the
result will be better administration of our programs and protection of
our aging portfolio.
We are also working hard to maximize our use of technology. For
example, we are now posting those community facilities direct loans
that are eligible for refinancing with private sector credit on the
Internet so that private financial institutions can discuss refinancing
opportunities with these borrowers.
I would also like to share with you our efforts to increase and
build partnerships and leveraging opportunities which expand our
limited resources, ensure that as many dollars as possible are directed
into rural communities, and build private, nonprofit and other public
sector participation in local rural development efforts, increasing
their likelihood of success.
The goal of the President's National Partnership for Home Ownership
is to provide home ownership to an additional eight million Americans
by the year 2000. In support of the President's Initiative, we have
increased our efforts to cultivate partnerships throughout the states.
Three of these new partnerships have been especially successful, and I
will tell you about them now.
First, we formed the Rural Home Loan Partnership in June of 1996.
RHS joined the Rural Local Initiatives Support Corporation (Rural LISC)
and the Federal Home Loan Bank System to create and deliver a new
single family mortgage product to enable families below 80 percent of
area median income to achieve home ownership. RHS provides a fixed-
rate, subsidized mortgage to cover a portion of the cost of a house,
while a local bank provides financing for the remaining portion.
Private non-profit community development corporations (CDC's) identify
and counsel eligible borrowers and aid in the development of affordable
housing opportunities. This counseling is often critical to the long
term success of the homeowner. This partnership brings a new player--
The Federal Home Loan Banks--into leveraging with the 502 direct loan
program. RHS' partnership with the community development corporations
helps direct resources to very needy areas, leverages technical
assistance and builds a long lasting partnership to accomplish other
rural development initiatives. This product was demonstrated in nine
states, and eight new partnerships are being formed this year. The
states involved in this partnership include Alabama, California,
Florida, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota,
Mississippi, Nebraska, New York, Ohio, Pennsylvania, Texas, Washington,
and Wisconsin.
Second, RHS is also partnering to ensure home ownership education
is available in rural America. RHS is working with Fannie Mae, Freddie
Mac, the Housing Assistance Council and Rural LISC to help build a
rural network and support for home ownership education which typically
involves a series of classes to instruct potential homeowners on
credit, budgeting, savings, home maintenance and the basic ABC's of
owning a home. Numerous indicators have shown that home ownership
education reduces delinquencies and increases the long term success of
the borrower. However, as with so many other support services and
assistance, rural residents are often at a disadvantage in accessing
these resources.
In addition to these new initiatives, one of our most successful
partnerships, the Mutual Self Help program, also supports the
President's home ownership goals. The Self Help program provides grants
to nonprofit organizations and municipalities to organize and provide
technical assistance to groups of families who work cooperatively
together to help build their own homes. The sweat equity built up by
the borrowers means these families--and the federal government--can get
more house for less debt. The families are able to achieve the American
dream of home ownership and start out with significant equity and
greater commitment to their neighborhoods. Activity and interest in
this program has increased tremendously in the last few years. In
turning around borrowers' lives, the Self Help program brings together
not only the contributions of the borrowers but also those of federal,
state, local, private, and nonprofit organizations, all of which are
committed to the goal of making home ownership a reality for low-income
Americans.
RHS' loan guarantee programs have brought increased numbers of
financial institutions into partnership with the Agency. Over 1,600
partners now participate in the Section 502 guarantee loan program.
This program serves low and moderate-income residents that fall under
80 percent of the median income. Additionally, in fiscal year 1996, the
agency implemented a demonstration of the Section 538 multifamily
guarantee program. We plan to approve approximately $13 million in new
loans for fiscal year 1997.
In the Section 502 direct program, we have encouraged leveraging,
which utilizes our direct loan funds in partnership with another
lender's funds. We take the second lien on the property, with the
private sector lender or housing finance agency in first position. The
states have been creative in establishing a wide variety of partners
across the country. In fiscal year 1996 we leveraged almost 15 percent
of our low-income 502 funds to increase home ownership opportunities to
almost 1,600 families who would not have been served without this
effort.
In the 515 multifamily housing program, we increasingly employ
partnerships with state housing finance agencies, CDBG and HOME funds,
the private sector and local community organizations. This has allowed
RHS to reach larger numbers of low-income tenants with limited budget
authority.
In the community facilities programs, RHS has leveraged over 50
percent of its funds, with state, local and private partners. RHS is
developing a new partnership with HHS and Rural LISC (Local Initiatives
Support Corporation) to expand the number of child care centers in
rural America and demonstrate a variety of financing models.
RHS' third goal is to ensure access to our programs by all eligible
residents and communities across rural America. Under Secretary
Glickman's leadership, the Rural Housing Service is continuing its
outreach to underserved communities and populations and its efforts to
comply with both the letter and spirit of the civil rights and fair
housing laws. Let me give you a few examples of our activities in this
arena.
Native Americans are among the poorest housed groups in America and
mortgage financing has not been widely available on Tribal lands. In
1995, USDA and HUD jointly conducted a series of home ownership
conferences to enhance opportunities for lending on Native American
lands. One result of these conferences is a comprehensive guide for
Rural Development staff called ``Lending on Native American Lands.'' In
addition, RHS is working closely with Fannie Mae and several Tribal
councils to better serve Native Americans' housing needs. Fannie Mae
has agreed to a pilot program in which Fannie Mae will purchase RHS
guaranteed loans made on tribal lands.
RHS has also improved the quality of life on tribal lands by
expanding the use of the Community Facilities programs by Native
American communities. For example, using a combination $825,000 direct
community facility loan and a $675,000 guaranteed community facility
loan, the Navajo Nation and the Foundation for Hospital Improvements
were able to improve the medical compound at Ganado by building a new
surgical wing, replacing the obsolete natural gas service line, making
necessary repairs, and building housing for medical personnel.
RHS has worked hard to ensure that all of our borrowers and staff
follow the Fair Housing Laws. We incorporated a significant Fair
Housing training component at all national housing training meetings
last year. We are finalizing a Memorandum of Understanding with HUD on
how to manage Fair Housing complaints. We have also significantly
improved our annual Congressional Report on Fair Housing and RHS
Beneficiaries by using more meaningful indicators of our progress.
RHS has been promoting outreach activities to historically
underserved customers. This activity includes home ownership among
women by participating in the Home Ownership Opportunities for Women
(HOW) partnership, one of 58 national partners in the President's Home
Ownership Initiative. HOW is undertaking an initiative to bring
national home ownership rates for women to the same level as those for
men.
Doing more with Less: RHS has accomplished a great deal in
reinventing government, in creating and expanding partnerships and in
expanding access to our programs, and we have also made a significant
commitment to help balance the budget. In fiscal year 1996, RHS cut the
cost of the single family direct housing loan program by over 30
percent. Our Centralized Servicing and DLOS Initiative is saving the
taxpayers $250 million dollars over five years (1996-2000). RHS has
proposed a legislative change to the Section 515 program. This change
will reduce the subsidy rate by approximately 8 percent. Even though
there is a significant demand across rural America, we have held our
request for rental assistance constant, increasing it only to take on
the added responsibility of converting some rural area Section 8 units
to USDA rental units. Finally, RHS' Servicing Initiative has reaped
tremendous savings for the government. Our single family housing
delinquency has fallen by over 3 percent from fiscal year 1996 and is
at the lowest rate in over twenty years.
Finally, I would like to provide an update on our Section 515
Direct Multi-family Rental Housing Program. The Section 515 rural
rental housing loan program is a vital program that provides decent and
affordable housing to families, disabled and elderly individuals whose
annual income averages about $7,300 dollars. No other federal program
reaches into remote rural areas to provide affordable, safe and decent
rental housing. We have made great strides in strengthening our
management and oversight responsibilities in our Section 515 program.
We have made over 100 administrative changes to improve performance and
reduce fraud, waste and abuse. Changes include the establishment of a
loan classification system which will enable us to improve our
management and monitoring of the portfolio and reduce costs by
improving the focus of our servicing. In addition, we have continued
over the last four years to strengthen our debarment activities against
developers and management companies which have abused the program.
These management improvements complement the reforms to the Section
515 program initiated by the Committee and passed by Congress in the
1997 Appropriations Act. The Department has worked diligently since the
law was enacted to expedite the implementation of these reforms. RHS
has worked extensively with stakeholders representing for-profit and
non-profit developers as well as housing advocacy groups, state housing
finance agencies and other interested parties to develop the
regulation.
We believe we have a regulation which is workable and meets the
intent of the law. The regulation is now in final clearance, and the
Department is planning to publish an Interim Final Rule in the Federal
Register on March 31, 1997 to implement these legislative reforms. As a
result of the Congress' and the Administration's efforts to improve the
515 program, we have a healthier and safer portfolio today. The
tenants' and government's interest are protected.
Before we provide the specifics of the budget request, let me
reiterate the importance of RHS' housing and community facilities
programs in creating strong rural economies and enabling rural families
and individuals to have a decent quality of life and a fair shot at the
American dream.
Now I would like to highlight the following points from the 1998
Budget proposal.
For section 502 direct single family housing loans in 1998, we are
requesting a loan level of $1 billion. This is the same level as was
authorized in the 1997 Appropriation Act. However, after the Act was
signed into law interest rates were higher than projected so $83
million in budget authority only supported $585 million in loans. The
budget authority increase from $83 million to $128 million is necessary
to maintain a $1 billion loan level for fiscal year 1998. For the
Section 502 guaranteed loans, we are requesting a loan level of $3
billion. This level is $300 million more the 1997 level but only costs
$690,000 more in budget authority over fiscal year 1997.
We have also proposed legislation to permit the use of Federal
guarantees to help graduate current direct loan borrowers to private
credit. The Rural Housing Service is aggressively encouraging our
direct Section 502 borrowers to ``graduate'' to private sector credit,
particularly in this low interest rate environment. However, many of
the borrowers do not have sufficient equity to graduate and qualify for
conventional credit. Further, they are statutorily prohibited from
graduating to our guaranteed program. The President's 1998 Budget
requests an authorization of a $100 million for graduating direct loan
borrowers into the guaranteed program, at an appropriated subsidy cost
of only $20,000. The Department will also submit a legislative proposal
to remove the statutory prohibition.
In the section 515 multi-family housing loans, a loan level of $150
million is requested for 1998. The loan level request for housing
repair loans (Section 504) is $30 million. For domestic farm labor
housing loans we are requesting $15 million. These and the two smaller
loan programs for housing site development are requested at about their
current 1997 levels.
The budget authority appropriation requested for the housing loan
programs is $225 million, about $34 million higher than in the 1997
appropriation.
An increase of $16.8 million to $540.9 million is requested for
rural rental assistance in 1998. In addition, RHS is requesting an
increase of $52 million to assume HUD's expiring Section 8 contracts in
RHS financed projects. These contracts, which service Section 515
developments, can be more economically managed in the Section 521
Rental Assistance program, creating savings for the taxpayer.
The housing grant programs are being requested for 1998 under the
Rural Housing Assistance Grants Program. Within this program, our
requests include $10 million for farm labor grants, $24.9 million for
housing repair grants, $26 million for mutual and self-help housing
grants, and $10 for housing preservation grants. The supervisory and
technical assistance grant program and the compensation for
construction defects grant program will continue to operate in 1998
with small amounts of carry-over funds which will be available.
The community facility program request is included in the proposed
Rural Community Advancement Program. Within that overall program, we
project that $209 million will be available for direct community
facility loans and that another $209 million will be available in the
guaranteed loan program. About $9 million is proposed for community
facility grants. The appropriation requested within RCAP to support the
community facility programs is $28 million for 1998. This is $9 million
more than is available for 1997.
For administrative expenses, the Budget requests $413.6 million.
This is a $13.3 million reduction from 1997 which reflects the
centralization of single-family housing loan servicing.
______
Prepared Statement of Dayton J. Watkins
Mr. Chairman and members of the Committee, I am pleased to present
the Administration's fiscal year 1998 budget for the Rural Business-
Cooperative Service (RBS).
Rural Business-Cooperative Service is a component of the Rural
Development Mission Area and has made significant contributions to
enhance the lives of rural Americans. Like our counterparts, we share
the belief that a strong rural America requires an investment in
people, education, technology, health care, infrastructure, and social
and community affairs. These investments will enable rural Americans to
continue advancing in the economic mainstream of this great nation and
help them build sustainable rural communities. RBS significant
contribution to this effort has been in our ability to make our
resources available to rural Americans. These resources build
partnerships within these communities which leverage public, private,
and non profit resources to stimulate economic growth. New jobs paying
higher wages will be created and they will maintain the current ones.
It means positioning rural residents to be able to meet the needs of
their individual families for basic necessities. This can be
accomplished by allowing rural residents to have income to pay for
educational expenses of their children, family's housing needs, and to
enhance their personal pride and self-esteem. It also means being able
to meet the credit and financing needs of rural business owners who are
unable to find them from other sources. It means helping the new
entrepreneurs implement their dream of owning and operating their own
businesses. Besides helping agricultural producers analyze alternative
business forms, like cooperatives, which may offer them greater
economic opportunities than currently offered by the marketplace in
this highly competitive environment. Each of these efforts will touch
rural America. Our responsibility is to provide efficient access to our
programs so that rural Americans can maximize the benefits that will
result.
At Rural Business-Cooperative Services, we strive to enhance the
quality of life for all rural Americans by assisting rural business
owners and new entrepreneurs to develop businesses that are sustainable
and provide a product or service which consumers demand. We assist
these businesses in providing employment for local residents, owners
and their families. We help them identify new opportunities and markets
for their goods and services. These commitments help improve the
performance of rural businesses consistent with efforts to reduce the
size of the Federal government and balance the Federal budget. Even in
this environment we must still provide efficient services to rural
residents. One of our objectives is to use this opportunity to be
creative in developing new concepts and approaches to serve our
customers. To ensure that rural Americans continue to have access to
our programs and services, we are developing new and exciting
initiatives. These initiatives will focus more resources on
individuals, businesses, and communities that have not traditionally
participated in our programs. By doing this, we can be instrumental in
increasing the contribution made to the overall growth of rural America
by putting under utilized resources to better use. This is consistent
with the overall goals and objectives of the Rural Development mission
area.
To meet our goals, objectives, and the growing demand for our
services and resources, our strategy is to increase strategic alliances
through creative partnerships with other Federal Departments, other
agencies of USDA, corporate America, educational institutions,
nonprofit organizations and others. Together, we can leverage resources
to maximize their availability to rural America. Through strategic
alliances, we can serve more people and communities because more
organizations are available to serve them. Let me highlight an example
of a completed strategic alliance and others currently in the
developmental stages.
--Signed a Memorandum of Understanding (MOU) with the United States
Army to assist with the Armament Retooling and Manufacturing
Support (ARMS) Initiative. This initiative will use the
ammunition manufacturing facilities on closed military bases as
a catalyst for community economic development and business
opportunities. Our role is to utilize our staff expertise in
underwriting business loan guarantee transactions for
businesses locating on these bases. We are also:
--Working with the Department of Treasury and the newly created North
American Development Bank (NAD Bank) to develop an MOU to carry
out the Community Adjustment and Investment (CAI) program under
the North American Free Trade Agreement (NAFTA). RBS will be
instrumental in simplifying some programmatic and
administrative services needed to process applications for
Business and Industry Guaranteed Loans, loan recovery, and
provide other services to the CAI program.
--Developing expanded opportunities for women business owners to gain
access to our programs so they can increase their business
activities. Discussions are underway to expand opportunities
for rural businesses owned by women to expand into
international markets. This initiative will result in a
strategic alliance with the Department of Commerce, Trade
Development, International Trade Administration. This will open
up opportunities for women business owners who will expand
their business activities in rural communities and employ more
rural residents.
--Developing a partnership with USDA's Cooperative State Research,
Education and Extension Service and the Department of
Commerce's National Institute of Standards and Technology to
collaborate on developing new technology for manufacturing in
rural communities. This will begin to revive the manufacturing
sector which has been so valuable to rural communities in the
past.
--Developing a partnership with the U.S. Small Business
Administration (SBA) to include information regarding our
business and economic development programs in their Business
Information Centers (BIC) computer data bases. Our initial
effort will focus on some 21 centers on Native American
reservations.
--Increasing our assistance to small farmers to help position them to
compete in the competitive global agricultural environment. Our
attention must focus on resources to organize small farmers
into cooperatives and enhance their economic competitiveness
advantages domestically and internationally. Unless they
organize them into some form which provides economic
opportunities, they will continue to struggle to remain
competitive. We consider this assistance to be part of the
producers' safety net necessary particularly, due to the
elimination of the traditional commodity programs. We are
witnessing examples of how farmers are turning to cooperatives
to respond more to a market oriented agriculture. For example,
after the wool and mohair program was discontinued, sheep and
goat producers throughout Texas and the Southwest began to
organize new cooperatives to market meat and fibers.
These are a few of the strategic relationships we are encouraging
throughout the rural business arena which will have a direct and
positive impact on the growth of rural communities.
RBS is also very conscious of its customer service image and the
types of services we provide to rural Americans. We continue to rethink
and evaluate our programs and the way they are delivered to serve our
customers more efficiently. Our goals are to reduce the cost to operate
these programs for the taxpayers, while improving our service delivery.
Through the enactment of sweeping changes in the Business and Industry
(B&I) Loan Guaranteed program, we have demonstrated that this can be
accomplished.
The recently published business and industry guaranteed loan
regulations are shorter, clearer, and more logically organized. The
material in the new regulations is about one-half that of the previous
regulations. Program changes shift some responsibility for loan
documentation and analysis from the Government to the lenders. This
makes the program more responsive to the needs of lenders and
businesses, and creates easy and fast processing of applications.
In recognition of this tremendous effort, RBS received Vice
President Gore's Hammer Award for our automated application procedure
for B&I lenders. Ten states participated in the user validation
demonstration program for testing this new product. The new system
alleviated some concerns expressed by our customers regarding requests
for repetitive information, and cumbersome and complicated regulations,
forms and agreements. This automated application software is schedule
for release soon and nationwide implementation. In addition, we have
developed a B&I video with a new program brochures and information kit
to use in outreach activities within the states to make the public more
aware of the program.
In expanding visibility of our programs, RBS held a series of
Business Financing Forums with financial institutions around the
country. Participants included members of the American Bankers
Association, Independent Banker's Association, Farmer MAC, the National
Association of Guaranteed Lenders, the National Association of
Investment Companies, and other trade associations. This effort
increased our relationship with the lending community and has
substantially increased program usage throughout the financial
community. Additional efforts are planned for this fiscal year because
of the heightened interests in our resources and capabilities.
Now I'd like to briefly address our program funding request.
business and industry loans
The business and industry loan program guarantees all types of
businesses including those engaged in agricultural production when it
is a part of the integrated operation. These companies create and save
jobs, upgrade the infrastructure, and improve the lives of rural
residents.
Fiscal year 1996 was a banner year for us in rural business and the
best year we have had since the late 1970's. Last year, RBS provided
$638 million in guaranteed B&I loans and was able to provide financial
guarantees to 560 loans to businesses which maintained their existing
employees and often created many new ones.
An example of the types of business and communities benefiting from
the B&I program is the Southern Industrial Mechanical Maintenance
Company (``SIMMCO''). This company was founded in 1977 and is in
Brownsville (pop. 10,019), Tennessee. The company is a leading employer
in the Brownsville community. The 1990's have caused the need for the
automation of the manufacturing process and update of the physical
plant site and equipment. The company performs shut down mechanical
maintenance service for other companies on a contract basis and
manufactures liquid propane gas tanks. These are the two core
operations of SIMMCO.
In order to implement the expansion of the company, United American
Bank of Memphis is providing a loan for $3.1 million with a business &
industry loan guarantee. Funds will be used for expansion of an
existing business. The business will construct and equip a building on
real estate the business owns in Brownsville, Tennessee. The expansion
will help preserve 85 jobs and provide approximately 143 new jobs. Most
of the new job opportunities are expected to come from census tracts
within the Haywood/Fayette Enterprise Community. This loan will also
allow the business to be more feasible in it's L.P. Gas Tank Operation.
The employment rate in the Enterprise Community is 8.3 percent, the
wage rates run as high as $18.00 per hour for such jobs as welding.
direct business and industry loans
Many rural areas lack a competitive capital market, which leads to
inadequate sources of financial assistance, especially for new
businesses. Recent statistics show extensive areas of the country
where, despite outreach efforts, the need for financial assistance for
business development is not being met. This is especially true in areas
with long term persistent poverty, such as the Mississippi Delta; areas
experiencing fundamental structural changes in their economic base,
such as the Pacific Northwest; and areas of long term population
decline, most notably the Central Plains States.
The President's 1998 Budget includes $50 million for B&I direct
loans and to fill gaps that cannot be met through B&I Guaranteed Loans.
intermediary relending loans
The intermediary relending program (IRP) invests Federal funds to
leverage local funds in support of rural businesses and jobs. Loans go
to nonprofit intermediaries who in turn relend them to rural businesses
to improve business, industry, community facilities, jobs, and economic
diversity of rural areas. The program makes investment capital
available to entrepreneurs who cannot otherwise obtain financing from
conventional sources.
Data shows that for every $1.00 lent to an ultimate recipient, an
additional $3.75 of leveraged funding is provided. In fiscal year 1996,
$37.6 million funded 47 loans which resulted in more than $141.3
million of other funds being leveraged. For every $100,000 of program
loan funds, 20-25 jobs are created or saved. It is projected that once
the 47 loans made in fiscal year 1996 have been reloaned (an average of
3.4 times during the life of the loan), these funds will create or save
an estimated 25,000--32,000 jobs over the life of the loan.
An example of how this program is used is as follows: After a
devastating fire, the Route 1 Fashions Retail clothing store in Fort
Kent, Maine contacted the Northern Maine Development Council (NMDC) for
counseling and assistance. The NMDC quickly responded, collaborating
with a local bank and the Town of Fort Kent. The Town packaged a loan
for part of the needed funds from the State of Maine Development Fund.
The NMDC packaged a restructured loan with their bank and an NMDC/IRP
loan. In a short time, the store was back in business and the hole left
by the fire on Fort Kent's Main Street was filled with a new building.
The business could maintain full time jobs that would have otherwise
been lost. The business provides an important addition to the community
and the cooperation shown through this project is a true northern Maine
asset.
rural business enterprise grants
The rural business enterprise grants (RBEG) program finances and
facilitates the development of small and emerging private business
enterprises. This program can be used to finance and facilitate
development of small emerging businesses in the rural areas and
incorporated towns and cities with a population of less than 50,000.
Last year 332 grants for $45 million were made, approximately 3,531
businesses were assisted resulting in the potential for 10,483 jobs
being created and 6,961 jobs saved.
Examples of how the program was utilized are as follows: A storm
ravaged the Maine coast at the end of January 1996, and left two
tugboats that service the port of Eastport inoperable. A rural business
enterprise grant was given to Eastport Port Authority in the amount of
$80,000 to rehabilitate a tugboat which was acquired through the
Federal surplus property program. The Eastport Port Authority and the
Port of Eastport are major employers in the region. The unemployment
rate in Eastport is 13.5 percent, compared to 6.5 percent for the
State. Maintaining viable port operations is essential to the
community. RBS funding saved 70 jobs and there is the potential of
creating 62 other jobs.
In June 1996, a $39,580 grant was made to the Emmonak Alaska Tribal
Council. The grant was made to purchase and install a primary fish
processing line to their processing facility. The new line will do the
initial preparation process of salmon without disrupting the production
process. The new line will add four new jobs to the current 20 seasonal
summer jobs in this remote Alaskan Community. The RBEG was leveraged
with $120,000 in funds from state and local sources.
The Walhalla Rural Health Association received a $50,000 rural
business enterprise grant. This grant was used to purchase medical
equipment such as a portable x-ray machine, ultra sound machine and a
coulter counter which assists in diagnosing serious blood diseases such
as leukemia and anemia. The equipment will be leased to the Walhalla
Clinic's management group (the ultimate recipient) for utilization in
their clinic. The Walhalla community has raised and spent approximately
$20,000 in getting the clinic approved for operation.
rural economic development loans and grants
The rural economic development loan program promotes rural economic
development and job creation projects. These zero-interest rate loans
made to Rural Utilities Service electric and telephone borrowers are
reloaned to provide start-up financing, project feasibility studies,
and other expenses associated with creating business enterprises in
rural communities. Under this program last year we provided funds to 65
electric and telephone systems, which is anticipated to provide zero-
interest loans or grants totaling $13,093,398 to more than 70
businesses, and creating approximately 2,600 jobs.
Baker Electric Cooperative, Inc. received a $400,000 grant to
establish a revolving loan fund. The initial loan covered by the grant
was to the Towner County Hospital Authority in Cando, North Dakota. The
purpose of the loan was to aid in constructing and equipping a new
outpatient clinic and service center to update the existing hospital
facility. The project beneficiaries are the residents of Towner County
and the surrounding counties who will receive health care from the new
hospital and clinic facility. The employees of the hospital and clinic
will also benefit due to the enhanced prospects of retaining the
hospital and clinic.
cooperative services
Cooperative Services (CS) devotes its efforts to promoting the
understanding and use of the cooperative form of business as a viable
option for rural residents. As government support programs are changed
and encouragement is given to more a market driven policy, farm
operators, ranchers and other rural residents are realizing that they
need more effective forms of group action in the marketplace to
represent their economic interests.
Cooperative Services conducts studies, alone or in conjunction,
with other federal or state institutions, to provide farmers with
information on economic, financial, organizational, legal, and social
aspects of cooperative activity. Technical advice assists farmer
cooperatives in the development and operation of viable organizations
to better serve the Nation's family farmers. Educational assistance
provides farmers and other rural residents with a proper understanding,
use and application of the cooperative tool.
The Nation's agricultural sector is currently experiencing rapid
structural changes often referred to as the ``industrialization of
agriculture.'' United States businesses involved in agriculture are
finding it increasingly necessary to have a coordinated or controlled
supply of a narrowly defined raw product. As previously mentioned, we
intend to devote more resources to assisting small farmers in forming
cooperatives. Cooperatives are adapting their structure and activities
to ensure that the cooperative businesses and their independent
producer members remain competitive in this new industrialized system.
The Cooperative Services, through cooperative research agreements and
in-house staff, has an extensive research program that is helping the
agricultural cooperative sector deal with these major structural
changes. This has been especially valuable in the rapid structural
changes of the pork industry. Various research publications have been
developed and symposiums or other types of outreach meetings have been
conducted or are being planned to get the findings of these studies out
to the cooperatives, agricultural producers, and other resource
providers.
Meat goat producers, predominantly small farmers, from Mississippi
and the southern part of the U.S. have experienced difficulties in
gaining access to a profitable market for their livestock. These small
producers depended on individual markets and operated in an environment
with little information, as the industry is in an embryonic stage.
Southern States Goat Cooperative was incorporated with our assistance
in 1996 and held their first auction in June of 1996. The cooperative
is now holding two auctions per month and membership has expanded to
more than 300 producers. As the industry develops, the cooperative will
explore the feasibility of a processing facility.
As another example of cooperative development assistance, the
economy of Smith Island, MD depends on the seafood business including
watermen's harvested catch of crab. Historically, crab picking has been
done in ``out-kitchens'' in each waterman's house. Although Smith
Island crabmeat has always been a high quality product, the ``out-
kitchens'' did not meet the Maryland Health regulations for seafood
processing. The crab pickers are predominately women who were told they
could no longer sell to the public unless the crabmeat was processed in
an approved facility.
In October 1996, the new and approved facility was dedicated.
Cooperative Services helped develop a business plan and assisted the
board and management of this new cooperative improve their operations,
establish a bookkeeping system, review financial performance, and
provided guidance for board decisions. The Smith Island Crabmeat
Cooperative provides a valuable source of income for the island women
and their families.
rural cooperative development grants
The rural cooperative development grants (RCDG) program, formerly
the rural technology and cooperative development grant program, has the
primary purpose of improving the economic condition of rural areas
through the development of new cooperatives and improvement of
operations for existing cooperatives. The RCDG program provides grants
to nonprofit corporations and institutions of higher education to
establish and operate centers for cooperative development.
The RCDG program is used to facilitate the creation or retention of
jobs in rural areas through the development of new rural cooperatives,
value-added processing, and rural businesses. Grants are competitive
and awarded based on specific selection criteria.
appropriate technology transfer for rural areas (attra)
In fiscal year 1997 one-point-three million dollars of the RCDG
funding (3 million) is being used for the Appropriate Technology
Transfer for Rural Areas (ATTRA) program through a cooperative
agreement. This program encourages agricultural producers to adopt
sustainable agricultural practices which allow them to maintain or
improve profits, produce high quality food, and reduce adverse impacts
to the environment. ATTRA functions as a center for information and
technical assistance, staffed with sustainable agricultural specialists
and accessible nationally through a toll-free telephone number. The
ATTRA program was transferred to USDA in fiscal year 1996 from the
Department of Interior's National Fish and Wildlife Service. In fiscal
year 1996 it responded to a record 18,246 request of which 11,810 were
from farmers, and 6,436 from extension, agribusiness, university, state
and federal agencies.
national sheep industry improvement center
The National Sheep Industry Improvement Center will be used to help
build the capacity of the U.S. sheep and goat industries, including
infrastructure development, business development, resource development
and market and environmental research.
The Board of Directors, appointed in January 1997, will operate the
National Sheep Industry Improvement Center. The Center is funded
through a revolving fund account which allows up to 3 percent for
administrative purposes. Initially the National Sheep Industry
Improvement Center's revolving fund was $20 million. Although $30
million is authorized during the next 10 years of the program, no
additional appropriations are requested for fiscal year 1998.
1890 land grant institutions outreach initiative
The Rural Development 1890 Land Grant Initiative involves
cooperative agreements with the 1890 Land Grant Universities and
Community-based Organizations to develop income-producing projects for
underdeveloped rural communities. This effort supports the President's
desire to reach out to low-income, rural communities to improve their
economic conditions. This initiative also supports the Executive Order
to work with Historically Black Colleges and Universities. It has been
funded at approximately $2 million annually for the past three years,
and is included in the salaries and expense account for 1998.
The intent of this project is direct jobs' creation in communities
that are traditionally agriculturally-dependent or other natural
resource-dependent. The land grant universities are among the best
agriculture science and business educational programs in the nation.
These agreements build on the strength of these institutions to ensure
quality education related to small business development and to improve
the quality of life in rural communities.
A notable example involves Michael James and JWH Industries of
Florence, South Carolina. In 1996, Mr. James and JWH Industries had a
faltering worm business. Mr. James requested technical assistance from
South Carolina State University through RBS's, Rural Development
Initiative (RDI).
Prior to his request to RDI, his business consisted of one lone
employee and ten worm beds on a two-acre family-worked site in
Florence, SC. After receiving technical assistance he now has ten acres
in Manning, SC, five acres in Summerville, SC, a five-acre breeding
facility in Trio, SC and another acre in North Carolina. Mr. James now
employs 15 people and tends more than 360 worm beds at his various
sites.
Also, the Japanese have expressed interest in his process of
treating soil with special worms called vermicomposting that he has
developed. Mr. James has developed the knowledge of how the various
worms can enrich the soil, resulting in organically rich compost.
budget request
I would like to highlight the following points from the 1998 Budget
proposal. The primary business and industry programs are requested for
1998 as part of the Rural Community Advancement Program (RCAP). Within
that program, the Budget proposes $660 million for B&I loans of which
$610 million would be for guaranteed loans and $50 million would be for
direct loans. Rural business enterprise grants are also proposed as
part of the RCAP program at a program level of about $40.375 million.
The appropriation needed to support these programs in 1998 is $46.296
million. This appropriation is needed to support the guaranteed loan
and grants program, however, the direct business and industry loan
program is not projected to require any subsidy cost.
Intermediary Relending under the Rural Development Loan Fund is
proposed at $35 million for 1998. This is a slight program level
reduction from the 1997 level. The budget authority appropriation
required to support this activity is $17 million.
Rural Economic Development Loans are proposed at $25 million in
1998. In addition, the request for the rural economic development grant
program is $11.3 million. The Budget proposes that these loans and
grants should be funded from the cushion of credit deposits in the
Electrification and Telephone Revolving Fund, therefore no
appropriation of new funds is needed. The Rural Cooperative Development
Grant Program is proposed at the $3 million level for 1998, the same as
the current 1997 level.
For administrative expenses, the Budget requests $31 million. This
is an increase of $4.6 million above 1997 which is primarily requested
for activities in cooperative business assistance.
Mr. Chairman the Rural Business-Cooperative Service is proud of its
achievements. Through your continued support, we intend to be full
partners in serving the needs and enhancing the quality of life for
residents in rural America. I would be pleased to answer any questions'
you or the other members may have.
______
Prepared Statement of W. Bruce Crain
Mr. Chairman and members of the Subcommittee, I am pleased to
testify today on the President's fiscal year 1998 budget proposal of
the Alternative Agricultural Research and Commercialization (AARC)
Corporation. It is a pleasure to provide you with an update of the
Corporation's investment successes and its real and potential impact on
rural communities.
With the enactment of the 1996 Farm Bill, Congress set in motion
transformational changes in agricultural policy in this country. The
gradual phaseout of commodity support payments means farming must
become more market-driven. To compete in the global marketplace,
America must produce value-added products; we cannot prosper with raw
commodities alone.
In short, American agriculture must be innovative to remain strong
in the 21st century. The AARC Corporation is a catalyst for innovation.
It is a vital link between the development of high value-added
agricultural products and their successful commercialization. It is the
only agency in the Federal government making equity investments in new,
rural business ventures.
Commercializing new products can be an expensive and difficult
process, especially in a rural locale. It can be difficult because
rural areas often lack the financial and other entrepreneurial support
systems concentrated in urban areas.
The AARC Corporation makes what are known as ``seed capital'' and
``early-stage'' investments. It provides the capital resources that
agricultural innovators cannot get from the private sector because of
their high risk. Like private venture capital firms, the AARC
Corporation conducts extensive due diligence on prospective investment
opportunities. Private investors respect the AARC Corporation's
expertise and track record. The 66 companies AARC has funded during its
brief existence will tell you that when they obtain a ``USDA stamp of
approval'' from AARC, it opens the doors to additional financial
resources from the private sector, such as later-stage investments and
debt financing, that are essential to success.
The typical cycle of venture capital investments lasts
approximately 8 years. We do not expect companies we fund to generate
positive cash flow until their fifth or sixth year. The AARC
Corporation, currently in its fifth year of operation, has invested
$28.1 million in 66 projects in 32 states. To date, these investments
have attracted $112 million in additional private financing to projects
in rural communities such as Fontana, California; Ashburn, Georgia; and
Wahpeton, North Dakota--places that do not show up on the radar screens
of money center banks and most venture capitalists. AARC produces a
substantial multiplier effect. Every dollar invested by AARC has
leveraged into $5, money that puts people to work in permanent,
manufacturing jobs in rural communities.
Despite its short history and the time needed for investments to
come to fruition, seven companies have already made partial repayments
to the AARC Corporation. These partial repayments are testament to the
due diligence and investment decisions of the AARC Board of Directors
and their wide array of private sector expertise.
Once an investment is made, the AARC Corporation assists these
companies by marketing their products to the banking and venture
capital communities and to potential buyers of such products, such as
the Federal Government. The AARC staff and Board of Directors have
worked diligently to educate members of the banking community through
speeches, publications, and even satellite feeds to bank officers. In
addition, AARC has visited with the venture capital communities in New
York, Chicago, Los Angeles, and Houston. The responses from these
potential sources of funds have been extremely positive. In fact,
several of the AARC companies have already received follow-on
investments from these contacts that have had a tremendous impact on
the profit potential of these companies. For example, Ariboard
Industries of Texas used the AARC investment to attract $2 million in
equity from Raytheon Engineering. Gridcore International of California
has received follow-on investments totaling $17 million from firms
including Nihon Cement, the largest cement manufacturing company in
Japan. Earthgro of Connecticut was successful in attracting $15 million
in investments from Warberg-Pincus, an investment banking firm. These
and other AARC-invested companies have confirmed that AARC's initial
investment was key to attracting these and other additional investors
into these small, mostly rural-based companies.
AARC works closely with the Small Business Administration (SBA) to
open additional doors for its value-added agriculture manufacturers to
private financing. Through a new arrangement, AARC companies have
access to SBA's new Angel Capital Electronic or ``ACE'' network, a
certified investor network of individuals with net worth of at least $1
million. This new alliance with SBA will further leverage AARC's
investment funds by opening the door to an important source of
potential investment dollars that previously has been difficult for
AARC companies to access.
Section 729 of the 1996 Farm Bill included a provision that allows
Federal agencies to establish set-asides and preferences for products
commercialized with the assistance of AARC. The AARC staff is working
to educate Federal procurement officials about AARC-funded products,
which are all environmentally friendly, and about the authority that
allows them to establish procedures for the purchase of these products.
Access to this huge Federal Government market can greatly enhance the
financial success of AARC-funded companies and their ability to repay
their investments, and the earnings on these investments to the AARC
Corporation.
Based on an analysis of the AARC portfolio prepared by the
Agricultural Utilization Research Institute (AURI) and the Kansas
Technology Enterprise Corporation (KTEC) in 1996, AARC investments have
added on the average 13 times more value to the agricultural raw
products and forestry materials. In addition, AARC investments have
created 5,000 new jobs, mostly in rural areas of the country.
Therefore, based on AARC's current leverage ratio, one job is created
for every $5,000 invested by the AARC Corporation.
To place a more human face on these numbers, I want to briefly
describe one AARC funded company and the difference we are together
making in its community.
Indian Creek Mesquite of Brownwood, Texas, is manufacturing and
selling a mesquite wood product that serves as an alternative to
charcoal. The mesquite is paraffin-coated and packaged in a paraffin-
coated bag which can be ignited without the use of lighter fluid or
other added materials. Mesquite wood carries a negative value due to
the cost associated with removing the trees from pasture land. This
cost averages about $150 per acre.
Because of the added value generated by Indian Creek Mesquite, the
value of mesquite has gone from a negative $150 per acre to over $5,000
per acre. In addition, Indian Creek Mesquite has created 14 new jobs in
the Brownwood area that otherwise would not exist.
With the necessary resources, the AARC Corporation can continue and
even expand its role in creating value-added products and jobs that
benefit rural America. With AARC serving in the capacity of
facilitator, new private sector investment dollars will reach
entrepreneurs that otherwise would not be available. The AARC
Corporation requests $10 million to continue its mission. The AARC
Corporation pledges to work diligently to invest its funds in projects
that add the most value to commodities and rural communities, and work
to locate and expand markets for these new bio-based industrial
products. Based on the Corporation's track record during this short
time, we feel confident in assuring the Subcommittee that these
resources will be used wisely and effectively.
General Questions
Senator Cochran. I apologize for our hearing getting
underway a little late this morning. We had a series of votes
over on the floor of the Senate. Those are out of the way now.
I left before we had our final vote total, but I think we
probably passed the Nuclear Waste Storage Act. We dealt with
several amendments this morning to that bill.
I have a number of questions on a variety of subjects, but
I am not going to proceed. I am going to let my colleague from
Montana proceed to ask whatever questions he has. I know he has
other obligations in other committees in the Senate today.
Senator Burns, if you have questions, please proceed.
Senator Burns. Mr. Chairman, thank you very much. I have
very few questions of this panel, which I think I explained in
my opening statement.
I am struck this morning that a member of the bureaucracy
would walk forward and say I was wrong last year. [Laughter.]
That is highly unusual in this town. And those of you who
are visiting this committee for the first time, you are seeing
history made. [Laughter.]
And not even we admit that we are wrong. [Laughter.]
Mrs. Thompson. Well, I never admitted I was wrong when I
was a Member of the House. [Laughter.]
Senator Burns. So this week has really started off.
I, again, would just want to work with you on the budget.
And I was asking the chairman, on the transfer of money--I
chair Military Construction, and we do ours a little bit
different over there, but I can appreciate how this transfer
has kind of helped you with some versatility to do some things
maybe that have to be done and where it gives you some choice
to make some decisions. And I think you should have that
ability to make those decisions.
We have to trust our managers and our people to make those
calls, and without a lot of fuss being made up here on this
Hill. But I want to congratulate you for your increases in RUS.
I am very much a promoter of that. I think as we deal with
distances and this type of thing, this infrastructure becomes
very, very important to us. And I appreciate the approach that
this budget has taken this year.
And I thank the chairman.
Senator Cochran. Thank you very much, Senator.
We are constrained this year in our budget process by
provisions of the so-called FAIR Act, the farm bill that was
passed last year. It authorizes the Rural Community Advancement
Program. Funding for some of the rural development programs is
to be consolidated under that program.
Budget Request and the 1996 Farm Bill
My first question is whether or not the budget that is
submitted for the review of the subcommittee reflects the
authorities under the farm bill last year, insofar as the Rural
Community Advancement Program is concerned. I know there are
five different subaccounts. There is a ``Rural communities
facilities'' account, ``Rural utilities'' account, ``Rural
business and cooperative development'' account, the ``National
office reserve'' account, and the ``Federally recognized Indian
tribe'' account.
You have the authority under this law, as I understand it,
to transfer the money to the rural development State directors,
then proceed to divide the moneys or allocate the moneys among
the five accounts, within certain limitations, to meet State
priorities. Does the submission that we have before us, Madam
Secretary, take all of that into account? And are the specific
requests for funding in accordance with the authorization of
the FAIR Act?
Mrs. Thompson. I believe that it is. I want to confirm my
response, but I believe that everything is consistent.
Senator Cochran. Maybe Mr. Kaplan can confirm that for us.
Mr. Kaplan. Yes; it is consistent with FAIR Act.
Senator Cochran. In that connection, let me ask whether we
have complicated this or whether the legislative committee in
the Congress, by adopting the FAIR Act, has complicated this,
so that we have a hard time understanding where the priorities
are. I am interested, for example, in rural water and sewer
system accounts. We have a lot of unmet needs in our rural
areas in my State and, I know, generally, throughout the
country. One of the main areas of emphasis has been in trying
to provide the quality of life opportunities for rural
communities that we have in a lot of our urban areas and areas
near the larger cities.
What is the emphasis in this budget request, if you can
tell us, with respect to those traditional programs of rural
development?
Mrs. Thompson. Well, the emphasis is certainly strong with
regard to those programs that serve the three areas that are
covered in the three agencies. The reason that we would like
the additional flexibility that RCAP would provide is that many
times--well, always--as you go from State to State, the needs
are different. And at different points in time, those needs
change.
For example, there may be a community that has a need for a
water system, but funds are insufficient to finance the project
from the water and waste account, but there is funding
available in other accounts and there is no immediate demand.
The transfer of funds and the shifting of funds to best meet
not only the long-term needs, but the short-term needs for each
of the States would be most helpful to our State directors.
Rural Utilities Service
Senator Cochran. One thing I noticed in reviewing the notes
that I have is that the President's budget request proposes a
decrease in the program level funding for direct water and
waste disposal loans. I am curious as to why the administration
made that decision. There are a number of increases, and you
pointed them out, but this is a decrease. Are we at a point
where we do not need funds in this program as we did in the
past? Why would the administration submit a budget that calls
for a decrease in this particular area?
Mrs. Thompson. Well, I am going to defer to Administrator
Beyer to answer in greater detail, but the biggest challenge is
that there are many needs in many areas, and we are very
committed to balancing the budget. And that means that tough
decisions have to be made. Additional money could be spent in
virtually every area and it would enhance the quality of life
in rural communities across the country. But tough budget
decisions have to be made.
Senator Cochran. Yes.
Mrs. Thompson. But let me turn it over to Wally Beyer.
Senator Cochran. Mr. Beyer.
Mr. Beyer. Thank you, Mr. Chairman.
Senator Bumpers. Mr. Chairman, if I may interrupt. How much
is the cut?
Senator Cochran. It is very small, $739 million as compared
with $734 million.
Mr. Beyer. Yes; that is exactly what I was going to point
out, Mr. Chairman. It is very small.
Senator Cochran. I just wanted to verify that I had the
right figures in front of me and that it was a decrease.
Mr. Beyer. There is a decrease in the water and waste
water, but it is very small.
The other thing we are doing is a better job of leveraging
the scarce Federal dollars. We are, in fact, doing that with
States and with private dollars. So we are trying to do the
best job we can in maximizing the budget authority that we
have.
Senator Cochran. There is also a small decrease in the
Circuit Rider Program. This is a program where technical
assistance is provided to small community water associations
and the like.
Mr. Beyer. Yes.
Senator Cochran. What is the assessment of that program? Is
it not providing benefits or is this another small decrease
that simply reflects budget realities?
Mr. Beyer. Mr. Chairman, the Circuit Rider Program is a
very valuable program for rural America without question. It is
simply a refinement. It is not an abandonment by any stretch of
imagination. And here again it is a very, very small decrease.
Senator Cochran. I notice on page 11 of your statement, you
talk about the goals--as we approach the consideration of
legislation here in Congress to deregulate the electric utility
industry--you point out on page 11 that you think there are two
important considerations that we need to keep in mind as goals
that should be part of the development of any restructuring of
this industry. The first is to ensure the continued
availability of reliable, high-quality electric service at a
reasonable cost to rural customers. And the second is to
protect the integrity of the Government's loan portfolio.
I just want to let you know that I share those goals and
congratulate you on thinking about how the Rural Utilities
Service that we have supported here in Congress for a long time
ought to think in terms of the restructuring of the industry.
Does the legislation being considered by Congress, in your
view, meet or achieve those goals?
Mr. Beyer. Mr. Chairman, the Rural Utilities Service is
really at the vortex of revolutionary changes in the
infrastructure in this country, as you know. There is so much
legislation floating around right now and given the
environment, the States' rights environment that we live in, we
are approaching it with a general view of encouraging and
trying to ensure the best we can that quality, reliable
infrastructure at reasonable cost will be maintained in rural
America.
I mean if this thing is going to be open access, and cash
is going to be king, then it is going to be even more difficult
without some congressional help. And you couple that with the
patchwork deregulation that is going on State by State, and it
is a very nervous time for rural Americans in looking forward
to ensure that quality infrastructure is available.
I think Congress has spoken quite loudly--they did speak
loudly in the telecommunications deregulation last year--in
ensuring a rural safety net network. And, second, as we move
through the process of molding a new rural electric
infrastructure, we would certainly encourage Congress to be
very sensitive to a universal service pool concept for the
electric industry as well. We certainly have concerns about
loan security issues.
We have challenges all over the place in various States on
our all-requirements contract, the basic documentations in loan
security. We are working with that as quickly and as diligently
as we can, in assisting borrowers to prepare themselves for
this new, radically changed environment. So we know that your
committee is very interested in this, and we would hope that
you would take a very active role in watching this process
unfold.
Senator Cochran. Well, I think we ought to be vigilant and
keep in mind, as you point out in your statement, that we do
not want to adopt reform legislation and then wake up and find
out that those who live in the small towns and the rural
communities are going to see their rates skyrocket or they are
going to lose service or something like that. That would be
catastrophic. We have to be very careful.
Senator Bumpers.
Senator Bumpers. Thank you, Mr. Chairman.
Mr. Beyer, just to pursue the question Senator Cochran just
asked you, let me say, first of all, that the REA has never had
a stronger champion in the Congress than I have been. Because
you have heard me say many times what it did for the area I
grew up in. In addition to that, it saved my father's business,
because he was a smalltown merchant, and it gave him an
opportunity to sell electrical appliances in rural areas. His
business really began to boom after that. And REA operated out
of the back of his hardware store for years.
So I come to this deregulation thing with considerable
qualms and concerns. But I got into it, No. 1, because I became
ranking member of the Energy Committee, and Senator Johnston
had originally started this, and we all agreed that it was
going to happen. And only if I took charge of it would it
happen in a sane, methodical way. [Laughter.]
But let me just make this point and see if you agree with
it. And I know that the co-ops are the biggest adversaries of
this whole concept. And I understand that. They have all been
in my office, and I am sure will be again and again. And they
have nothing to fear insofar as my power to control this thing
is determined, because I am going to make sure that the
utilities are treated fairly, that they are not all sent into
bankruptcy because of a crazy scheme.
The second reason I got into it, other than being the
ranking member, was that this thing is going to happen whether
we do it here or not. Seven States have already adopted retail
competition, restructuring the electrical industry in their
States--seven. Four more have it under consideration. It is a
very trendy thing. And as I have said in some of my speeches,
the House is probably going to pass this. You have a mix in the
House of liberals who think anything that benefits consumers is
good and you have conservatives who think everything is fixed
by competition. So you have those two forces at work in the
House, which indicate that this thing is probably going to pass
the House this year.
But what I have tried to tell the co-ops and everybody else
is if you allow 50 States to do this on a random, harum-scarum,
ad hoc basis, you are going to wind up terribly sorry that we
did not have a national guideline for this to happen. For
example, Northeast Utilities is suing New Hampshire right now
because New Hampshire is one of the seven States that has
already gone to retail competition, and they have kind of a
convoluted system of allowing people to recover their stranded
cost. That is, if their generators--because of lost customers
to competition--if their generators are no longer economical,
they can go to the State public service commission and say, we
want to recover, we want you to pay us for our own recovered
cost of this generating plant.
And they say that New Hampshire law shorted them the $434
million. Now, I do not want to go into this whole electrical
deregulation thing here. All I am saying is, if you were a
utility operating in three States and you had three States--two
with retail competition and one with none, and you find
yourself in dire straits because of competition, you are not
going to get any stranded cost from the State that has not gone
retail. And on the two that have gone retail, they may have
entirely different formula for determining stranded cost.
Now, it is not just the co-ops, but the whole utility
industry, in my opinion, that would be swamped--absolutely
swamped if that happened. And it is beginning to happen, even
though seven States are all we have that have gone to retail
competition. So, as I say, I understand the concern. I am
concerned about that person in Arkansas, who lives a mile down
the lane, and REA has built a line at a considerable cost of
thousands of dollars to put power down to that house. And I
will not stand--at least I would not vote for it nor support or
speak for any kind of a bill that did not take care of that
customer.
I want to make sure, if this is not good for everybody, it
is not good for anybody, in my book. Hubert Humphrey used to
say that America would never be a good place for anybody to
live until it is a good place for all of us to live. And I
champion that same phrase in connection with electricity.
But while I know the co-ops are very much opposed to this
concept, they are not likely to be exempt. And if they are not
exempt, a national guideline, in my opinion, is going to be
infinitely preferable to them trying to deal with--does REA
operate in all 50 States?
Mr. Beyer. Not today, Senator.
Senator Bumpers. How many States does it operate in?
Mr. Beyer. With your permission, I will have to get back to
you on that. It is the bulk of them. California, for example,
has four rural electrics. And some of the Northeast States. But
that is about it. It is pretty broadly covered.
Senator Bumpers. Do you quarrel with anything I just got
through saying?
Mr. Beyer. Senator, I do not quarrel with it at all. We are
very, very concerned about stranded investment. We are very,
very concerned about reliability into the future. If this thing
is wide open and it is customer choice and you have the ability
to switch consumers, the industrial and commercial customers
are going to be gone first. Because that is where the cash is.
And there is where the power marketers are going to go. That is
where the folks with low-cost generation are going to go.
And there is going to be a switch in consumers. And that is
just going to be a bigger problem. We are very concerned about
the national guidelines. I am speaking for myself now, but I
personally think there needs to be some national guidelines for
this patchwork direction that it is going in.
Senator Bumpers. Well, you are speaking for yourself, I can
tell you that.
Mr. Beyer. I am speaking for myself, Mr. Chairman. I hope
you do not mind that.
And national guidelines would seem to me to be critical in
the interest of reliability. We do not even understand what it
is like to have systems that go on and off. Because when we
turn the switch on in America, something happens. We do not
even think about it. And if we start getting into this
patchwork network, it threatens reliability.
The other thing that we would encourage is some universal
service concept in the electric system, not unlike the
telecommunications. That is entirely doable. It would make a
lot of sense to ensure that rural America has the ability to
maintain quality, reliable, reasonable-cost electric service.
Senator Bumpers. Mr. Beyer, how much money is in the budget
this year for REA for rural electricity?
Mr. Beyer. $29 million in budget authority. And if I may
take this opportunity, Mr. Chairman, that $29 million will
generate $825 million Federal dollars. In addition to that, it
leverages 3 additional private dollars. So about $3.3 billion
will be invested in electric infrastructure in fiscal year
1998. That is a tremendous leveraging of the scarce Federal
dollars.
In fact, we are going to do a piece on the evolution of
leveraging. In my understanding, that is the way government is
supposed to work. You are supposed to get this thing going, and
then you use government to leverage private capital. And that
is exactly what this program has done.
Probably the most value in the electric and
telecommunications program today is the credit support
leverages $3 in investment for 1 Federal dollar.
Senator Bumpers. How about telephone, do you have money in
there for rural telephone service?
Mr. Beyer. Yes.
Senator Bumpers. How much?
Mr. Beyer. The telecommunications is $1.9 million, which
will leverage--actually, the telecommunications program
leverages about 4.3 private dollars for every Federal dollar.
It is a little bit better leveraging in telecommunications.
Senator Bumpers. Those are very small figures. And, of
course, you know one of the things that we still hear around
here from some sources is that REA has outlived its usefulness.
They ought to be cut loose. There is nothing wrong with them
being a cooperative, but they do not need Government subsidies.
What is your response to that?
Mr. Beyer. My response to that is the consideration of
reliability, consideration of continuing need for capital to
constantly improve and replace antiquated systems, to modernize
the system. That is a never-ending process in the
infrastructure. So there will be a continuing need for
infrastructure investments in the years.
Take, for example, the technology in telecommunications. My
goodness, technology is just changing the landscape in
telecommunications. And certainly you have to have a continuing
availability of capital to keep that going.
Mrs. Thompson. If I might also add in response that
virtually all electric utilities are subsidized through the tax
code. The other electric utilities are subsidized through the
tax code. And in fact, per consumer, rural electric users are
receiving a smaller subsidy. That is per consumer.
In answer to your question about the number of States that
have rural electric cooperatives, the number is 46. And let me
also say that I know you would like an official administration
position on some of the legislation that is being considered by
the Congress, and if you would like that, we would certainly be
glad to----
Senator Bumpers. I would like that.
Mrs. Thompson. We will provide that for you, then, on each
of the pieces of legislation.
Senator Bumpers. Yes; that would be very helpful. That is
what I would like for us to have in our record, so we can
consider all these options that we have before the Congress,
with a view toward how they will affect those who live in rural
communities and the small towns of America.
Mrs. Thompson. We will provide for you the official
administration position.
Senator Bumpers. Thank you very much.
[The information follows:]
Legislative policy on electric utility restructuring
includes several departments of the Federal government.
Administration policy is being developed at this time. USDA
feels that two factors are vitally important in any legislative
action that impacts the electric utility industry.
First, the taxpayers expect us to protect the integrity of
the Government's loan portfolio and we take that responsibility
very seriously. The second concern is that ensuring the
continued availability of reliable, high quality service at a
reasonable cost to consumers in all rural areas of the country
is critically important.
Rural Housing Service
Senator Bumpers. Mr. Chairman, just a couple of quick
questions.
Mr. Shadburn, I have language I intend to offer on the
supplemental that would provide some help for the storm-ravaged
part of my State. We had probably the second- or third-worst
tornado season we have ever had. And I will share this language
with you before we offer it. But I would like for the USDA to
be on board with it, because I want some housing assistance for
Arkadelphia in particular, but also especially for College
Station, which is a very, very poor African-American community,
which is a suburb of Little Rock.
And, finally, on housing, Mr. Shadburn, your budget
requests $52 million for HUD section 8 contracts. Why are we
subsidizing HUD?
Mr. Shadburn. Well, Senator, what we are asking for is the
actual transfer of the budget authority from the HUD section 8
contracts that are presently used in our section 515 projects
into RHS 5-year rental assistance [RA] contracts. There are
currently 46,000 HUD section 8 units in over 1,500 515
projects. In an effort to save taxpayers money over the long
run, the administration is proposing this transfer.
For fiscal year 1998, the budget proposal requests
$52,497,000 of rental assistance to replace 3,665 units of
expiring section 8 in 515 projects. Over the next 8 years, the
administration recommended that all 46,000 section 8 units be
converted to RHS RA, provided Congress accommodates the
adjustments to the 602(b) allocations for both Appropriation
Committees of Jurisdiction.
The budget cost for HUD to renew the 3,665 expiring section
8 units for 1 year would be approximately $20 million for 1-
year HUD contracts compared to approximately the $52 million
for RHS 5-year rental assistance contracts. The net cost in the
short term would be higher, but after 3 years there would be
significant saving. At the conclusion of the full conversion in
2005, an estimated $291 million would be saved.
Senator Bumpers. I am not sure I understand that, but my
time is about up. Let me just ask you this final question.
Section 515 rental assistance, that program goes from $16.8
to $540.9 million. Why such a staggering increase? Have we
misread that?
Mr. Shadburn. Yes, sir; I think that the $540 million
figure is consistent with what we have been requesting over the
last several years.
Senator Bumpers. And this year, 1997, you only have $16.8
million in the program?
Mr. Shadburn. No, sir; we have a request in the budget
for--are you talking about in fiscal year 1997 or 1998, sir?
Senator Bumpers. 1997.
Mr. Shadburn. OK, in fiscal year 1997, it is $518 million.
Senator Bumpers. $518 million this year, and you are asking
for $540 million next year. OK, then we just got a bad figure
here.
Thank you very much.
Senator Cochran. Thank you, Senator.
Senator Harkin. Thank you very much, Mr. Chairman.
Mrs. Thompson. May I answer a question of Senator Bumpers
before you ask a question?
Senator Cochran. That is up to Senator Harkin.
Senator Harkin. You can ask a question. I do not know if I
will let him answer it, but you can ask him. [Laughter.]
Mrs. Thompson. Well, I am not sure I heard Jan answer your
question regarding your supplemental language. And maybe he did
and it just slipped. But we have reviewed your supplemental
language, and it is quite acceptable to us.
Senator Bumpers. Good. Thank you very much, Mrs. Thompson.
Senator Harkin. I was afraid you were going to ask him a
question. He has been known to give answers that can go on for
quite a while. And I did not want to get bogged down here in
the middle of the afternoon. [Laughter.]
Alternative Agricultural Research and Commercialization Corporation
Well, guess what I want to ask about, Mrs. Thompson? I want
to talk about AARC. I have been a strong supporter of that, as
you know. In 1987, I introduced the legislation that we worked
on for a couple or 3 years and, with some changes, it was
finally adopted in the 1990 farm bill. That created AARC. It
was a bipartisan effort. Then-Secretary Madigan was a strong
supporter of it. He was then in the House of Representatives.
It is a Government agency that is providing very hard-to-
acquire venture capital for businesses. It is making real
differences in a lot of companies. But the dollars available
are much too limited. I just have a series of questions on the
subject of AARC.
Your statement makes reference to the fact that the key to
improving economies in rural areas is the creation of business
job opportunities. One of the successes you cite is how AARC is
working with the private sector to create new opportunities.
Can you provide a couple of examples of the products that have
been commercialized? And, in particular, what that may mean for
farmers? Can you or Mr. Crain? I do not know--whichever.
Mrs. Thompson. Yes; I would be delighted to answer those
questions, because we have had considerable success in AARC.
And one example is the use of peanut hulls to be converted into
a charcoal that is used in water purification, which then
changes the value of the peanut hull to the producer from a
cost of $7 per ton, I believe, to a positive $300 per ton. That
is, to me, a significant value-added matter.
We have had success, as you know, in the State of Iowa, as
well as other States, with using wheat straw for wallboard. And
it simply increases the demand sometimes for products that are
actual waste. And so it has been a very successful program. It
also means more jobs in rural communities. And so it is really
a win-win program, where the farmer wins because the value of
her or his commodity goes up, and the local community wins
because jobs are created.
Senator Harkin. There are a lot of other examples, I know.
And if you would just provide those for the record, I would
appreciate it.
[The information follows:]
Almost the entire portfolio of products could be utilized
by the Federal government. For example, the U.S. Postal Service
(USPS) is constructing ``green'' buildings around the country.
One facility now being constructed near Dallas, Texas, will
utilize compressed wheat straw walls produced by Agriboard
Industries in nearby Electra, Texas. We believe other AARC-
supported construction materials may also be used in that
building.
The USPS has also contracted with Gridcore Systems
International (GSI) to produce trash cans for use in post
offices. The source of the raw materials used to make the
strong, lightweight honeycomb panels for the trash cans is
undeliverable bulk mail. We support the way the USPS has
endorsed environmentally friendly building products from the
AARC Corporation. We are still talking with USPS about using
other products in the AARC Corporation portfolio in their
course of business.
Gridcore has supplied samples and is also talking with
Unicor, part of the Prison Industries Program, about making
furniture.
Discussions are currently underway with the Pentagon and
several of the AARC building material suppliers to provide
material to renovate and ``green'' the Pentagon. Use of AARC
materials in this multi-year project could have a major
positive impact on these companies.
Phenix BioComposites produces Environ from soybean meal and
waste newspaper. It is a replacement for hardwood and looks
like granite. The Natural Resources Defense Council (NRDC) used
Environ for the counter tops and work surfaces in its new
headquarters built last year, in Washington, DC.
PrimeBoard uses 100 percent wheat straw to produce Wheat
Board, a particle board replacement. This product is being
widely used for manufacturing cabinets, furniture, and
millwork. NRDC's counter underlayment is from PrimeBoard and
its cabinets are also made from Wheat Board.
Seed-based Lubricants.--International Lubricants Inc. (ILI)
produces a line of biodegradable seed-based lubricants--
everything from transmission additives, to all purpose
lubricants, to two-cycle oil to industrial lubricants. Although
the seed-based lubricants are environmentally preferable, these
petroleum replacements face stiff competition from the existing
petroleum-based products. In spite of the competition, some
sales to the U.S. Air Force have taken place. Vegetable oil
based lubricants could also be used with weapons and in the
engines of high-performance vehicles.
The Leahy-Wolf Company uses canola oil as a lubricant for
concrete forms. As the Federal government continues to build
new buildings and renovate old ones, or pours cement in
environmentally-sensitive areas (bridges over waterways for
instance), this product may be specified.
Other Fluids.--Windshield washer fluid produced by Aquinas
Technologies that is made from ethanol would seem to be a
natural for all vehicles.
Absorbents.--There are several products in the AARC
portfolio which will help clean up oil spills. Low value wool
from Hobbs Bonded Fibers has been purchased for use at military
bases in Texas to catch and hold petroleum drips from vehicles.
Two other products show great promise in remediating
hydrocarbons. One is Oil Gator, the Product Services Marketing
Group, which is made from cotton seed lint. It has been used to
remediate spilled petroleum. Kenaf core can also be used to
absorb and remediate hydrocarbons. These products can be used
to clean up spills from existing contaminated sites, not just
new spills. As military properties are being cleaned up, these
products are likely to be considered.
Filter Material.--Scientific Ag Industries makes activated
carbon made from peanut hulls. These products can be used in
water and air filtration systems and can also be used to
remediate soils. It's also cheaper and of better quality than
imported materials.
Soil Amendments.--Many military bases are located in places
with poor soil conditions. Biorecycling Technologies, Inc. is
currently working with the Marine Corps Ground Combat Center at
Twenty Nine Palms, California, to improve soil conditions in
the military housing area, the golf course, and recreation
sites, using a variety of fertilizers and soil amendments
derived from cow manure.
Earthgro Incorporated makes a variety of potting mixes
utilizing plant and animal wastes. These can be used with
interior potted plants and exterior plantings as an ideal
substitute for peat, a finite and imported material, and
petroleum-based fertilizers.
Cleaners.--The AARC Corporation has invested in a number of
environmentally-friendly cleaning products. Interchem
Environmental produces a line of solvents from soybeans
including graffiti remover, paving equipment, tar remover, and
cleaners for printing presses.
Shadow Lake makes Citra-Solv, a multi-purpose cleaner made
from a powerful citrus extract, along with a number of other
natural products--castile soap from essential oils and Air
Scense, an air freshener from essential oils, which absorbs
odors.
MM Manufacturing produces waterless hand cleaner from corn
oil.
Tree-Free Paper.--KP Products uses kenaf, an annual fiber
plant, to produce tree-free, chlorine-free paper.
Starch-based Plastics.--Several AARC-supported companies
produce a variety of coatings and films from vegetable starch.
For instance, StarchTech makes biodegradable packing peanuts,
which replace similar petroleum-based products. The
Environmental Protection Agency has been a major purchaser of
these starch-based peanuts, which dissolve in water.
Forestry Materials.--Indian Creek Mesquite coats mesquite
wood chunks with vegetable based paraffin in a ``Light The
Bag'' application. No starter fluid is necessary. We can report
that sales of this product are brisk in USDA's employee-owned
store located in the sub-basement of the South Building.
Cat Litter.--BioPlus Incorporated products biodegradable,
flushable cat litter from peanut hulls. SSM Environmental
Technologies Inc. uses corn stover, a post harvest residue, as
its base to also produce an environmentally friendly cat
litter.
Senator Harkin. How much money has AARC invested in
companies since its inception? And what additional funding from
private sources is going to these companies? I just want to
know about the leveraging aspects.
Mrs. Thompson. Yes; I have that number here. But Bruce
Crain, the Executive Director, can probably answer that off the
top of his head.
Mr. Crain. Senator Harkin, to date, we have invested $28.1
million and we have leveraged another $112 million of private
dollars. It is about a 4-to-1 leveraging ratio. Now, after that
first leveraging takes place, we have also been successful in
achieving follow-on financing into these companies. We pulled
the data on five companies in which we have invested $3.7
million. And in those five companies, we had leveraged an
additional $57 million of private equity.
That shows us that putting a USDA stamp of approval on
these companies is successful in attracting that all-important
private debt and equity into these companies.
Senator Harkin. Are some of them going public? What is the
likelihood of some of them going public?
Mr. Crain. I think the likelihood is very good that most of
them will go public. When they come to us, we are pushing them
in that direction. Because we want to cash out and exercise our
put option or they can exercise their call option in the fifth
through eighth years. We are probably about 18 months away from
three IPO's, we think, at this stage. But, to date, we are
having a lot of success in meeting with venture capitalists and
investment bankers in New York and other States in areas that
are coming in behind us with these dollars. And we are finding,
like I said, that USDA stamp of approval is making a
difference.
Senator Harkin. What is the average length of time for
companies acquiring venture capital funds to really kind of get
up and get going and get in the private sector?
Mr. Crain. Based on the data we have gathered from venture
capital experts, it takes about 5 to 6 years for a company to
experience a positive cash flow. AARC made its first
investments in 1993. That means, next year, 1998, would be the
first year we would really be expecting significant returns.
We structure our deals where we are going to get four to
five times our money back in the form of a risk premium for our
investment. So we are confident that we can meet that schedule
and it will produce significant returns.
Senator Harkin. How much funding do you believe AARC could
effectively spend in fiscal year 1998? This is the
Appropriations Committee; how much money do you think you could
effectively spend?
Mrs. Thompson. Well, I actually think that it is almost
unlimited. It depends on only the creativity and the initiative
that is out there. And there is considerable creativity and
there is considerable initiative in rural communities. So I
think that it is almost open ended.
Senator Harkin. How much did we have in the Appropriations
Committee last year?
Mrs. Thompson. I believe it was $7 million.
Senator Bumpers. If anybody knows the answer to that
question, it is him. [Laughter.]
Senator Harkin. I am just making a record.
Mrs. Thompson. Do you think he just wants me to have this
in the record? [Laughter.]
Senator Harkin. Stick around and you will hear it more.
Because I think this is where it is. This is where we are going
to have the value added and we are going to create jobs and
provide more industry in rural areas.
I guess what I am looking for is the budget request this
year was how much?
Mrs. Thompson. $10 million.
Senator Harkin. Well, if it is doing all of these great
things and we are moving ahead, why do we get a $10 million
request? That is what I am trying to figure out. Everyone I
have talked to indicates that they could use more money. It is
a wise investment. People are going to pay it back. It is doing
good research. And we have this sort of modest, timid kind of
an approach. What did you say that they were asking for, $500
million? What was that other thing you just said, for what?
Senator Bumpers. That has been too long ago. [Laughter.]
Senator Harkin. Yes; about one-half hour.
Senator Bumpers. That was the 515 Rental Assistance
Program.
Senator Harkin. Oh, the 515 Rental Assistance Program. They
cannot pay the rent unless they have jobs. This provides the
kind of jobs they need so they can pay your rent, Senator
Bumpers.
Mrs. Thompson. Well, Senator, I have heard you speak on
AARC a number of times, and you are very persuasive. I have
been working with the White House on this issue and believe
that we might be able to get support for up to $20 million for
fiscal year 1998 on the part of the administration.
Senator Harkin. I hope so.
Mrs. Thompson. You are very persuasive.
Senator Harkin. I still think that is very low. I think
that we have just been muddling along here. And I have
basically taken at face value some indications from this
administration that they were going to boost their request for
this. Then 1 year slips by, and they say, well, then we will do
it next year. The next year slips by and I am through having it
slip by any longer. Everything that I see indicates that there
is a bright future for it.
Let me ask one last question. I know the answer to it, but
I want to get it on the record. Do other countries have a
program like AARC?
Mrs. Thompson. I am going to let Bruce Crain answer that
specifically, but there are some interesting things that happen
in other countries.
Mr. Crain. Senator, Canada, right now, is establishing a
value-added program. And I think the Canadian Government has
appropriated $100 million for that program. A lot of that will
be spent by individual provinces.
Australia has a similar program. And we have just recently
learned that the People's Republic of China has a program which
is very similar, as does Germany which has a budget of $53
million. And in a recent meeting that I participated in with
some of my counterparts in those groups, they are looking at
the AARC model as to how to develop a value-added-type program
in their countries. Because they like the fact that we are able
to leverage private dollars so successfully. And they are
attuned to the fact that for every dollar of research, it takes
$100 to commercialize that research.
Senator Harkin. Well, I have followed it very closely and I
have seen the companies that have been invested in. And
everything looks like it is going to be a good program. And
obviously not everyone is going to come up a winner. We know
that. That is the nature of this business. But, overall, it
seems to me, that you are putting the money out there, and
these kind of businesses are going to add value to crops,
provide jobs in rural areas, and I think that is the direction
we have to go.
I just hope that we can, Mr. Chairman, find the $20
million. We were supposed to have done that last year and we
did not. So I said, OK, we will wait another year. So I was
greatly disappointed when I saw the budget request come in
again at last year's level for something that is actually
building jobs in rural America and leveraging what, 4 to 1,
private money.
Mrs. Thompson. Senator, I will do all I can to work with
you on AARC.
Senator Harkin. I appreciate that. Thank you very much.
Thank you, Mr. Chairman.
Senator Cochran. Thank you, Senator.
Rural Housing Service
Mr. Shadburn, I know you were listening when Mr. Beyer
talked about leveraging the funds available for rural utilities
with private sector investment dollars. And I was curious to
know whether your experience in the housing programs is that we
are leveraging in the same kind of way with housing dollars as
we are in utility dollars. What can you tell us about the
programs under your jurisdiction, as far as attracting private
investment is concerned?
Mr. Shadburn. Well, Senator, we are very proud in the Rural
Housing Service of the leveraging that we are doing. Obviously,
we are focusing on attracting additional private investment--in
the direct program, we are requiring a goal of at least 20
percent of our direct housing money to be leveraged by each
rural development State office. We also have the Real Home Loan
Partnership that we initiated in fiscal year 1996 with Rural
LISC, the Federal Home Loan Bank and community development
corporations, where we now have 17 States that are working to
leverage funding.
We also are working with the State housing finance agencies
and the private lenders. So we have focused in each of our
programs, the direct single-family program, our guaranteed
single-family and multifamily housing program, our guaranteed
and direct community facilities program, and likewise in our
515 program. So, in all of our programs, we are focusing on
leveraging with partners to make our funds go further.
Senator Cochran. We have also heard that if you have a
program that has as its goal the ownership of the housing unit
by those who are being identified as beneficiaries of the
program, that you are more likely to have property that is well
cared for and that pride in ownership and other things flow
from that experience--more responsibility for family, getting a
job, for doing the things that have moved this country forward
economically. My question is, Is that something that is real or
imagined? Are we seeing those kinds of results flow from our
rural housing programs that encourage ownership or that move
someone toward owning their own home?
Mr. Shadburn. Yes; most definitely, sir. We are focused at
the Rural Housing Service on just the things that you were
talking about there. But, in addition, it certainly benefits
the total family, especially the children, because of their
ability to live in safe, sanitary, and decent housing. It
allows them to do better educationally. It has been proven. And
it builds and supports the family unit. And we are finding that
as we focus on our servicing and portfolio management, that we
are assisting in making successful homeowners.
Rural Business-Cooperative Service
Senator Cochran. Mr. Watkins, the programs under your
jurisdiction have been very helpful in many respects in my
State, particularly those in enterprise zones that were
identified where there is a lack of job opportunities,
providing loan funds and even grants in some cases to
businesses and to new initiatives to provide jobs. It has made
a big difference in a lot of people's lives.
What is your assessment of those programs in the rural
enterprise communities? Have they been working or not?
Mr. Watkins. Mr. Chairman, thank you very much for the
question.
Our experience to date is that as those communities develop
their expertise and their capacity to understand how Federal
programs can really be used to benefit their communities, as we
market and promote the programs to the private sector,
businessowners and entrepreneurs in those local communities,
then, yes, these programs have been utilized and they make a
significant difference in assisting businesses establish
themselves and locate in the empowerment zones and enterprise
communities.
Senator Cochran. When some of these programs were just
starting up, I had gotten the impression that there were more
meetings being held than loans being made. Are you still having
more meetings than loans being made?
Mr. Watkins. Well, Mr. Chairman, that was probably a true
assessment when the program first began, because the overriding
philosophy of the program was that everyone in the local
community was to be involved in the empowerment zones/
enterprise community program. In order to be involved,
residents who had never worked together were brought together
for their communities economic development. They had to develop
their capacity and expertise, to understand how this initiative
would benefit them.
We encouraged the continuation of meetings. Now, whether or
not there are more meetings today than there are program
assistance being made to those communities, from a personal
perspective certainly meetings are continuing, but the
resources are being made available and are being used in
designated and nondesignated rural communities. We can provide
you with the information to support this assessment.
Mrs. Thompson. I have some numbers that I think you will
find of interest.
Senator Cochran. Yes, Madam Secretary.
Mrs. Thompson. Since the time of the designation of the
empowerment zones and the enterprise communities, through last
December, there have been $324 million awarded from a variety
of sources. And included in that is $85 million from the
private sector, where we used Federal dollars to leverage
private sector dollars.
Since the inception of the program, we have had 18 new
business revolving loan funds established, 3,000 residents have
participated in job training. There have been six new job
training centers established. And more than 7,700 residents are
now being served by expanded child care or Head Start programs.
So those are some of the things that we have been able to get
accomplished.
Administrative Costs
Senator Cochran. Let me ask you this one question about the
budget request. I notice that in the area of administrative
costs, last year's funding level was $31 million. This year
there is a $4.6 million increase being proposed. Why is it
necessary to increase the administrative costs over 10 percent
in 1 year?
Mrs. Thompson. I believe it is technical assistance that we
will be providing to the communities, but I want to ensure that
that is where that money is going. It is for technical
assistance. And one of the things that I think we knew before
but which has been confirmed as a result of the processes that
we have been going through is that some of the poorest rural
communities have the greatest challenge in terms of writing
grant applications and strategic plans for their communities
and updating strategic plans.
And, as you know, it is very different--I know in my
hometown, we do not have people working for the town of Larwell
who have master's degrees in public administration, whose sole
job it is to write grant applications in the private sector or
the public sector. Instead, we have a lot of people who have
day jobs and volunteer their time to serve the community as
town board president and member of the town council.
Well, in the poorest rural communities, they have not an
even greater need than in my hometown for the technical
assistance information that we can provide and guidance that we
can provide to link them up with Federal programs that are
available. And that is the reason for the increase.
Alternative Agricultural Research and Commercialization Corporation
Senator Cochran. With respect to the Alternative
Agricultural Research and Commercialization Corporation--that
is a fancy, big title--or AARC, I am impressed with the work
that is being done. I appreciate very much your making this
material available to the committee--or to Senator Harkin, who
made us all read it. [Laughter.]
But this is strong evidence, I think, of the importance of
these investments in new technologies, new ideas, and new uses
of products from the farms. I am hopeful that we can support
your request for the additional funding. I know that amount
sounds modest to you, but it is a small request for an
increase. I hope we can do it, because I think it has been a
worthwhile program, and we need to provide the funds to
continue it and expand it if we can.
I know, in our State, we have the facility down at the
University of Southern Mississippi that this committee funded
several years ago, the Polymer Science Center. It has
undertaken research in many of these same areas, trying to use
products in a new way--developing polymers specifically--but
there are a lot of spinoff discoveries from that research, or
as a result of that research.
Have you been down there recently to check out what they
are doing? Is that a complementary or a duplicative investment?
Mr. Crain. Mr. Chairman, we work very closely with Dr.
Thames at the University of Southern Mississippi. I have been
down there a couple of times. And it complements what we do. We
rely on research laboratories like that one, and the ARS
laboratories and the Forest Products Laboratory to develop
those technologies. Then we can assist the entrepreneurs who
are attempting to commercialize these technologies. We are the
next step in the process.
As you know, down there, there is the revitalization of the
tung oil industry. And we are excited about the possibility of
getting involved in that, and assisting those people that are
trying to develop biobased products from tung oil, that, as you
know, was once very prominent in that area.
Senator Cochran. There was once a great hope that the kenaf
industry was going to be an alternative source for pulp and
paper products. Are you familiar with any new developments in
the kenaf area?
Mr. Crain. Kenaf is something that we have invested heavily
in--almost 10 percent of our portfolio is invested in kenaf,
directly or indirectly. We feel like it is going to be the
future. We have major paper companies now stating that they
want to use up to 30 percent of their alternative fiber for the
production of paper in the future. We are going to have to look
at alternative fibers. And kenaf is a legal one, as opposed to
some that are not, that we should pursue.
I think that a few months ago there were eight paper
company executives from Japan that came to Mississippi, and
told the Mississippi Department of Agriculture they would take
up to 1 million metric tons of kenaf pulp tomorrow if they
could get it.
Senator Cochran. Why can't they get it?
Mr. Crain. Well, there is not enough in the ground. And
there has not been an incentive yet for the farmer to plant it
and for a paper mill to be developed or a pulping mill to be
developed, say, in the empowerment zone, right near Charleston,
MS.
Hopefully, though, as we have more of these products become
more commercially viable and the markets become penetrated, you
are going to have more farmers in that region and in Texas and
Arkansas and others looking at it. And when they do, you are
going to see the big paper companies, whether they be domestic
or foreign, come in and make investments to produce paper and
other products from kenaf.
Rural Community Advancement Program
Senator Cochran. I noticed the overall budget request for
the Rural Community Advancement Program [RCAP] is $2.5 billion
in program-level dollars. How does this compare with last
year's appropriated amount for these activities?
Mrs. Thompson. They are very similar. It is 10 percent. So
it is very similar--well, it is 10 percent of budget
authority--however that translates into the programs, whether
they be grant or loan programs. But they are very similar.
Senator Cochran. My last question involves the local
administration of these programs. I know the Washington level
can devise and plan, have strategies and budget numbers, but
unless you have the program administered in an effective way
and a sensitive way at the State level and the local community
level, it may not produce the results that we all had intended.
What is your assessment of the quality of administration in the
offices at the local level and how they are providing the
resources and assistance, technical and otherwise, to the
family farms and to the people who actually are the
beneficiaries of these programs and services?
Mrs. Thompson. I think we have a very strong field delivery
system, made up of career employees in the Department of
Agriculture, who know very much about the needs in their own
individual communities because they live, their kids go to
school there and it is their community. And we have some very
talented and very committed and, quite frankly, very, very
knowledgeable people, whose heart and soul is in the community
that they are serving.
And I think when you look at all of the changes that we
have made in the restructuring and reorganization in the
Department of Agriculture and all of the changes that they have
been a part of implementing in program delivery, I just think
that they have performed something close to miracles over the
last several years. And I, personally, as a political
appointee, am very proud to be associated with the field
structure and the career employees that we have across the
country.
And I, frankly, do not think there is any other way that we
could administer these programs as cost effectively as we are
administering them. I think the field structure is working very
well.
Senator Cochran. The reason I ask the question is we want
to be sure that the dollars we appropriate go to support the
workers out in the field too, and not just the people who are
here in Washington managing the program. Because if we have too
many managers and not enough workers, we do not get any work
done. We just do not get the services provided or the technical
assistance out to the local level.
Mrs. Thompson. I could not agree with you more.
Senator Cochran. I want to be sure that we have a proper
balance in our budget as well. So we are going to be looking
closely at that. If you have any comments that you want to
submit for the record, such as comparing the cost of
administration and the dollars spent on the field services
delivery system now with what it was 5 years ago, before the
reorganization really started, that would be interesting to
look at.
Mrs. Thompson. We can do that. As you know, we are
requesting a lower level for salaries and expenses for fiscal
year 1998 than for fiscal year 1997. Even with that, we are
working hard to make sure that we are making the right kinds of
investment in the resources that our field employees have
available to them. And so there are some up-front costs in the
reorganization and the restructuring that will be pretty much
one-time costs. I am thinking in particular of the centralized
servicing system for the single-family housing program.
But, yes; we would be glad to provide some good statistics
regarding the costs over the last several years.
Senator Cochran. Thank you.
[The information follows:]
COMPARISON OF ADMINISTRATIVE COSTS TO PROGRAM AMOUNTS DELIVERED FISCAL YEAR 1995 THROUGH FISCAL YEAR 1998
----------------------------------------------------------------------------------------------------------------
Administrative
Salaries and cost per
Fiscal year expenses Program amount program dollar
delivered
----------------------------------------------------------------------------------------------------------------
1995.......................................................... $555,238,000 $6,463,145,000 $0.09
1996.......................................................... 533,198,000 6,933,966,000 .08
1997.......................................................... 519,959,000 8,205,524,000 .06
1998.......................................................... 514,951,000 9,126,234,000 .05
----------------------------------------------------------------------------------------------------------------
The mission area has been able to lower the cost of program
delivery by using a higher level of technology and through
field restructuring. However, there are some initial start-up
costs associated with the initiatives. Therefore, the budget
request of $514,951,000 is required to continue the momentum on
these savings.
Submitted Questions
Senator Cochran. I may have some additional questions, and
other Senators who are members of the committee may also. If we
do submit additional questions, we hope you will be able to
answer them in a timely fashion. We will put them in the record
and carefully consider them as a part of our process.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]
Questions Submitted by Senator Cochran
rural development
rural development loan fund program account
Question. The Administration's request proposes to change the
direct loans authorized under the Rural Electrification Act. The
proposal suggests using earnings generated by the interest differential
on the voluntary cushion of credit payments made by Rural Utilities
Service borrowers to provide loan subsidies for rural economic
development direct loans. Please explain how this proposed request
would work using monies from the Rural Electrification and
Telecommunication Liquidating Account? How many rural economic
development direct loans will be available in fiscal year 1998 if this
request is approved by the Committee?
Answer. The earnings generated by the interest differential on the
voluntary cushion of credit payments made by Rural Utilities Service
borrowers would be used to finance the rural economic development loan
and grant programs as authorized by the Rural Electrification Act.
These earnings are currently being used to finance the rural economic
development grant program. Some of the earnings would be transferred to
the Rural Economic Development Loan Program Account from the Rural
Electrification and Telecommunication Liquidating Account and used to
provide the necessary loan subsidy for the loans. It is expected that
the requested loan level of 25 million will provide for 79 loans.
rural business-cooperative service
rural economic development loans
Question. The fiscal year 1998 budget request proposes $25 million,
an increase of $12.7 million, for rural economic development loans. The
carryover of unfunded applications from fiscal year 1996 and fiscal
year 1997 will total $16 million by the end of fiscal year 1997. Will
the proposed fiscal year 1998 budget request be sufficient to eliminate
the backlog?
Answer. The carryover of unfunded loan applications for fiscal year
1996 was substantially eliminated in the first quarters of fiscal year
1997, a total of 20 loan applications for $6.66 million had been funded
under the Rural Economic Development Loan Program. As of April 1997, an
additional 10 loan applications for $3.2 million are currently being
processed by Rural Development State Offices. The fiscal year 1998
budget request of $25 million is sufficient to cover any carryover of
unfunded fiscal year 1997 loan applications and anticipated application
activity. As you are aware, we are proposing to fund the loan program
through earnings generated by the interest differential on the
voluntary cushion of credit payments made by Rural Utilities Service
borrowers. These earnings will be used to fund the $5.97 million in
subsidy for the proposed $25 million supportable loan level proposed in
the fiscal year 1998 budget request.
1890 land grant initiatives
Question. The Rural Development 1890 Land Grant Initiative involves
cooperative agreements with the 1890 Land Grant Universities and
community-based organizations to develop income-producing projects for
underdeveloped rural communities. What type of cooperative agreements
are made with these universities and organizations?
Answer. The Rural Business-Cooperative Service agency has authority
to enter into cooperative agreements with 1890 Land Grant Colleges and
Universities. These cooperative agreements are for technical assistance
and business development services in the local under-served communities
where they are located. They assist current business owners, local
business groups and budding entrepreneurs to maintain, expand and grow
new businesses.
Question. Which 1890 Land Grant Universities are currently
participating in this initiative?
Answer. The following is the list of all 1890 and Historically
Black Colleges and Universities which are under cooperative agreements
with Rural Business-Cooperative Service for fiscal year 1997 funded
from fiscal year 1996 budget authority:
1890 Institutions:
1. North Carolina A&T University, North Carolina
2. South Carolina State University, South Carolina
3. Southern University, Louisiana
4. Prairie View A&M University, Texas
5. University of Maryland Eastern Shore, Maryland
6. Lincoln University, Nebraska
7. Langston University, Oklahoma
8. Kentucky State University, Kentucky
9. Fort Valley State College, Georgia
10. Florida A&M University, Florida
11. Delaware State University, Delaware
12. University of Arkansas Pine Bluff, Arkansas
13. Acorn State University, Mississippi
14. Tuskegee University, Alabama
Question. What is the history of this initiative?
Answer. The 1890 Land Grant Institution Initiative program was
implemented as the result of USDA's commitment to work with these
institutions as it does with the 1862 Land Grant Colleges and
Universities to build capacity in the agricultural, mechanical, and
technical arts areas. The Morrill Act of 1890 was enacted to provide
federal assistance for Southern states for the education of African
Americans. This initiative was initially implemented throughout the
Department of Agriculture in fiscal year 1988. Rural Business
Cooperative Service has participated in the program since fiscal year
1994 when USDA implemented its 1994 Reorganization. Prior to that, the
original 1890's program was started under the old Farmer Home
Administration (FmHA).
cooperatives
Question. With the changing role in federal farm programs, the need
for farmer cooperatives becomes increasingly important. In the fiscal
year 1997 appropriations bill, the Subcommittee encouraged USDA efforts
to support farmer cooperatives. Please outline the actions the agency
has taken to strengthen existing cooperative development programs and
what additional initiatives are planned to further encourage such
cooperative self-help efforts?
Answer. The Department recognizes the important role that
cooperatives continue to play for farmers, especially as they adjust to
changing farm programs. We are focusing our resources in areas and
activities that will support cooperative development in areas most
affected by changing commodity programs and needs as expressed by
producer groups. Our actions to strengthen existing cooperative
programs include the following. First, we are maintaining a staff at
the National Office level to conduct research, technical assistance and
development of educational programs about cooperatives. The new
increase for research on cooperatives proposed in our budget identifies
the critical need for bolstering this work and continuing the
partnership with colleges and universities in fulfilling it. Second, we
are continuing to build a network of cooperative development
specialists in State Offices who can work on specific projects as they
are requested. These specialists coordinate with our staff at the
National Office level as needed. We are also working through three
additional programs to augment cooperative development assistance. The
Rural Cooperative Development Grant Program is seeking to build a
network of public/private development assistance. Under the Fund for
Rural America, we are attempting to encourage farmers through their
cooperatives to capture a greater share of the value added to their
agricultural commodities. The National Sheep Industry Improvement
Center Program, just underway, is attempting to address infrastructure
needs to help mitigate the loss of the wool and mohair programs through
industry-directed research, promotion, and technical assistance. Each
of these efforts is aimed at conducting a program of research and
education. This will help farmers have a clearer understanding of their
options and strategies for using cooperatives as an alternative to
Federal farm programs
salaries and expenses
Question. The President's fiscal year 1998 budget request proposes
an increase of $2 million for Rural Business-Cooperative Service
salaries and expenses to fund cooperative research agreements primarily
with colleges and universities on issues facing agricultural and non-
agricultural cooperatives. Why are these additional funds needed and
how will they be awarded?
Answer. Funds are needed to help rebuild the research base on
agricultural cooperatives and to start building a research base on non-
agricultural rural cooperatives. With diminishing resources for
cooperative research the past few years, the base of information on
which important decisions are made, by cooperatives themselves and by
policy makers, has been eroded. In addition, we are seeking legislation
which would expand the authority of Rural Business-Cooperative Service
to provide the same type of advice and assistance to non-agricultural
rural cooperatives as they are currently doing for agricultural
cooperatives. Relevant research in this area is particularly lacking.
If we are to provide timely and effective service to this new
clientele, we need to start developing an information base through
research when possible. Due to ceiling/staffing constraints, colleges
and universities through cooperative research agreements will
accomplish much of this research. This would be a competitive, matching
program with funds allocated to those applicants with demonstrated
ability to effectively carry out the needed research.
alternative agricultural research and commercialization corporation
Question. In your prepared statement, it mentions that 66 projects
have been funded in 32 states with an investment from AARC of $28
million. Seven companies have begun to partially repay AARC. In the
prepared statement you say that AARC does not expect the funded
companies to generate positive cash flow until their fifth or sixth
year. Will any of the remaining 59 projects mature to their fifth or
sixth year in fiscal year 1997 and 1998?
Answer. The AARC Corporation's Board of Directors seeks to have a
portfolio with companies at various levels of maturity. Thus, there
should be a continuous flow of return into the Corporation's revolving
fund, as opposed to periodic waves. The investments made in the
earliest days of the Corporation--when it was called the Center--were
primarily made in companies that were still in the Research and
Development (R&D) phase of growth; the time of repayment was at least
five to six years in the future. More recent investments have focused
on companies that are in the pre-commercialization phase; the repayment
horizon is shorter. As the portfolio grows and the mix of companies
stabilizes, with an appropriate number running the gamut from those in
the R&D phase to those in full production, there should be a constant
number-probably two or three-per year reaching a positive financial
position.
Question. What level of payments do you expect to receive from
companies in fiscal year 1997 and 1998?
Answer. The current business plan, under which the Corporation is
operating, anticipates relatively constant repayments of $100,000 in
each of fiscal year 1996 and fiscal year 1997. The business plan
projects an increase in repayments to $200,000 in fiscal year 1998.
Major gain in repayments is not anticipated until fiscal year 1999. The
business plan also takes into account an annual growth rate of
approximately 4.3 percent in unrealized gains in value of AARC's stock
holdings. Major equity options are eligible to be exercised beginning
in fiscal years 1999 and 2000.
Question. Section 729 of the 1996 Farm Bill includes a provision
that allows Federal agencies to establish set-asides and preferences
for products commercialized with the assistance of AARC. What sort of
products will the Federal agencies be able to use?
Answer. Almost the entire portfolio of products could be utilized
by the Federal government. For example, the U.S. Postal Service (USPS)
is constructing ``green'' buildings around the country. One facility
now being constructed near Dallas, Texas, will utilize compressed wheat
straw walls produced by Agriboard Industries in nearby Electra, Texas.
We believe other AARC-supported construction materials may also be used
in that building.
The USPS has also contracted with Gridcore Systems International
(GSI) to produce trash cans for use in post offices. The source of the
raw materials used to make the strong, lightweight honeycomb panels for
the trash cans is undeliverable bulk mail. We support the way the USPS
has endorsed environmentally-friendly building products from the AARC
Corporation. We are still talking with USPS about using other products
in the AARC Corporation portfolio in their course of business.
Gridcore has supplied samples and is also talking with Unicor, part
of the Prison Industries Program, about making furniture.
Discussions are currently underway with the Pentagon and several of
the AARC building material suppliers to provide material to renovate
and ``green'' the Pentagon. Use of AARC materials in this multi-year
project could have a major positive impact on these companies.
Phenix BioComposites produces Environ from soybean meal and waste
newspaper. It is a replacement for hardwood and looks like granite. The
Natural Resources Defense Council (NRDC) used Environ for the counter
tops and work surfaces in its new headquarters built last year, in
Washington, DC.
PrimeBoard uses 100 percent wheat straw to produce Wheat Board, a
particle board replacement. This product is being widely used for
manufacturing cabinets, furniture, and millwork. NRDC's counter
underlayment is from PrimeBoard and its cabinets are also made from
Wheat Board.
Seed-based Lubricants.--International Lubricants Inc. (ILI)
produces a line of biodegradable seed-based lubricants--everything from
transmission additives, to all purpose lubricants, to two-cycle oil to
industrial lubricants. Although the seed-based lubricants are
environmentally preferable, these petroleum replacements face stiff
competition from the existing petroleum-based products. In spite of the
competition, some sales to the U.S. Air Force have taken place.
Vegetable oil based lubricants could also be used with weapons and in
the engines of high-performance vehicles.
The Leahy-Wolf Company uses canola oil as a lubricant for concrete
forms. As the Federal government continues to build new buildings and
renovate old ones, or pours cement in environmentally-sensitive areas
(bridges over waterways for instance), this product may be specified.
Other Fluids.--Windshield washer fluid produced by Aquinas
Technologies that is made from ethanol would seem to be a natural for
all vehicles.
Absorbents.--There are several products in the AARC portfolio which
will help clean up oil spills. Low value wool from Hobbs Bonded Fibers
has been purchased for use at military bases in Texas to catch and hold
petroleum drips from vehicles. Two other products show great promise in
remediating hydrocarbons. One is Oil Gator, the Product Services
Marketing Group, which is made from cotton seed lint. It has been used
to remediate spilled petroleum. Kenaf core can also be used to absorb
and remediate hydrocarbons. These products can be used to clean up
spills from existing contaminated sites, not just new spills. As
military properties are being cleaned up, these products are likely to
be considered.
Filter Material.--Scientific Ag Industries makes activated carbon
made from peanut hulls. These products can be used in water and air
filtration systems and can also be used to remediate soils. It's also
cheaper and of better quality than imported materials.
Soil Amendments.--Many military bases are located in places with
poor soil conditions. Biorecycling Technologies, Inc. is currently
working with the Marine Corps Ground Combat Center at Twenty Nine
Palms, California, to improve soil conditions in the military housing
area, the golf course, and recreation sites, using a variety of
fertilizers and soil amendments derived from cow manure.
Earthgro Incorporated makes a variety of potting mixes utilizing
plant and animal wastes. These can be used with interior potted plants
and exterior plantings as an ideal substitute for peat, a finite and
imported material, and petroleum-based fertilizers.
Cleaners.--The AARC Corporation has invested in a number of
environmentally-friendly cleaning products. Interchem Environmental
produces a line of solvents from soybeans including graffiti remover,
paving equipment, tar remover, and cleaners for printing presses.
Shadow Lake makes Citra-Solv, a multi-purpose cleaner made from a
powerful citrus extract, along with a number of other natural
products--castile soap from essential oils and Air Scense, an air
freshener from essential oils, which absorbs odors.
MM Manufacturing produces waterless hand cleaner from corn oil.
Tree-Free Paper.--KP Products uses kenaf, an annual fiber plant, to
produce tree-free, chlorine-free paper.
Starch-based Plastics.--Several AARC-supported companies produce a
variety of coatings and films from vegetable starch. For instance,
StarchTech makes biodegradable packing peanuts, which replace similar
petroleum-based products.
Forestry Materials.--Indian Creek Mesquite coats mesquite wood
chunks with vegetable based paraffin in a ``Light The Bag''
application. No starter fluid is necessary. We can report that sales of
this product are brisk in USDA's employee-owned store located in the
sub-basement of the South Building.
Cat Litter.--BioPlus Incorporated products biodegradable, flushable
cat litter from peanut hulls. SSM Environmental Technologies Inc. uses
corn stover, a post harvest residue, as its base to also produce an
environmentally-friendly cat litter.
Question. Have any agencies established procedures for the purchase
of these products?
Answer. No. USDA's Procurement Policy Division is currently working
to amend the Agricultural Acquisition Regulations (AGAR) to reflect the
new procurement preference. Resource managers and contracting officers
within USDA will be trained on using the AARC preference. At the same
time, USDA procurement officials are working to present a case to amend
the Federal Acquisition Regulations (FAR) which govern purchases by the
entire Federal government. Ten years after companies are funded by the
AARC Corporation, their procurement preference ends. The preference
ends even for those companies that repay AARC ahead of schedule. The
first group of companies was funded in 1993, therefore, only six years
are left on their procurement preference.
rural housing service
rural housing service loans
Question. The fiscal year 1997 proposed subsidy rate proved to be
too low for rural housing loans. Thus, the fiscal year 1997 budget
authority proposal of $1 billion for the section 502 program was
inaccurate and in turn the actual program level for fiscal year 1997
was $585 million. Interest rates have just been raised by the Federal
Reserve. If these rates are in effect at the beginning of fiscal year
1998, how much lending authority will be available based on the fiscal
year 1998 subsidy appropriation request of $128 million?
Answer. If the April 14, 1997 Treasury discount rate of 7.19
percent is used to compute a new subsidy rate for the section 502
program, the result is a 16.51 percent subsidy rate. Based on the
fiscal year 1998 budget authority of $128.1 million and a new subsidy
rate of 16.51 percent, the program level would be $775.9 million.
However, the forecasted rate of 6.16 percent is still the
Administration's assumption, and we anticipate a sufficient loan level
in the 502 programs.
Question. Because of interest rate changes in the economy, the
Secretary used monies from the Fund for Rural America to increase the
fiscal year 1997 program level by $141 million for section 502 direct
single family housing loans. With the additional money allocated from
the Fund for Rural America, how many loans will be made in fiscal year
1997?
Answer. With the additional money received from the Fund for Rural
America, approximately 11,000 Section 502 Direct Single Family Housing
loans will be made in fiscal year 1997.
Question. The budget indicates that the Administration has
``increased its commitment to the mutual self help technical assistance
grant program.'' What does the agency mean by the statement ``increased
its commitment?''
Answer. In fiscal year 1996 there were 58 grants funded in a total
of 26 States. The requests for technical assistance funding is ever
increasing to help assist very low to low income families seeking
affordable housing through the mutual self-help method. The requests
for technical assistance in fiscal year 1997 far exceed our supply of
funds, with 41 states requesting to fund over 113 grants. However,
there were 26 other grant requests that totaled over $4.4 million that
we could not expect to fund. There is a tremendous demand for rural
Americans to obtain housing through the self-help method and this
demand is evident by the requests of non-profit organizations seeking
technical assistance funds.
Question. How much money has been earmarked for technical
assistance from the appropriated fiscal year 1997 program level plus
the monies from the Fund for Rural America?
Answer. There were $26 million provided specifically for this
program in fiscal year 1997. We believe this level will enable us to
meet program goals and none of the Funds for Rural America are planned
for this purpose.
Question. How much money is earmarked for technical assistance in
the proposed fiscal year 1998 program level?
Answer. In fiscal year 1998, we planned to maintain the $26 million
program level under the rural housing assistance grant program.
Question. How many unsubsidized guaranteed single-family housing
loans will be available from the fiscal year 1998 proposed program
level of $3 billion?
Answer. The fiscal year 1998 proposed program level of $3 billion
will provide approximately 42,360 guaranteed unsubsidized single-family
loans.
Question. What is the status of the interim final regulations for
section 515 housing loans?
Answer. The interim final rules have been submitted to the office
of the Federal Register and we expect these regulations to be published
on or about May 7, 1997.
Question. The fiscal year 1998 budget requests $30 million for the
program level and a subsidy level of $10 million for housing repair
direct loans. This is a decrease from the fiscal year 1997 program
level of $30.3 million and subsidy level of $6.9 million. The
Administration states that it is ``essentially maintaining'' the fiscal
year 1997 levels and the proposed fiscal year 1998 level will enable
the Rural Housing Service to provide assistance to 5,620 families. How
many families will be assisted with the fiscal year 1997 appropriated
levels?
Answer. Approximately 5,580 families will be assisted with fiscal
year 1997 appropriated funds for Section 504 Housing Repair Loans. The
subsidy level for fiscal year 1997 is $11.081 million, not $6.9
million, provides a loan level of $30.251 million for fiscal year 1997.
We have requested $10.3 million in budget authority for fiscal year
1998 to have program authority of $30 million, which is approximately
the same loan level.
Question. How much of the proposed fiscal year 1998 budget request
for direct farm labor housing loans and grants will be used for
rehabilitation of existing USDA farm labor housing units?
Answer. The Agency has identified a need for approximately $25
million in rehabilitation for older farm labor housing facilities. A
review of the labor housing portfolio revealed that most health and
safety needs have been met and the predominant need is for replacement
of obsolete units and upgrading older complexes. The Agency estimates
that $5 to $8 million will be needed from fiscal year 1998 funds for
this purpose, the balance coming from loans and grants in subsequent
years, internally generated reserve funds, and leveraged funds as
repairs and replacement units are phased in over time to avoid tenant
displacement.
rental assistance program
Question. The Administration's request for fiscal year 1998
proposes $593 million for the rental assistance program, an increase of
$69 million over the fiscal year 1997 level. The proposal states that
during fiscal year 1998 the budget will provide $52.5 million of rental
assistance to replace 3,665 units of expiring section 8 units in
section 515 projects and that this is a funding shift from HUD to USDA.
The explanatory notes also state that RHS will not be able to provide
any additional ``servicing'' rental assistance at the proposed program
level. (Servicing rental assistance helps very poor communities to rent
to people who receive rental assistance.) Is the proposal to use USDA
rental assistance to replace expiring section 8 units ``budget driven''
or will it assist the Rural Housing Service to better satisfy the
rental assistance renewal contracts for its customers? Does this
proposal require authorizing language?
Answer. While this proposal will save the Federal government money,
it was initiated to provide a more secure source of tenant subsidy for
borrowers and very-low income tenants dependent on project based deep
tenant subsidy, and reduce administrative burden and cost for the
borrower, HUD and USDA.
USDA rental assistance (RA) is funded in five year increments,
while HUD tenant subsidy is funded annually. The tenants, borrowers and
RHS are all better served under a more reliable source of deep tenant
subsidy. When the transition is made, borrowers will be subject to only
one set of federal regulations. This will reduce operating burden and
cost, and it will also allow more common sense approaches to project
operations. In addition, replacing Section 8 rental assistance with RHS
rental assistance will result in an overall cost savings for the
government because the RHS rental assistance program uses a
reimbursement structure based on project budgets to pay subsidy, which
is different from the contract rent structure used by HUD, which
includes automatic annual adjustments. For example, using RHS budget
approval requirements will allow rents artificially inflated through
automatic annual adjustments to be brought back down to reasonable
levels.
Additionally, we have been advised that no change in authorizing
language is needed to implement this proposal.
Question. How will the agency use the difference, $6.8 million,
after the $52.5 million is used to replace the units of expiring
section 8 in section 515 projects? Could this money be used for
``servicing'' rental assistance?
Answer. Once the 52.2 million is accounted for, that leave 16.8
million of the 69 million over the fiscal year 1997 level for RA. Any
RA funds not needed to renew expiring USDA rental assistance or HUD
Section 8 contracts could be used for servicing existing projects among
other purposes such as new construction RA.
Question. Please explain in detail the Administration's proposal
for the RHS to provide rental assistance to replace the expiring HUD
section 8 contracts. Why did USDA, HUD, and OMB decide that USDA could
best meet the needs of these projects?
Answer. After reviewing a number of options, USDA, HUD and OMB
decided this approach offered the best combination of continued service
to the public, reduction in subsidy cost, control of operating costs
and reduction of administrative burden.
As Section 8 contracts expire, borrowers will be provided with USDA
rental assistance contracts. To obtain rental assistance, borrowers
will sign an RHS interest credit agreement which requires them to
operate on a limited profit basis.
reduced government costs/budget authority
The government will save money by eliminating Housing Assistance
Program (HAP) contract requirements that create higher rents through
``automatic'' annual rent adjustments. RHS project rents increase only
when RHS approves each project's operating costs using a zero based
approach.
By 2005, all the Section 8 contracts in USDA projects would be
converted to USDA RA contracts, provided that Congress accommodates the
adjustments that need to be made in the 602(b) allocations for both the
Agriculture, Rural Development, and Related Agencies and VA, HUD and
Independent Agencies Subcommittees. For fiscal year 1998, the HUD
allocation should be reduced by the amount it would cost to renew the
expiring Section 8 contracts for one year, or $20 million, while the
amount allocated for USDA 5-year RA contracts should increase by $52
million. While the net budget authority required for this conversion is
greater in the near term, because 5-year RA contracts are replacing 1-
year Section 8 contracts, after three years there are significant
savings in the budget authority needed to maintain these units with RA.
Net savings from the conversion of all 46,000 units would be an
estimated $291 million over eight years.
RHS RA is less expensive. Cost savings are due to the differing
agency approaches for determining the amount of the contracts; rental
subsidy upon their renewal. RA contracts are increased based on a
determination of project costs. The HAP contracts are by law and
regulation automatically increased through the application of HUD's
Annual Adjustment Factor, which in past years led to rents in excess of
the market rents for the area. As an example, the estimated cost over
five years for one unit of Section 8 assistance USDA rental housing
would be $26,829. In contrast, the five-year cost of a USDA RA contract
is estimated to be $14,324. Therefore, over five years, renewing the
3,665 Section 8 units as RA would cost $52 million versus $98 million
if renewed as Section 8 contracts, resulting in five-year savings of
$46 million.
Project operating costs will be reduced. Section 515 program
borrowers with Section 8 units are currently subject to both HUD and
USDA administrative requirements. Our analysis shows that management
fees and expenses can be reduced by $2 per unit per month by
eliminating HUD administrative involvement in these projects. By 2005,
savings to project owners/operators would be approximately $1 million a
year as a result of eliminating duplicative federal agency oversight.
These cost savings would further reduce projects' rental assistance
needs, because rental assistance is based on project operating costs.
Summary of cost savings:
There are two forms of savings, budget authority and outlays.
The conversion from section 8 to Rental Assistance results in a
savings to HUD's fiscal year 1998 Budget and an increased cost to
Agriculture's. The cost is made up of two elements, 1) Interest Credit,
which is an ``off-budget'' cost that is paid out of the Rural Housing
Insurance Fund; 2) Rental Assistance, which is an ``on-budget'' cost
that must be appropriated currently.
Additionally, we are switching from one-year section 8 HAP
contracts to five-year Rental Assistance contracts. This timing
difference creates a cost up front that is recaptured over time.
The net savings to the government, including both interest credit
and Rental Assistance (off and on-budget), on average, over a 10 year
period amounts to $25.4 million per year.
The net savings to the government from a budget authority
standpoint total $291 million from 1998 to 2005.
reduced administrative burden
In addition to the significant cost savings, we see this proposal
dramatically reducing the administrative burden on Section 8/515
borrowers and Agencies. Currently, borrowers must follow both RHS and
HUD requirements, submit reports to both Agencies, and find ways to
resolve conflicting requirements. If this proposal is implemented,
borrowers will be subject to only RHS regulations.
The Federal government will also see its administrative burden
reduced. HUD will no longer be required to regulate an entire category
of Section 8 assistance, namely the Part 884 Section 8. RHS, HUD and
borrowers will no longer be required to resolve frequent jurisdictional
questions. No changes to RHS procedures should be needed to convert HUD
Section 8 tenants to RHS RA. We anticipate that burden on tenants will
not increase under this proposal. The only change tenants will see is
that their certification will be completed on an RHS form.
Question. If this budget proposal is not included and section 8
contracts under rural rental assistance are not absorbed by RHS, will
HUD then treat these contracts the same as all other section 8
contracts coming due?
Answer. We expect that HUD would treat these the same. RHS has an
interest as the holder of the mortgage that these projects could fail
if the contracts are not renewed or the contracts are replaced with
vouchers or certificates. We would anticipate that any solution used by
HUD will be more expensive in the long run than converting the subsidy
to USDA rental assistance.
RHS would be concerned if tenants were required to convert to
tenant based vouchers or certificates. Rural housing markets do not
offer as many choices as urban and suburban markets. In many rural
communities, Section 515 housing may not only be the most affordable
and best maintained rental housing, but the only rental housing. In
addition, many rural Public Housing Authorities (PHA's) who administer
HUD vouchers and certificates do not have the delivery system to
provide an appropriate level of service for rural residents to secure
and administer vouchers or certificates.
If vouchers and certificates are not provided, existing tenants and
projects will be forced into the non-subsidized housing market.
Difficult non-subsidized market may force displaced tenants into sub-
standard housing or homelessness. Borrowers will be placed in the
impossible position of operating low income housing without being able
to offer rents that eligible tenants can afford. Borrowers will simply
not be able to operate their projects for the remaining thirty years of
their fifty year loan.
We suggest that the solution must be ``project based'' to allow
projects and tenants to at least retain their current position in the
housing market. We feel that USDA rental assistance offers the best
option in project based assistance.
rural housing assistance grants (rha grants)
Question. The Administration's proposes to fund all the rural
housing grant programs in one account. It also proposes that all
obligated and unobligated balances available from prior years for all
housing grants be rolled into this account. Please list all obligated
and unobligated balances available from prior years for each housing
grant program.
Answer. The requested appropriation language that would transfer
both obligated and unobligated balances from prior years for all RHA
grant programs from their current accounts to the RHA grant account
would have no impact on grant making activity, it is only a change to
simplify the accounting activities for carrying out these 6 RHS grant
programs under one program account. This change would expedite the
process of making funds available from recovered unobligated balances
and would reduce the cost of and expedite the process of changing the
computer systems. It would also reduce the administrative burden of
reporting program account data to Treasury.
Fiscal Year 1996 carryover for rural development programs
Budget authority
Grant Programs carryover amount
Sec. 504 very low-income housing repair grants................ $132,806
Sec. 504 very low-income housing repair grants, natural
disaster.................................................. 765,690
Sec. 523 mutual and self-help housing grants.................. 9,872
Sec. 516 rural housing for domestic farm labor grants......... 64,125
Sec. 509 compensation for construction defects grants......... 1,894,376
Sec. 525/509 supervisory and technical assistance grants...... 1,731,394
Question. This proposal combines programs that are allocated by
formula, like home repair grants, with programs that are allocated
based on demand, like self-help housing and farm worker housing grants.
Section 516 farm labor housing grants are not needed in all 50 states,
yet the proposed Rural Housing Assistance Grant (RHAG) program would
allocate the funds appropriated to this account across all 50 states.
Please explain in detail how the agency will allocate these funds for
each grant program included in RHAG.
Answer. RHS and the Administration anticipates providing
flexibility on the state level between the 504 and Housing Preservation
Grant Programs. This will allow state directors to meet the specific
needs of rural communities. The Farm Labor grant activity is
concentrated in certain agricultural states. This program works
directly in conjunction with the Farm Labor Loan Program. The
Administration anticipates that the funding will be administered from
the National Office with flexibility provided to meet the need for
these specific areas. Additionally, the Administration is moving
forward to replace the current funding system of ``first come-first
serve'' to a Notice of Funding Availability (NOFA) process. The Mutual
Self Help Grant activity has expanded tremendously in the last few
years across the rural America. The Administration anticipates to fund
this program out of the National Office to ensure small communities
and/or states with little or no activity have the opportunity to
participate.
Question. Why don't more states, like Georgia and Alabama, that
have a need for farm labor housing currently participate in this grant
program?
Answer. The Agency has made specific strides through our technical
assistance contractors to provide farm labor housing in underserved
areas with demonstrated need. These efforts include working with local
communities to develop sponsorships for farm labor housing.
Additionally, the majority of Farm Labor grants are provided in
conjunction with the Farm Labor loan program. The mixture of the loan
and grant combination is limited to non-profits and governmental
bodies. On-site farm labor projects where the farmer or owner provides
farm labor housing through RHS is strictly limited to the loan program.
Many states in the South have a history of on-site farm labor housing.
We will continue to work with states such as Georgia and Alabama to
ensure communities have the opportunity to provide needed farm labor
housing.
rural housing service
Question. What is the estimated number of Americans living in
inadequate housing today?
Answer. In the December 1996 publication titled, The State of the
Nation's Rural Housing in 1996, the Housing Assistance Council
indicated seven percent of all rural households (2.5 million) and 8
percent of central city households (2.4 million) were in inadequate
housing. This is compared to only 4 percent (1.2 million) of suburban
households that were classified as inadequate.
Question. The President's 1998 budget request proposes an
authorization of a $100 million for graduating direct loan borrowers
into the guaranteed program, at an appropriated subsidy cost of only
$20,000. What is the status of this legislative proposal?
Answer. The Department is in the final clearance process and we
expect to transmit this legislative proposal to the appropriate
Congressional Committees in the near future.
Question. How many estimated direct Section 502 borrowers would
benefit from this proposal?
Answer. It is estimated that approximately 3,280 borrowers would
benefit from this proposal based on refinancing an average loan balance
of $30,500. These borrowers can be generally characterized as
nonsubsidized, high interest rate (10 to 13 percent) borrowers or
borrowers who receive minimal subsidies but still pay above current
market rates.
salaries and expenses
Question. The prepared testimony states that the Rural Housing
Service will have a savings of $250 million because of the efficient
changes brought about by automation and centralization. This savings
will be a result of reduction in staff over five years. For the record,
please provide the dollar and staff year savings by fiscal years (1996-
2000).
Answer. I would be happy to provide that information for the
record. However, I should point out that not all of the savings comes
from a reduction in FTE's. The majority of the savings comes from
mandatory accounts associated with reduced amounts of real estate taxes
the agency has to voucher annually and reduced losses on defaults and
foreclosures. I will submit a table outlining the estimated net savings
for the years fiscal year 1996 through fiscal year 2000 which total
$249.2 million. This table reflects the original plan for the reduction
of 220 FTE's on October 1 1996, followed by reductions of 300 on April
1, 1997 and 80 on October 1, 1997. This plan was not carried out
because of the implementation of the voluntary separation authorized by
the Appropriations Act for 1997, however the results are the same in
terms of FTE reductions for fiscal year 1997.
[The information follows:]
900 FTE'S REDIRECTED, 220 REDUCED 10/1/96, 300 ON 4/1/97, 80 ON 10/1/97 (600 TOTAL)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal year--
Saving category -----------------------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Escrow value...................................................... ................ $2,902,734 $12,480,827 $14,884,160 $13,218,669 $13,035,242 $13,405,993
Savings on tax vouchering......................................... ................ 4,723,422 11,397,333 20,227,345 20,227,345 20,227,345 20,227,345
Reduced default and foreclosure costs............................. $3,281,040 9,037,448 5,550,271 28,786,762 45,890,338 63,424,864 68,886,097
-----------------------------------------------------------------------------------------------------------------------------
Total mandatory............................................. 3,281,040 16,663,605 29,428,432 63,898,266 79,336,352 96,687,450 102,519,435
=============================================================================================================================
PLAS nonpersonnel operating expense avoided...................... 4,208,899 4,351,166 7,358,717 7,505,891 7,656,009 7,809,129 7,965,311
DLOS nonpersonnel installation/conversion/operating expense....... (16,716,000) (14,118,210) (11,532,047) (11,647,023) (11,763,148) (11,880,434) (11,998,894)
FTE reductions planned............................................ ................ 24,510,000 34,200,000 34,200,000 34,200,000 34,200,000 34,200,000
DLOS-related administrative expenses.............................. (3,279,854) (2,474,010) 1,668,335 1,700,783 1,733,231 1,733,231 1,733,231
Non-DLOS relocation and severance costs........................... ................ (3,522,000) (31,698,000) ................ ................ ................ ................
-----------------------------------------------------------------------------------------------------------------------------
Total discretionary......................................... (15,786,955) 8,746,947 (2,996) 31,759,651 31,826,092 31,861,926 31,899,649
=============================================================================================================================
Total....................................................... (12,505,915) 25,410,552 29,425,436 95,657,918 111,162,444 128,549,376 ................
=============================================================================================================================
Total mandatory 97-2001........................................... 286,014,105 ................ ................ ................ ................ ................ ................
Total discretionary 97-2001....................................... 104,191,620 ................ ................ ................ ................ ................ ................
-----------------------------------------------------------------------------------------------------------------------------
Total 97-2001............................................... 390,205,725 ................ ................ ................ ................ ................ ................
=============================================================================================================================
Total mandatory 97-2000........................................... 189,326,655 ................ ................ ................ ................ ................ ................
Total discretionary 97-2000....................................... 72,329,694 ................ ................ ................ ................ ................ ................
-----------------------------------------------------------------------------------------------------------------------------
Total 97-2000............................................... 261,656,349 ................ ................ ................ ................ ................ ................
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Question. For the record, please provide the staff years and
savings associated with each of the seven phases of implementation for
the conversion of the Rural Housing Service loan portfolio.
Answer. Regarding the second part of your question, I will submit
for the record a table which shows the conversion to DLOS for each
State in the seven conversion phases. The table reflects a planned
total reduction in staffing of 888 FTE's which is a combination of the
reductions attributable to DLOS and the reductions attributable to the
revised streamlining targets established for Rural Development in the
President's Budget. As you are aware the request for salaries and
expenses reflects a reduction of $15.5 million, in discretionary
savings, associated with the implementation of DLOS.
[The information follows:]
ESTIMATED/ACTUAL \1\ FISCAL YEAR 1997 STATE FTE EMPLOYMENT BY MONTH
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
FY 1997 SYs
FY 1996 ---------------------
EOY FTE Oct \1\ Nov \1\ Dec \1\ Jan \1\ Feb \1\ Mar \1\ Apr \1\ May Jun Jul Aug Sep Rev.
empl Projected ceiling
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama.............................................. 181 179 175 166 164 161 161 \2\ 160 152 152 152 152 152 161.2 159.5
Alaska............................................... 28 29 29 30 28 29 29 30 30 30 30 30 \2\ 30 29.3 30.0
Arizona.............................................. 85 82 82 79 77 77 75 \2\ 74 72 72 72 72 72 75.9 75.5
Arkansas............................................. 199 198 197 182 177 176 177 173 173 \2\ 169 165 165 165 177.3 174.8
California........................................... 171 168 166 161 158 156 155 154 153 153 \2\ 153 153 153 157.3 159.2
Colorado............................................. 74 72 72 69 66 65 66 66 66 66 \2\ 65 64 64 67.1 68.2
Delaware/Maryland.................................... 74 75 72 68 66 67 68 68 68 68 68 \2\ 65 65 68.4 69.9
Florida.............................................. 141 137 137 131 129 128 128 125 124 \2\ 124 124 124 124 128.3 127.4
Georgia.............................................. 204 198 196 184 178 176 174 \2\ 170 170 170 170 170 170 177.7 175.8
Hawaii............................................... 60 60 59 58 58 58 58 59 59 59 \2\ 59 59 60 58.6 58.8
Idaho................................................ 88 88 88 84 83 82 81 81 81 80 \2\ 80 80 80 82.5 86.8
Illinois............................................. 158 156 156 149 148 149 148 146 146 145 145 145 \2\ 139 148.5 150.4
Indiana.............................................. 135 131 131 122 119 119 119 119 118 117 117 \2\ 117 118 121.0 121.2
Iowa................................................. 162 161 161 154 148 146 145 142 142 \2\ 142 143 144 145 148.0 150.2
Kansas............................................... 85 85 86 85 84 83 85 84 84 84 \2\ 80 80 80 83.5 85.5
Kentucky............................................. 171 171 167 159 160 160 154 153 151 150 150 \2\ 145 145 156.4 152.1
Louisiana............................................ 149 148 147 142 140 138 137 134 134 \2\ 130 128 128 128 137.0 136.7
Maine................................................ 114 113 113 104 102 102 101 99 99 99 98 \2\ 98 98 102.5 104.7
Massachusetts/Connecticut/Rhode Island............... 79 77 77 73 73 71 71 70 70 69 69 \2\ 69 69 71.8 73.0
Michigan............................................. 178 175 171 161 156 147 151 150 150 150 150 \2\ 150 151 155.5 157.7
Minnesota............................................ 132 131 130 131 129 129 126 126 126 126 \2\ 125 125 125 127.6 130.6
Mississippi.......................................... 345 344 342 323 314 314 312 312 311 310 \2\ 284 257 258 311.2 291.8
Missouri............................................. 193 191 187 177 174 171 \2\ 169 167 169 171 173 175 177 175.1 175.7
Montana.............................................. 66 64 62 58 57 56 55 \2\ 55 55 55 56 57 58 57.2 59.5
Nebraska............................................. 93 92 90 87 85 85 84 \2\ 84 79 79 79 79 79 83.7 80.9
Nevada............................................... 28 27 28 30 30 30 30 \2\ 30 30 30 30 30 30 29.4 30.0
New Jersey........................................... 68 66 66 66 64 64 64 64 64 63 63 \2\ 58 58 63.9 65.0
New Mexico........................................... 70 70 68 70 70 68 65 65 64 64 \2\ 62 62 62 66.2 66.1
New York............................................. 157 154 152 142 139 138 135 134 134 134 134 \2\ 134 135 139.2 143.0
North Carolina....................................... 296 298 294 273 267 265 262 261 253 247 245 244 \2\ 230 264.4 262.9
North Dakota......................................... 72 71 73 72 72 72 72 69 69 69 69 69 \2\ 65 70.6 71.0
Ohio................................................. 146 142 139 133 129 126 126 125 125 125 125 \2\ 125 127 129.0 135.5
Oklahoma............................................. 134 133 133 118 117 116 113 \2\ 111 110 110 110 110 110 116.4 116.0
Oregon............................................... 92 92 91 92 92 93 92 \2\ 87 87 87 87 87 87 89.6 92.4
Pennsylvania......................................... 160 155 154 148 147 146 145 144 144 144 143 143 \2\ 132 146.7 141.9
Puerto Rico.......................................... 136 138 141 138 137 133 130 130 129 129 129 129 \2\ 108 132.9 136.2
South Carolina....................................... 191 184 178 164 159 158 156 155 156 157 158 159 \2\ 159 162.3 175.0
South Dakota......................................... 89 86 86 83 83 82 82 81 81 80 80 80 \2\ 79 82.1 81.2
Tennessee............................................ 209 212 209 196 192 192 190 190 185 182 181 180 \2\ 170 191.6 192.6
Texas................................................ 256 256 250 232 227 227 223 222 220 \2\ 218 216 217 217 228.0 221.8
Utah................................................. 64 61 61 60 60 59 60 \2\ 58 53 53 53 54 54 57.6 57.1
Vermont/New Hampshire/Virgin Islands................. 92 90 89 81 78 78 79 79 79 78 78 78 \2\ 77 80.6 81.1
Virginia............................................. 181 178 176 153 145 143 \2\ 142 126 130 133 137 141 144 145.7 146.18
Washington........................................... 91 87 84 83 82 81 79 \2\ 78 79 80 81 82 83 81.5 86.4
West Virginia........................................ 106 103 101 101 101 101 100 100 99 99 99 99 \2\ 95 100.2 105.2
Wisconsin............................................ 136 127 126 126 127 127 128 \2\ 128 124 124 124 124 124 125.7 132.0
Wyoming.............................................. 52 51 50 49 48 49 48 \2\ 48 47 47 47 47 47 48.3 49.6
------------------------------------------------------------------------------------------------------------------------------------------
State total.................................... 6,194 6,108 6,046 5,746 5,639 5,590 5,550 5,483 5,440 5,424 5,384 5,352 5,298 5,614.6 5,644.0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Actual data.
\2\ Month of conversion.
rural utilities service
electric and telecommunications loans
Question. The fiscal year 1998 President's budget proposes an
increase in direct electric loans. It states that the need for this
increase is due to over two-thirds of Rural Utilities Service
borrowers' electric distribution facilities having been in service for
50 years or more. How many RUS borrowers' electric distribution
facilities have been in service for 50 years or more and where are they
located? How many loans can be made at the fiscal year 1998 request
level?
Answer. In the aggregate, the fiscal year 1998 requested electric
loan levels are roughly equal to the fiscal year 1997 supportable
levels. However, the fiscal year 1998 request would increase lending
authority for direct hardship loans by $56 million from the fiscal year
1997 supportable levels. The fiscal year 1998 request offsets the
increase in hardship loan levels with a commensurate decrease in
``municipal'' rate lending from the fiscal year 1997 supportable
levels.
Current information indicates that about 90 percent of USDA RUS
borrowers have some distribution plant that is in the 40 to 50+ year
age range. About 65 percent (1.3 million miles) of distribution line
contains components of this vintage. These facilities are spread across
most of the Nation's rural areas. The attached table shows how much of
this plant is located in each state. The table is ranked by the
percentage of the national total of this vintage plant located in the
state.
The size of individual electric loans varies considerably depending
on the amount particular borrowers request. At the funding level
requested, the RUS would generally make loans to between 120 and 130
rural electric distribution borrowers.
[The information follows:]
MILES OF ENERGIZED LINE FOR ACTIVE BORROWERS
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percent Percent
1945 num of 1995 1955 num of 1995 1995 num
1945 miles active miles of 1955 miles active miles of 1995 miles active
borrowers line borrowers line borrowers
--------------------------------------------------------------------------------------------------------------------------------------------------------
AK............................................................. 116 2 2 1,172 6 21 5,551 13
AL............................................................. 11,010 22 19 35,213 24 60 58,498 24
AR............................................................. 10,372 17 16 38,208 19 59 64,663 19
AZ............................................................. 635 3 4 4,263 9 27 15,992 8
CA............................................................. 1,538 4 42 2,585 5 71 3,638 3
CO............................................................. 7,571 19 13 30,816 23 54 57,267 23
CT............................................................. .......... ......... ........ .......... ......... ........ .......... .........
DE............................................................. 1,047 1 25 2,005 1 48 4,161 1
FL............................................................. 4,242 15 8 18,930 15 34 55,485 15
GA............................................................. 21,928 42 18 60,727 41 49 123,253 41
HI............................................................. .......... ......... ........ .......... ......... ........ .......... .........
IA............................................................. 30,749 53 48 55,815 52 88 63,645 46
ID............................................................. 3,176 9 26 6,339 9 53 12,041 9
IL............................................................. 21,879 28 48 44,580 27 98 45,614 24
IN............................................................. 23,094 44 52 34,690 41 79 44,132 33
KS............................................................. 10,080 22 16 53,520 36 87 61,782 34
KY............................................................. ,315 25 18 47,504 27 61 78,341 28
LA............................................................. 8,024 15 21 23,146 14 61 38,120 12
MA............................................................. .......... ......... ........ .......... ......... ........ .......... .........
MD............................................................. 8,747 2 68 5,642 2 44 12,843 2
ME............................................................. 477 4 27 905 5 52 1,740 3
MI............................................................. 9,928 13 35 18,200 15 65 28,130 13
MN............................................................. 32,917 50 30 78,463 53 71 101,477 49
MO............................................................. 23,253 39 21 82,260 46 75 110,062 46
MS............................................................. 15,665 23 23 50,921 26 73 69,434 22
MT............................................................. 3,424 14 8 26,767 25 60 44,495 25
NC............................................................. 12,911 33 17 40,003 34 53 76,034 28
ND............................................................. 3,431 7 5 51,838 25 78 66,657 26
NE............................................................. 12,833 23 38 56,065 36 168 33,437 17
NH............................................................. 1,414 1 31 2,491 2 54 4,616 1
NJ............................................................. 415 2 67 561 2 90 622 1
NM............................................................. 1,535 8 4 19,078 17 48 39,832 17
NV............................................................. 121 2 3 165 2 4 4,223 4
NY............................................................. 2,733 6 95 1,719 5 60 2,885 4
OH............................................................. 19,400 28 52 29,178 30 78 37,491 24
OK............................................................. 15,676 23 17 59,668 27 65 91,675 26
OR............................................................. 2,998 12 15 9,561 15 49 19,484 14
PA............................................................. 10,400 13 40 16,252 13 62 26,068 13
PR............................................................. .......... ......... ........ 976 1 6 16,633 1
RI............................................................. .......... ......... ........ .......... ......... ........ .......... .........
SC............................................................. 11,351 23 19 31,211 24 52 59,451 22
SD............................................................. 2,458 8 4 47,094 34 74 63,486 33
TN............................................................. 12,358 30 17 42,928 28 58 74,122 25
TX............................................................. 44,475 72 23 135,854 78 71 191,561 62
UT............................................................. 754 4 13 1,822 5 32 5,773 5
VA............................................................. 9,676 16 24 24,656 16 62 39,977 12
VI............................................................. 52 1 ........ .......... ......... ........ .......... .........
VT............................................................. 1,190 3 41 1,844 3 64 2,870 3
WA............................................................. 6,360 21 67 11,813 17 125 9,488 11
WI............................................................. 16,604 32 43 29,880 31 77 39,052 26
WV............................................................. 548 2 71 570 1 74 771 1
WY............................................................. 2,439 12 9 13,314 15 51 26,091 12
----------------------------------------------------------------------------------------
US \1\................................................... 458,264 848 22 1,353,167 982 66 2,043,658 881
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Includes Puerto Rico and Virgin Islands.
Source: Annual Statistical Report, 1945, 1955, 1995.
Question. The explanatory notes state that the ``Fiscal year 1998
budget request would also provide the Administrator the ability to move
subsidy budget authority among the electric programs * * *.'' Please
explain how the President's proposed request provides the Administrator
this capability, and why this flexibility is needed.
Answer. The President's fiscal year 1998 budget request
specifically proposes that the Administrator of RUS have the authority
to move subsidy budget authority (BA) among the three electric loan
programs and among the three telecommunications loan programs. It does
not propose moving BA from the Electric Program to the
Telecommunications Program or vice versa.
In the Electric Program, those programs are the direct hardship,
``municipal'' rate and the guaranteed loans. In the Telecommunications
Loan Program, they are the direct 5 percent (hardship) loans, the Cost
of Money (Treasury Rate) loans and the guaranteed loans. The subsidy
rate is considerably different for each of these programs and the
demand for each of these programs varies from year to year. The ability
to move budget authority among the different loan programs in each of
the separate programs will allow us to vary the types and overall
amounts of funding available consistent with demand while keeping the
program cost constant.
Question. The fiscal year 1998 budget request proposes a decrease
in direct telecommunication loans of $35 million and an increase in the
subsidy budget authority of $375,000. The budget states that the
``increase in projected subsidy rate for this program leads to the
decrease in program level.'' This results in 5 less loans available to
be made in fiscal year 1998. The Agency has a reported fiscal year 1997
backlog of $51 million in hardship loans and expects the amount to
increase to $98 million by the first of fiscal year 1998. Why is there
an increase in the subsidy rate? Why is a decrease in the loan level
being proposed when the backlog for direct 5 percent loans will only
continue to grow?
Answer. Direct 5 percent telecommunication loan interest rates are
set by law at 5 percent. The subsidy rate increased from 1.59 percent
in fiscal year 1997 to 3.92 percent in the 1998 President's Budget
because interest rates increased from 1997 to 1998. It now costs the
government more to subsidize these loans. The decrease in the loan
level is a direct result of the increased subsidy rate. If the 1997
loan level of $75,000,000 was maintained, the subsidy level for direct
telecommunication loans would be $2,940,000 calculated at the 3.92
percent subsidy rate.
Question. Are the fiscal year 1998 loan assumptions reflecting the
actual interest rates currently projected?
Answer. The fiscal year 1998 subsidy rate for direct 5 percent
telecommunication loans was based on the fiscal year 1998 President's
Budget economic assumptions.
Question. The Commerce Department's National Telecommunications and
Information Administration announced winners of grants in its 1996
Telecommunications and Information Assistance Program (TIAP) on
September 19, 1996. Sixty-seven public institutions in 42 states were
selected to receive $18.6 million in federal matching grants. These
grants are used to bring together public and private sectors to improve
and strengthen communities using advanced telecommunications
technologies. Please distinguish this program from the RUS
telecommunications programs.
Answer. The NTIA TIAP for 1997 will focus on five areas: Community-
Wide Networking; Education, Culture and Lifelong Learning; Health;
Public and Community Services; and Public Safety. All awards are
grants, and the money can be used for a wide variety of applications in
all geographic areas. The USDA Distance Learning and Telemedicine Loan
and Grant Program, focuses on different applications, different kinds
of financial assistance, and applies solely to benefit rural residents.
The USDA Distance Learning and Telemedicine Loan and Grant Program
focuses on end-user equipment for interactive distance education,
telehealth and training. The focus on end-user equipment complements
the discounts in the Telecommunications Act of 1996 for
telecommunications services used by all schools, libraries and rural
health care providers. Those discounts do not include end-user
equipment. The USDA Distance Learning and Telemedicine Loan and Grant
Program provides a 100 percent grant, a combination loan and grant, or
a 100 percent loan to help fund a program. Loans leverage budget
authority tremendously, while grants are dollar for dollar. The grants
are targeted to the most needy areas and loans to those providers who
need assistance, but are more able to help pay from local or enterprise
resources.
The USDA Distance Learning and Telemedicine Loan and Grant Program
focuses on the sustainability of projects to both prove-out and prime
the pump for the use of telecommunications to address special rural
education and health care needs. Finally, the USDA Distance Learning
and Telemedicine Loan and Grant Program is only available to benefit
rural residents who are challenged by the task of providing services to
areas separated by great distances, comprised of small towns, or facing
geographically difficult terrain. The TIIAP and the USDA Distance
Learning and Telemedicine Loan and Grant Program complement each other.
Question. The fiscal year 1998 budget request proposes $21 million
for Distance Learning and Telemedicine grants. What is the backlog in
funding requests versus available funding for the fiscal year 1997
appropriation?
Answer. Since RUS has not opened the application window for
applicants to request fiscal year 1997 funding, no figures are
available for actual fiscal year 1997 demand. However, past experience
has shown that there is an overwhelming demand for distance learning
and telemedicine grant funding. In fiscal year 1996 alone, where
applicants only had a 45 day window in which to submit applications,
and only grants were available, RUS received 150 financing requests
totaling $38 million--only $7.5 million was available for the fiscal
year. Since the first year in which the program had been funded, 1993,
grant requests totaling more than $262 million from 858 applicants have
been received; the total available funding over this period was only
$35 million.
Question. Will the fiscal year 1997 allocations for RUS hardship
loans, municipal rate loans, and loan guarantees be adequate until the
end of fiscal year 1997? When will the fiscal year 1997 funding run out
for each of these categories?
Answer. The fiscal year 1997 allocations for guaranteed electric
loans will likely be adequate for requests in fiscal year 1997.
However, the allocations for hardship and municipal rate electric loans
will be exhausted by the end of the third quarter. We estimate a
backlog of approximately $800 million for this type of financing going
into fiscal year 1998.
In the Telecommunications Program, loan levels for RUS cost of
money loans, Rural Telephone Bank Loans, and RUS loan guarantees, $300
million, $176 million, and $120 million, respectively, should be
sufficient based on the number and amount of loan applications
currently on hand. Regarding the Telecommunications Program's hardship
loan program, a total of $58 million in hardship loans have already
been approved this fiscal year out of the $75 million available. RUS
currently has an additional $57 million in processed hardship
applications on hand.
rural telephone bank
Question. In the prepared testimony, you state, Madam Under
Secretary, that by the end of the fiscal year 1998 the Rural Telephone
Bank (RTB) will have sufficient internally generated funds to fully
retire the government's remaining $574 million capitalization of the
RTB. The Administration is working on legislation which would allow a
fully private RTB to leverage its net worth in the private markets.
What is the status of this legislation? Is passage of this legislation
necessary to achieve privatization of the bank by the end of fiscal
year 1998?
Answer. The Office of Management and Budget has recently completed
its review of the legislation and we are in the process of assessing
their comments. We anticipate being able to transmit the package to
Congress in the near future.
water 2000 initiative
Question. In the prepared statement, Madam Under Secretary, you
state that the Rural Utilities Service will continue its commitment to
the Water 2000 Initiative. What are the annual goals that the agency
has met since the inception of this program?
Answer. Water 2000 focuses attention on the importance of safe
drinking water to the overall public, economic and environmental health
of rural areas. The goal of the Water 2000 initiative is to target the
largest possible portion of the Federal investment in water projects to
rural communities with the most serious quality and dependability
needs. The RUS has not set aside a specific amount of funds from its
regular Water and Waste Disposal programs appropriation to be used for
Water 2000. However, the RUS has designated additional funds, such as
the $36 million transferred from the WIC program in fiscal year 1996
and, this year, using some dollars from the Fund for Rural America and
Water and Waste Disposal National Reserve, specifically for Water 2000
projects. In fiscal year 1995 and fiscal year 1996, the RUS invested
over $351 million in poverty interest rate loans and $195 million in
associated grants for 535 projects that met the goals of Water 2000.
Question. What is the agency's long-term strategy for the Water
2000 Initiative, and how will it address the backlog of applications
for water and waste disposal loans and grants totaling over $4 billion?
Answer. The Agency's long-term strategy for the Water 2000
initiative and for addressing the backlog of water and waste
applications will be based on the Strategic Plans prepared by all Rural
Development State Directors, which set forth their goals and objectives
through fiscal year 2002. The Strategic Plans assess the current needs
and resources available in each State, and develop priorities based on
that assessment.
Other components include these activities:
Develop better working partnerships with commercial lenders, state
revolving loan funds, Community Development Block Grant funders and
other sources of credit to attract more funding for rural water
projects. This is happening actively in all states.
Utilize the Rural Community Assistance Program and State Rural
Water Associations to identify potential Water 2000 projects and to
help community groups develop feasible, efficient, cost effective
projects.
Continue actively to promote a wide range of alternatives to
drinking water problems including watershed protection measures, the
use of individual and cluster wells, and multi-community regional
approaches.
Train Rural Development field staff to work hand-in-hand with local
groups to help them find both Federal and non Federal financing
solutions for their water needs.
Streamline the Agency's regulations to allow easier access and to
more effectively target resources toward the most needy communities. In
fact, we anticipate that the streamlined Water and Waste loan and grant
regulations will be published in the Federal Register by July 4.
Question. Madam Under Secretary, you state that over 80 percent of
the budget authority proposed for RCAP for fiscal year 1998 is to
support the water and waste disposal loan and grant programs. How does
this compare to your Water 2000 initiative goals for fiscal year 1998?
Answer. The proposed fiscal year 1998 funding for the water and
waste disposal loan and grant programs will allow the Department to
make measurable progress toward the central goal of Water 2000. The RUS
will give priority for funding in fiscal year 1998 to water projects
that meet the Water 2000 goal.
Question. The loan and grant regulations have provisions that allow
a community to implement private well systems as a potable water
source. In the Water 2000 action plans submitted from the regional
offices to Headquarters contains very few, if any, projects that have a
recommendation to implement private well systems. Are private well
systems more cost effective than to build a public system in an area
with scattered population? How is cost-effectiveness integrated into
the decision making process to provide solutions?
Answer. Cost effectiveness is always a priority. It has been the
RUS' experience that the reason communities develop or expand public
water systems is in response to inadequate ground water quantity or
unacceptable ground water quality. The RUS generally believes that if a
private well can be constructed at a reasonable cost with a sufficient
quantity and quality of water, individual private wells may be the best
solution. However, if well water is contaminated or of an undependable
quantity, public water systems such as those financed under the RUS
program would be an option that many communities would want to explore.
The RUS can and does finance public systems that use wells which serve
individual residences or businesses or wells that serve small clusters
of users. Water and Waste Disposal funds must be used to finance public
facilities--facilities owned and maintained by a public body, non
profit organization, or Indian tribe. Individual home owners, farmers
and ranchers, and business owners, if eligible, could access other
programs to develop or improve an individual well. We would not expect
to see many public systems being developed using individual wells as
source water because individual owners could likely operate and
maintain individual wells more efficiently than public operators.
Question. How do the regional offices formulate their
recommendations for potable water needs? Who was consulted and what is
the criteria established to make the recommendation?
Answer. The Rural Development state offices administer the water
and waste water programs in the field. State Offices do not formulate
recommendations for potable water needs. State Offices have, on
occasion, assessed the needs based on available information such as
applications for RUS funding on hand and data from others that have
such information. These cooperating sources have included state and
local health, development and environmental agencies, and state Rural
Water Association technicians.
Question. How does the agency certify that applicants for funding
from the rural water financing programs are providing true information?
Is this information investigated? If so, how?
Answer. The Rural Development field staffs that process water and
waste water loan and grant applications review the data provided by
applicants. The data provided by the applicants comes from public
documents such as preliminary engineering reports, financial reports,
etc. In addition, there are one or more public meetings held on each
project. The RUS has staff engineers who evaluate the technical data
and loan specialists who evaluate credit and other factors. Funding
decisions for individual projects are based on a well-established
priority scoring system that directs the funds to the most needy
projects within a state. When an applicant for a rural-based project
meets the statutory eligibility requirements for water and waste
disposal funding and is unable to obtain commercial credit, then RUS
can finance that facility (if it is modest in size and design). The
more needy and less likely to qualify for other credit the communities,
the more likely their project would be funded.
salaries and expenses
Question. The fiscal year 1998 budget request proposes an increase
of $4.5 million for salaries and expenses of the Rural Utilities
Service (RUS) for the improvement of automated business services. Is
the technology that the RUS is planning to use to update their services
required to be compatible with the new technology that other agencies
in USDA are planning to implement?
Answer. The requested $4.5 million for improvement of the Rural
Utilities Service (RUS) automated business services is part of an on-
going effort to modernize the RUS loan accounting system. This effort
started in fiscal year 1993 when the then Rural Electrification Agency
(REA) conducted an Information Strategy Plan (ISP) to identify the
business processes that required re-engineering and modernizing. The
USDA reorganization necessitated a re-evaluation of the ISP which was
accomplished in fiscal year 1995 by a team from the St. Louis Finance
Office and Information Resources Management Division. The Study
reconfirmed the need to modernize the RUS loan accounting system in
providing management with the necessary data to make sound business
decisions. The estimated cost of the modernization effort was
approximately $12 million dollars. The work was started in fiscal year
1996 with $2.9 million dollars and is continuing in fiscal year 1997
with another $1.4 million. The modernization effort for RUS is
coordinated throughout the Rural Development Mission Area to ensure
that what is being developed is compatible with effort within the
mission area as well as the rest of USDA. The development is first re-
engineering the business processes and then considering Commercial-Off-
The-Shelf (COTS) software before starting to code any in-house
requirements. The Chief Financial Officer of USDA is being kept abreast
of the on-going modernization, as is the Chief Information Officer.
Question. Have bids been solicited for this equipment and have any
contracts been signed?
Answer. There is no equipment being solicited for the RUS
modernization effort, at this point.
Question. When does RUS plan to have its field restructuring
completed? Which areas in the field have completed restructuring and
which areas have not begun?
Answer. The field office restructuring process for Rural
Development Agencies should be substantially complete by the end of
this fiscal year.
universal service
Question. The Federal Communications Commission is currently
promulgating the regulations for the 1996 Telecommunications Act which
proposes to shift universal service support for rural telephone systems
from the basis of historic costs to some type of forward-looking costs.
Will the FCC's action of using forward looking costs undermine the RUS
telephone borrower's loan portfolio? Can RUS telephone borrowers repay
their loans if the FCC adopts this formula change? How has the 1996
Telecommunications Act affected the Rural Electrification Act's
statutory responsibilities? Did the new telecom law modify or repeal
any of the mandates of the Rural Electrification Act?
Answer. The Telecommunications Act of 1996 fundamentally changed
the structure of the telecommunications industry in the United States.
The Act, among other things, set the framework to move the local
telephone market from a regulated monopoly structure to a competitive,
deregulated structure. On May 8, 1997, the Federal Communications
Commission (FCC) released its Report and Order on Universal Service.
The FCC stated in the Order that ``consistent with the Joint Board's
recommendation, we find that a cost methodology based on forward-
looking economic cost should be used to calculate the cost of providing
universal service for high cost areas because it best reflects the cost
of providing service in a competitive market for local exchange
telephone service.''
After determining that it would use competitively-neutral forward
looking costs, the FCC examined computer models which model sponsors
postulated could accurately predict the cost of serving any high costs
areas. After an extensive comment period, the FCC determined that none
of the models presented could accurately predict the cost of providing
rural service. Consistent with the comments of the RUS, and others, the
FCC postponed the implementation of the use of the model until January
1, 1999, for ``non-rural companies'' that serve rural areas, and until
at least 2001 for ``rural companies'' that serve rural areas. It is too
early to tell if the FCC can find a model or models that can accurately
calculate the cost to serve rural areas, or how that will effect rural
companies. It is clear, in any case, that as of now the FCC has not yet
found a model that can accurately predict rural costs.
Support for rural companies, of course, comes from many sources,
including the Federal Universal Service Fund, state universal service
funds, access charges and state public utility commission policies. The
income of RUS borrowers will be affected by changing policies with
regard to each of these mechanisms. For example, on average, under the
old system, RUS borrowers received over 55 percent of their gross
income from access charges and a little over 10 percent from universal
service funds. Whether any RUS borrower can meet its RUS debt service
under the changes mandated by the Act, implemented by the FCC, state
legislatures and state PUC's and, of course, the newly competitive
marketplace, will depend on a myriad of factors which will vary from
state to state. What is clear, however, is that at this time most rural
companies are in good financial shape.
Therefore, barring significant changes in the totality of Federal
and State universal service support, Federal and State access charges,
long distance calling patterns, local revenues, the ability to compete,
and state legislative changes, RUS borrowers, on average, should
continue to meet debt obligations. Nonetheless, the RUS has instituted
a Task Force to review all issues relating to lending policies and loan
security. The RUS is also advocating Federal and State regulatory
policies to help ensure sufficient support for rural
telecommunications. The RUS wants to ensure that it will bring the most
benefits to rural residents into the future.
The Act, and the resulting changes in the telecommunications market
and regulatory structure, has, of course, affected the RUS
Telecommunications Program. The RE Act contemplates a monopoly
structure and prohibits the Department of Agriculture (USDA) from
lending to duplicate service. Today's telecommunications market
encourages competition and the duplication of carriers and types of
service, i.e., wireline, wireless and satellite. In areas served by
``rural companies,'' state public utilities commissions will regulate
the type and extent of competition, using a public interest test. Also,
the Federal Universal Service support is portable to new, competitive,
universal service providers. The RUS Task Force is examining this issue
as well. Regarding the preemption by the Telecommunications Act of
1996, the RUS has no current belief that the Telecommunications Act
modifies or repeals any section of the RE Act.
Question. RUS has proposed a rule which rations available credit in
the concurrent Cost-of-Money and Rural Telephone Bank loan programs by
limiting the amount of funds loaned to a single borrower. The agency
has failed to meet the minimum loan levels prescribed by Congress in
each of these loan programs in fiscal year 1996 and may not meet them
in fiscal year 1997. What is the justification for such a proposal?
Please cite the specific provision of the authorizing act which would
give the agency authority to make loans for less than the full amount
applied for when the application is for authorized act purposes.
Answer. From fiscal year 1991 through 1995, RUS had an average
backlog of $55 million for telecommunications loans. If the 10 percent
limitation had been in place during that period, the backlog would have
be negligible. In past years, several borrowers have submitted loan
applications of over $100 million each. Because the size of the
construction projects for these borrowers would not have expended the
funds requested over the 5-year forecast period, about one half of
these funds would have been just a line-of-credit and other borrowers
would have been delayed in receiving funding. At the current level of
funding the 10-percent limitation would equate to a concurrent loan of
$48 million. Because the average size of an RUS loan has been about $9
million, the 10-percent limitation will impact only a small segment of
the borrowers, will make funding available to a larger number of rural
areas per fiscal year, and will have no adverse impact on building
rural infrastructure.
The limited requests for loans in fiscal years 1996 and 1997, can
be attributed to the uncertainty in the industry on support mechanisms
caused by the Telecom Act of 1996. After more information is available
on the FCC universal service proceedings, we expect to see an increase
in loan requests that will exceed available funds.
rural development
rural community advancement program
Question. The President's fiscal year 1998 budget request proposes
a program level of $209 million for direct community facility loans
which is an increase of $72.5 million. The Explanatory Notes state that
300 applications totaling $304 million are currently on hand. When were
these applications received by the department? Is there any unobligated
monies available from past fiscal years to fund these loans? If so, how
much is on hand, by fiscal year, and how many applications will be
funded?
Answer. The majority of these applications were received by the
Department during the past fiscal year, although a few were received
prior to that. Applications may be submitted at any time during the
year, and are prioritized as they are received. Applications on hand at
the end of the fiscal year are not withdrawn, but remain active for
funding consideration during the next fiscal year. All funds authorized
during the previous fiscal years have been obligated.
Question. Is the Department currently receiving new applications?
Answer. The Department receives new applications throughout the
fiscal year.
Question. What is the backlog of applications?
Answer. There are nearly 300 applications on hand totaling $304
million.
Question. How many loans will be funded with the fiscal year 1998
request?
Answer. We expect to fund approximately 315 loans with the fiscal
year 1998 request. The average size of our loans has been decreasing in
recent years as we have been emphasizing the need to leverage funds
from other sources. This has allowed us to stretch our scarce resources
to serve more needy rural communities.
Question. The budget requests an earmark for direct community
facility loan budget authority, community facility grant budget
authority, and for guaranteed business and industry loan budget
authority for fiscal year 1998 totaling $2.5 million for the
Empowerment Zone and Enterprise Community Program. Will this money be
distributed to the State Directors? If so, how will it be distributed
since it is earmarked?
Answer. Earmarked funds are retained in a reserve account
controlled by the National Office and are allocated to States on a
project by project basis. State Directors are responsible for reviewing
applications to determine if the project is specifically identified in
the EZ/EC strategic Plan and approved benchmark documents. Requests for
funds are sent to the appropriate Division in the National Office in
the same manner as requesting reserve funds for regular programs. The
priority/selection scoring criteria outlined in application regulations
are addressed and forwarded along with funding requests. Projects are
ranked based upon scores and funded accordingly.
The appropriate Divisions send these requests to the Office of
Community Development for review, comment, and coordination.
Question. The explanatory notes state that the USDA Rural
Development State Offices completed a Needs Assessment that shows rural
water needs of about $10 billion. Would you please expound on this
assessment. Did all 50 states participate in this assessment?
Answer. The Rural Utilities Service coordinated this assessment
through the USDA Rural Development State offices in the second half of
1995. State office Rural Development personnel worked with
representatives from county and local governments, the Rural Community
Assistance Program network, the State Rural Water Association network,
other Federal agencies, State public health and other State agencies,
and other groups as appropriate to complete the assessment. The results
indicated that just over 3 million rural households have drinking water
improvement needs of approximately $10 billion. All 50 States
participated in the assessment, which used the requirements of the
State Drinking Water Act as the basic standard of estimating need.
Question. The President's fiscal year 1998 budget request proposes
a decrease in the program level funding for direct water and waste
disposal loans. The fiscal year 1997 level was $739 million and the
fiscal year 1998 proposed level is $734 million. The subsidy
appropriation for these loans increases under the proposed request from
$66.7 million in fiscal year 1997 to $71.6 million in fiscal year 1998.
How many loans can be funded in each of fiscal years 1997 and 1998 at
these proposed levels?
Answer. In fiscal year 1997, the RUS estimates that 1,068 direct
loans can be made at the current estimated program level. The fiscal
year 1998 estimate is 1,034 direct loans. However, as with the Rural
Utilities Assistance Program of 1996 and 1997, the Rural Community
Advancement Program provides funding flexibility between the Water and
Waste Grant and Loan programs. Also up to 25 percent within a State's
allocation can be transferred between program areas within RCAP.
Further, the matching and mandatory grants to States must be used for
RCAP program purposes, so the loan level will very likely be enhanced
above the amount currently projected if States have a priority need for
direct water and waste loans.
Question. Given the need, why does the fiscal year 1998 budget
propose a decrease below the fiscal year 1997 program level?
Answer. The decrease in water and waste program levels is due
primarily to designating a portion of the Water and Wastewater Program
monies for matching and mandatory grants for state governments as
required under the Rural Community Advancement Program. If total RCAP
funding for fiscal year 1998 were compared to program funding in fiscal
year 1997, there is, in fact, an increase in BA and program level.
Comparable figures are:
Fiscal year 1997 RCAP funding: BA $636 million with program
level of $2.249 billion.
Fiscal year 1998 RCAP funding: BA $688 million with a program
level of $2.494 billion.
Question. The fiscal year 1998 budget request proposes a decrease
for the circuit rider program from the fiscal year 1997 level of $5.2
million to $5.15 million. Why does the Administration propose a
decrease in this very important technical assistance program? What
other means does the agency have to provide technical assistance to
small communities?
Answer. Mr. Chairman, we believe our current request will help us
fulfill those program objectives, yet appropriately reflects the fiscal
restraint required of all government programs today. The circuit rider
program provides an invaluable service to small communities, and saves
the government significant sums as well. The technical assistance
rendered through the circuit rider program enhances the life of the
water and waste water treatment systems and means that the Federal
government will not have to finance the replacement of these systems as
frequently.
Besides the circuit rider program, our staff is also able to
provide some technical assistance.
Question. The Administration has proposed no increase in fiscal
year 1998 for direct business and industry loans. The subsidy budget
authority does not need to be appropriated since the borrower interest
rate has changed to a rate equal to prime, producing a negative subsidy
rate. Would you please explain why the Administration proposes no
increase and the effects of a negative subsidy rate.
Answer. The Administration believes $50 million is an appropriate
loan level for the direct Business and Industry program. It is a
relatively new program which will be targeted to persistent poverty
program areas. Once the program is operational and customers are more
aware of the program, the Administration will review the program and
propose funding levels consistent with demand and other priorities.
Question. For the guaranteed business and industry loans, the
fiscal year 1998 budget request proposes a decrease of $77 million. The
fiscal year 1997 program level was funded at $688 million and the
fiscal year 1998 proposed program level is $610 million. There is a
proposed decrease in the subsidy appropriation also. The fiscal year
1997 subsidy level was funded at $6.4 million and the proposed fiscal
year 1998 level is $5.9 million. How many loans will be made at the
level proposed for fiscal year 1998 versus that proposed for fiscal
year 1997?
Answer. The average guaranteed loan in fiscal year 1996 was $1.14
million. If the average loan size remains constant, then 603 loans
would be made in fiscal year 1997 and 535 in fiscal year 1998.
Question. With no change in the proposed fiscal year 1998 funding
level for direct loans and a decrease for the guaranteed loans, should
the committee be of the opinion that there will be less of a demand for
guaranteed loans in the future?
Answer. The President's budget assumes a fairly consistent level of
demand between 97 and 98. Assistance is available to states for
business assistance through the grants to states as well as the rural
business and cooperative development funding stream.
Question. Why does the Administration propose to not fund rural
business opportunity grants for fiscal year 1998? How many applications
for these grants does the agency have on hand? Is the available funding
adequate to meet this demand?
Answer. Although specific funding is not requested for the rural
business opportunity grants, it would be an eligible purpose for
funding appropriated to the rural business and cooperative development
funding stream, allowing State Directors to provide these grants in
those cases where it is a priority. In addition, the regulations for
the program will not be published until later in the fiscal year and
under the terms of the Rural Business Assistance Program, we have the
authority to shift funds from other business programs into this account
if needed. We have no applications on hand, as of yet, because the
regulations have not been published.
Question. In your prepared statement, Madam Under Secretary, you
state that the agency will be able to track the expenditures for RCAP.
Please describe the tracking system that the agency has developed. How
will the Rural Development Agency inform the Committee of the amounts
of funding transferred within RCAP?
Answer. Mr. Chairman, the system simply reflects each program under
RCAP and the applicable budget authority and permits the State Director
and the appropriate Administrator(s) simultaneously to see the effects
of the proposed transfer on each program, both within the State and at
the National cap of 10 percent. If the transfer were to be agreed upon,
the State Director would still be required to submit a written transfer
request to be signed by the appropriate Administrator(s). Hence,
transfers could be summarized by program and by state. That information
could be made available to the committee on a regular basis as
frequently as desired.
______
Questions Submitted by Senator Stevens
rural development
fund for rural america
Question. The Fund for Rural America is intended to improve
economic stability and quality of life in rural America, as well as
improve the competitiveness of the U.S. agriculture and forestry
industry sectors. I understand that of the $100,000,000 made available
under this program, some funds are intended to establish Centers to
administer this new initiative. Have locations for these Centers been
decided?
Answer. Senator Stevens, the part of the Fund for Rural America to
which you speak is within the jurisdiction of the Under Secretary for
Research, Education and Extension, but I understand the centers will
not be established until the grant awards are announced.
Question. Are you considering the needs of Alaska?
Answer. The Congressional and Departmental guidelines for the fund
for Rural America will insure that Alaska's needs are considered. The
Fund focuses on practical problem solving by research, education, and
extension teams working across institutions and disciplines in areas
faced with the greatest agricultural, environmental, and rural
development challenges. Alaska clearly faces serious challenges in all
of these areas. Moreover, Alaskan institutions have submitted 10
applications for Planning Grants, several of which cross traditional
disciplinary and institutional lines. These applications will be
considered by panels of peer experts in May and June as part of the
Fund decision-making process.
However, awards will ultimately be made on a merit basis that looks
across all of the 425 Planning Grant proposals submitted. Hence, it
would be premature to conclude that Alaskan institutions will or will
not win grant support. Award decisions will be announced in late June
or early July. If proposals are not selected for support, each of the
principal investigators will receive an explanation of the process,
copies of the materials developed during the review, and information on
similar projects that were selected for funding and will share project
results.
Question. The University of Alaska has applied for a grant to
locate one of the program's Centers in Alaska. Would such a Center
assist rural Alaskans improve their dire sanitation, water supply,
energy, high unemployment and economic development circumstances?
Answer. Several Alaskan institutions have submitted proposals that
address the concerns you raise. The concerns are at the core of the
Fund's mandate to enhance rural economies and improve the quality of
life in rural communities. Hence, if funded, an Alaskan Rural
Development Center would be expected to focus on these issues. As noted
in the previous question, however it would be premature to conclude
that the University of Alaska proposals or any of the other Alaskan
proposals will be funded until after the merit review of all the
applications submitted is completed.
rural business-cooperative service
rural business enterprises
Question. Last year the Committee provided an appropriation of
$53,750,000 for the Rural Business-Cooperative Program for activities
supporting rural business enterprises. This program is particularly
important to Alaska's timber dependent communities as they struggle to
adjust to the loss of timber supply from federal lands. The Committee
included report language last year encouraging consideration of the
needs of our Alaska Villages initiative and the community of Thorne
Bay, Alaska. What is the status their grant requests?
Answer. RBEG applications were received for both of these projects
and were forwarded by the State to the National Office for funding from
the National Office reserve. These projects will compete with other
projects on the National Office reserve list for the next funding
cycle, which is scheduled to occur sometime after pooling on July 11,
1997.
______
Questions Submitted by Senator Bumpers
rural development
the fund for rural america
Question. The 1996 Farm Bill provided the Secretary authority to
expend $100 million on a number of programs at his discretion. Can you
provide a list of actual program awards that have been made using this
fund? Please explain why you think the use of this fund for rural
development programs has been more innovative than how this
subcommittee might have allocated the funds. How do you intend to use
the $1 million allocated in the Fund for Rural America for technical
assistance for enterprise communities and empowerment zones and will
they be available on a competitive basis?
Answer. Senator Bumpers, a portion of the Fund for Rural America
was used to augment the 1997 program level for single family housing
loans. This was necessitated by the shortfall in program level caused
by higher interest rates which were higher than anticipated when the
1997 budget was being developed. In this specific instance, individual
projects cannot be identified because the funds were allocated to the
States and commingled with the appropriated level. Other project
decisions have not yet been made even though negotiations have been
completed. However, I will provide for the record specific projects in
distance learning and telemedicine grants, rural business enterprise
grants, and water and waste disposal loans and grants.
[The information follows:]
DISTANCE LEARNING AWARDEES
------------------------------------------------------------------------
Project Amount City/State
------------------------------------------------------------------------
Hubbard Independent School Dist. $249,492 Hubbard, TX
Amber State University.......... 115,000 Ogden, UT
Sweet Grass County High School.. 319,906 Big Timber, MT
Delta Research Center........... 160,000 Portageville, MO
North Central School District... 302,009 Rock Lake, ND
Merged Area (Education) V 330,000 Fort Dodge, IA
Community College Dist..
Allen Parish School Board....... 330,000 Oberlin, LA
Educational Service Unit of Unit 330,000 Beatrice, NE
5.
Hamilton-Jefferson Counties 330,000 Mt. Vernon, IL
Regional Office of Education.
Junior College Dist. of 330,000 Hillsboro, MO
Jefferson County.
Southeast Alabama Regional 330,000 Dothan, AL
Planning and Development Commis-
sion.
Montgomery Community College.... 127,593 Troy, NC
Southwest Virginia Educations 177,600 Abingdon, VA
and Training Network.
Center for Rural Development.... 303,900 Somerset, KY
Middle Tennessee State 300,000 Murfreesboro, TN
University.
Regional Education Service 330,000 Shawboro, NC
Alliance.
Fayette County Board of 189,280 Fayette, AL
Education.
------------------------------------------------------------------------
TELEMEDICINE AWARDEES
------------------------------------------------------------------------
Project Amount City/State
------------------------------------------------------------------------
Rapid City Regional Hosp........ $330000 Rapid City, SD
The Evangelic Lutheran Good 330,000 Sioux Fall, SD
Samaritan Society. (also serves ND)
Medcenter One Health............ 300,178 Bismarck, ND
St. Charles Medical Center...... 330,000 Bend, OR
Ohio State University........... 325,837 Athen, OH
University of South Carolina 329,200 Columbia, SC
School of Medicine.
------------------------------------------------------------------------
RURAL BUSINESS ENTERPRISE GRANTS FUNDED FROM FUNDS FOR RURAL AMERICA
----------------------------------------------------------------------------------------------------------------
State/project Amount Community
----------------------------------------------------------------------------------------------------------------
AK: Kootznoowoo, Inc......................... $250,000 (No city listed) Angoon County
IL:
Lincoln Land Community College........... 1,500,000 Springfield, Sangamon County
Prairie Hills Resource Conservation and 300,000 Macomb, McDonough County
Development, Inc.
Two Rivers Council Foundation, Inc....... 48,500 Quincy, Adams County
Village of Lena.......................... 199,000 Lena, Stephenson County
Edgar County Board....................... 100,000 Paris, Edgar County
ME: City of Lewiston......................... 200,000 Lewiston, Androscoggin Cty
NJ: Borough of Buena......................... 300,000 (No City Listed) Angoon County
ND: Mercer Oliver Economic Development....... 500,000 (No City Listed) Mercer County
ND: Tuttle Area Development Corporation...... 479,100 Tuttle, Kidder County
SC: South Carolina Healthcare Recruitment and 900,000 Entity in Richland County. Projects can be
Retention Centers. located in Newberry, Allendale, Bamberg, and
Florence Counties
SD: National Enterprise Development Center... 98,400 Huron, Beadle County
UT: Wendover Town............................ 500,000 Wendover, Tooele County
VA:
Franklin County Commerce Center.......... 475,000 Rocky Mount, Franklin County
Southside Trng Employment Placement, Inc. 500,000 Farmville, Prince Edward
----------------------------------------------------------------------------------------------------------------
RURAL UTILITIES SERVICE--WATER AND WASTE PROGRAM EARTH DAY PROJECTS
[April 16, 1997]
----------------------------------------------------------------------------------------------------------------
National reserve funds Rural dev. totals State's allocated funds
State/project -----------------------------------------------------------------------------
Loan Grant Loan Grant Loan Grant
----------------------------------------------------------------------------------------------------------------
AR:
Perry (in Town)............... $166,300 $6,800 $961,000 $1,674,000 $794,700 $1,667,200
Pangburn...................... 145,600 266,400 146,737 266,400 1,137 ...........
AZ:
Maricopa Water Dist........... ........... 100,000 ........... ........... ........... ...........
Havasu Heights Dist........... ........... 80,000 ........... ........... ........... ...........
City of Eloy.................. ........... 800,000 318,000 800,000 318,000 ...........
CA: Allensworth................... 114,540 506,250 114,540 506,250 ........... ...........
IL: Ford Heights.................. 500,000 500,000 1,500,000 1,258,000 1,000,000 758,000
KY: Nicholas County............... 247,000 247,000 247,000 247,000 ........... ...........
LA:
Town of Pollock............... 150,500 599,500 3,425,000 652,000 3,274,500 52,500
White Castle.................. 230,000 ........... 230,000 ........... ........... ...........
Dequincy...................... ........... 227,000 349,500 275,000 349,500 48,000
MD: Allegany (Old Town)........... 245,000 550,000 245,000 550,000 ........... ...........
ME: Great Salt Bay................ 700,000 ........... 700,000 ........... ........... ...........
MI: Village of Benzonia........... 600,000 171,000 600,000 171,000 ........... ...........
MN: Ormsby........................ 250,000 ........... 250,000 175,000 ........... 175,000
MO: Reeds Spring.................. ........... 72,200 ........... ........... ........... ...........
MS:
Harmony Water Assoc........... 1,144,000 1,400,000 1,144,000 1,400,000 ........... ...........
Delta City.................... 78,400 198,600 78,400 198,600 ........... ...........
MT: Columbus...................... 700,000 ........... 2,064,000 ........... 1,364,000 ...........
NH: City of Berlin................ ........... 444,510 ........... 1,500,000 ........... 1,055,490
NJ: Elmer......................... 449,383 ........... 702,000 ........... 252,617 ...........
NM: Acoma Pueblo.................. 375,000 1,125,000 375,000 1,125,000 ........... ...........
PA:
Shannock Valley General....... ........... 1,650,000 2,600,000 2,705,000 2,600,000 1,055,000
Otto Township................. ........... 1,650,000 3,665,000 2,299,000 3,665,000 649,000
TN:
West Warren-Viola............. 597,000 300,000 597,000 398,000 ........... 98,000
Calhoun Charleston............ 103,000 ........... 103,000 ........... ........... ...........
TX: Arroyo Water Supply........... 593,000 756,200 593,800 756,200 800 ...........
UT: Leeds Town.................... 160,000 495,000 160,000 495,000 ........... ...........
VA:
Wythe County--Ft Chiswell..... 1,260,600 ........... 6,512,100 4,400,900 5,251,500 4,400,900
Henry Co.--Oak Level.......... 1,282,840 1,036,200 1,282,840 1,036,200 ........... ...........
WV: Reedsville.................... 450,000 514,000 450,000 514,000 ........... ...........
----------------------------------------------------------------------------------------------------------------
As you are aware the Act requires the funds to be expended through
existing rural development programs which means the existing statutes
and regulations apply to funding decisions. This, in addition to the
decision of the Secretary to reduce the backlog of applications within
these programs, limited the innovative nature of projects funded. We
are, however, making $1.7 million available from the FUND for value-
added cooperative development projects for which there is no specific
appropriation in fiscal year 1997. This is one area in which we hope to
fund some innovative projects.
The $1 million made available for technical assistance to
empowerment zones/enterprise communities will also be innovative. In
order to maximize the use of Federal dollars, we are negotiating
agreements with private foundations which will inject some of their
funds, along with ours, into a pool of funds which will be used for
technical assistance. These funds will be available on a competitive
basis.
Question. I note that some of the Fund for Rural America has been
allocated to programs where there has been a decline from the expected
program level (such as section 502 housing) and other programs where
there is a backlog. Would you please provide this subcommittee a list
of programs under the Rural Development mission area for which there is
a backlog and indicate the level necessary to fund those applications?
Answer. In fiscal year 1996, RUS' Distance Learning and
Telemedicine Grant Program received 150 financing requests totaling $38
million--only $7.5 million of funding was available for the fiscal year
and that amount was provided to 29 applicants. This resulted in a
backlog of applications totaling $31.5 million. In January 1997, RUS
received an additional $6.5 million in funding authority from the Fund
for Rural America. Utilizing those funds, RUS was able to approve an
additional 23 financing requests, reducing the backlog to $24 million
for applications received in fiscal year 1996.
The RUS Telecommunications Loan Program has a backlog of $57
million, all of which is for hardship loans.
The RUS Electric Program currently has a backlog of 98 applications
totaling $580 million.
The Water and Waste Program currently has on hand $2.72 billion in
loan applications and $1.27 billion in grant applications. The RUS
Water and Waste Disposal Program was allocated $16,695,115 from the
Fund for Rural America. Those monies have been used to help fund
approximately 31 projects in 22 states.
rural housing service
The Community Facilities Direct Loan Program has a backlog of
applications on hand in the amount of $304 million. We expect to fund
approximately 290 loans in fiscal year 1997. However, new applications
are received continuously throughout the fiscal year, and based on
experience, we expect that the backlog will remain at its current
level.
The single-family backlog is listed below as follows:
------------------------------------------------------------------------
Backlog of
Program applications Funding level
------------------------------------------------------------------------
Sec. 502 direct SFH..................... 35,000 $1.75B
Sec. 504 housing repair grants.......... 3,200 $15M
Sec. 523 self-help housing.............. \1\ 92 \1\ 10.6M
Housing Credit Sales.................... ( \2\ ) 52-70M
------------------------------------------------------------------------
\1\ The Agency was unable to fund 23 grantees requesting $4.5 million in
fiscal year 1997. Sixty-nine grantees were funded for fiscal year 1997
at 75 percent of their request creating a balance, or backlog, of $6.1
million. Therefore, the total backlog for funding Section 523 Self-
Help Housing applications is $10.6 million.
\2\ There is no ``backlog'' of applications for credit sales; however,
we average 1,500-2,000 properties in inventory.
rural utilities service
electric and telecommunication loans
Question. RUS has initiated a plan to require rural electric
borrowers to submit plans based on a four year period rather than the
traditional two year period. What did this change do to demand for RUS
financing?
Answer. In January 1995, RUS published regulations that allow
distribution borrowers to submit loan applications covering a period of
up to four years. The period covered by the application is determined
by the borrower, up to a maximum of four years. The longer loan period
was intended to reduce administrative costs to borrowers, to
supplemental lenders, and to RUS of preparing and processing frequent
loan applications.
The longer loan period has resulted in applications for larger
loans. In fiscal year 1996, RUS used all its budget authority for
municipal rate loans and hardship rate loans, approving 97 municipal
rate loans ($544,616,858) and 23 hardship rate loans ($90,577,664).
At the end of fiscal year 1996, RUS had a backlog of 106
applications for municipal rate loans ($709.0 million) and 28
applications for hardship rate loans ($119.9 million). These carryover
applications from fiscal year 1996 exceed the total budget authority
for fiscal year 1997 ($455,564,516 for municipal rate loans and
$68,785,578 for hardship rate loans). Additional applications have been
received in fiscal year 1997.
Because of this backlog, RUS published interim final rules in
February 1997 that allow the agency to process loans in two parts
during a fiscal year when applications substantially exceed available
funds. The first part of the loan is processed in its regular place in
the queue. The second part will be automatically processed based on the
same application documents as if it were received by RUS exactly two
years later than the first part.
Because of the two-part loan processing, the queue for municipal
rate and hardship rate loans is now about 8 months. A year ago the
queues for municipal and hardship rate loans were 4 months and 9
months, respectively.
Question. What is the current status of the planning requirement?
Answer. The borrower's construction planning requirement is based
on the loan application periods selected by the borrower. A
construction work plan in support of a loan application must cover a
period at least as long as the period covered by the loan application.
The borrower's financial planning requirement is not affected by
the loan application period. Borrower financial forecasts submitted in
support of distribution loans cover a minimum period of ten years.
Question. Can you please respond to the continuing claims that
rural electrification is a completed mission and not in need of further
federal assistance?
Answer. The mission of the Electric Program is to ensure that rural
customers continue to have access to reliable, reasonably priced
electric service to enable a reasonable quality of life and the
possibility of continued economic development. Serving rural areas
costs more than serving urban or suburban areas and the RUS program
provides some measure of assistance for universal electric service.
Like universal service assistance in the telecommunications and
transportation industries, the need to support a national basic
infrastructure is still a challenge. The RUS program provides
assistance, leverages both public and private funds and sets standards
for this basic infrastructure in rural America.
Electric service in rural areas must be both reliable and
reasonably priced. Today's technology places ever greater demands on
rural electric systems. In addition to regular periodic maintenance,
borrowers must continuously upgrade their systems to ensure that rural
residents have access to the power needed to support their farms,
industries, supermarkets, medical centers, and schools.
Electric bills reflect both the cost of generating power and the
cost of lines to deliver the power. The entire industry is highly
capital intensive, and economies of scale are a significant factor in
the cost of serving electric consumers. Data from 1995 show that RUS
borrowers serve only about 6 consumers per mile of line, compared with
about 35 consumers per mile for investor owned systems.
Since virtually all RUS borrowers are cooperatives or other non-
profits, their electric rates are based on the cost of service, with no
profit component. Based on the cost of service, the relatively low
consumer density translates directly into higher rates. Department of
Energy data for 1995 show that the average residential rate for
borrowers in 36 states is higher than the state average, even with RUS
financing.
The high per consumer cost of electric lines in rural areas will
persist even in a restructured industry. Rural economic development and
the well being of rural residents depends on high quality and
reasonable priced electricity. Without federal assistance and
assurance, many rural areas may be left behind.
Question. Of electric power available in rural areas, what portion
of the customer cost is associated with generation, transmission,
distribution, and maintenance?
Answer. Customer cost depends on the costs of generating and
delivering power. Both costs vary widely. Generating costs depend on
the fuel source, plant characteristics such as age and size, and other
factors. Transmission and distribution costs depend on consumer density
and factors such as local geography and weather. An additional
significant factor is state and local utility taxes associated with
generation, transmission, and maintenance. These taxes vary widely
across the country. Current consumer bills do not show a breakdown of
these costs.
For CY 1995, the total costs reported by RUS borrowers were as
follows:
Distribution borrowers ($1,000)
Cost of power.................................................$9,975,078
Distribution expense--operation............................... 387,443
Distribution expense--maintenance............................. 709,168
Power supply borrowers ($1,000)
Cost of power.................................................$5,758,350
Transmission.................................................. 291,651
Distribution.................................................. 14,673
Maintenance expense........................................... 528,840
Question. What is the current status of rural electric funds for
fiscal year 1997?
Answer. For municipal rate loans, loan authority for fiscal year
1997 is $455,564,516. As of April 24, 1997, RUS had approved 78 loans
totaling $397,559,000, with $58,005,516 remaining. Eighty five
applications are pending, totaling $575,013,820.
For hardship rate loans, loan authority for fiscal year 1997 is
$68,785,578. As of April 24, 1997, RUS had approved 13 loans totaling
$45,435,000, with $23,350,578 remaining. Twenty-one applications are
pending, totaling $86,697,900.
For loan guarantees, loan authority for fiscal year 1997 is
$300,000,000. As of April 24, 1997, RUS had approved 6 loans totaling
$67,852,000, with $232,148,000 remaining. Five applications are
pending, totaling $176,783,000. In addition, RUS guaranteed FFB loans
totaling $68,439,408 have been repriced or refinanced in fiscal year
1997.
rural housing service
Question. The President's National Partnership for Home Ownership
calls for a goal of 8 million homes by the year 2000. What is the
projected federal cost to attain this goal?
Answer. It is not anticipated that the federal government will fund
all 8 million homes for the President's National Partnership for Home
Ownership. These homes will also be funded by other partnerships, such
as, private lenders, state agencies, and non-profits. If Congress were
to provide $1 billion of funding in fiscal years 1998, 1999, and 2000
to the Section 502 Direct Single Family Housing loan program and $3
billion in fiscal years 1998, 1999, and 2000 to the Section 502
Guaranteed Single Family Housing loan program, the Rural Housing
Service would be able to assist 210,000 families with home ownership at
a budget authority cost of $475 million.
Question. I understand your agency has begun to use escrow accounts
to help borrowers better manage their financial resources. How has the
use of escrow accounts for rural housing borrowers effected the program
in terms of savings, defaults, and other identified goals of this
action?
Answer. The Agency is completing the conversion in seven phases.
Beginning February 1, 1997, approximately 100,000 loans were converted
and an equal amount is converted monthly until completion of the
process in September of 1997. Therefore, it is too early to measure
results as only approximately 200 borrowers are currently on escrow.
This number will grow quickly as all new borrowers are required to
escrow and it is estimated that 60-70 percent of the existing caseload
(600,000 borrowers) will be on escrow by the end of fiscal year 1998.
Savings will be substantial and will be realized from three main areas.
1. Significant reductions in tax vouchers from program loan
accounting funds. Over the past 3 years the Agency has vouchered an
average of $50 million per year to pay overdue taxes. In many cases
these vouchers were just to prevent a tax sale and not to pay all
delinquent taxes owed.
2. Uninsured losses. This is estimated a figure that the Agency was
never able to adequately capture under the old program loan accounting
system. In the past these losses were buried in the foreclosure loss
category. Force placed insurance should eliminate these losses.
3. Reduced foreclosures. Timely, consistent servicing, escrow and
force placed insurance should greatly increase the Agency's ability to
provide supervised credit to rural housing borrowers. With these new
tools added to existing subsidy and moratorium authorities, the Agency
is confident that the number of foreclosures will be reduced by at
least 50 percent.
Question. The budget request includes $52 million for HUD section 8
contracts. Why should this subcommittee be expected to help provide
funding for HUD programs?
Answer. Over time, the Federal government will save money from
replacing expiring Section 8 contracts in Section 515 projects with
USDA rental assistance. RHS recommends this transfer if the
Appropriations Committee is willing to increase the Agriculture
Appropriation Sub Committee's Mark this year to allow these long term
savings for the government.
Question. Can you identify any RHS programs we could reduce in
order to provide the $52 million for section 8?
Answer. If the $52 million for the conversion of HUD section 8 HAP
contracts to RHS RA contracts is not to be funded as requested in the
President's Budget, the Administration would object to funding the
conversion at the expense of other Rural Housing Programs. We have
respectfully requested that the Congress make the necessary adjustments
during its consideration of the fiscal year 1998 Budget Resolution,
602(b) allocations, and appropriations bills. The President's request
will substantially reduce our future needs for total rental assistance
funding and administrative costs.
section 515 rental assistance
Question. I note the section 515 rental assistance increases by
$16.8 million to $540.9 million? Does this include the assumption of
HUD section 8 contracts?
Answer. For the traditional Section 521 rental assistance grants,
$541 million is requested. That is $16.8 million above the fiscal year
1997 enacted level and does not include the section 8 contracts. An
additional $52 million is requested above $541 million for the
conversion of the dual track Section 8/515 HAP contracts to Section 521
RAP contracts. The total request is $593 million.
Question. Is this amount for both renewal of existing contracts as
well as new commitments?
Answer. The funding request will address the renewal of 34,100
expiring RHS rental assistance units. In addition, the fiscal year 1998
request will fund new rental assistance units to be used in conjunction
with rehabilitation new construction loans.
section 502 housing program
Question. As you note, the program level for section 502 housing
dropped from the projected $1 billion to $582 million due to increased
interest rates. You imply that the increased budget authority in this
account for fiscal year 1998 will still result in a $1 billion program.
However, already we have seen interest rates increase since submission
of your budget request. Give current interest rates, what do you
project the program level would be for section 502 housing at your
requested level of budget authority?
Answer. Senator Bumpers, as I have testified, accurate estimates of
long-term interest rates within this economy are very difficult to
make. In mid March of 1997, I was very comfortable with the estimates
because the rates at that time and those reflected in the budget were
less than 50 basis points apart. As you note, we have recently seen the
rates increased by the Federal Reserve Board, and now there is a
difference of 100 basis points. If that difference remains in effect,
the program level for 502 housing would drop to about $750 million.
Question. Will you submit re-estimates nearer to enactment of the
fiscal year 1998 appropriations bill in order to better coordinate
budget authority with expected program levels?
Answer. While I do not anticipate the Administration will formally
submit re-estimates of the subsidy rates, I will assure you that my
staff will keep the subcommittee staff informed of the difference in
rates and the resulting effects as frequently as the staff desires.
However, the forecasted rates are the Administration's assumptions and
we anticipate an appropriate loan level in the 502 program.
community facilities program
Question. You mention a number of types of projects, such as day
care, fire protection, etc. that can be funded through your Communities
Facilities program. What types of projects have communities identified
as their highest demand in terms of program dollars and number of
actual projects?
Answer. The following types of projects have been identified by
communities as their highest demand in terms of program dollars and
number of actual projects funded:
------------------------------------------------------------------------
Purpose Amount Number
------------------------------------------------------------------------
Health Care........................... $1,956,000,000 2,282
Public service \1\.................... 1,011,000,000 2,161
Public safety......................... 476,000,000 2,880
------------------------------------------------------------------------
\1\ Public service includes cultural, educational, energy, and
transportation facilities, public buildings, and industrial sites.
rural business and cooperative service
business and industry loans
Question. I have heard complaints from some states that the
Business and Industry fund was pooled earlier than usual this year.
When was the B&I account pooled this year? Was that the normal time for
national pooling? If not, were states allowed the opportunity to
obligate funds in a normal manner from obligations on hand? Was this
action disruptive to states?
Answer. The pooling of the Business and Industry (B&I) Guaranteed
Loan Program funds normally has been done in two stages, the first
occurring in April and the second in August of each year. In an effort
to give State Directors more flexibility as well as control over their
allocation of guarantee authority, a decision, early in the fiscal
year, was made to pool only once during fiscal year 1997. This was to
occur on July 11, 1997. However, numerous States, through extensive
outreach activities, depleted their B&I Guaranteed Loan Program
allocation and requested funding from the National Office reserve,
while several States had not obligated nor had application activity to
utilize 50 percent of their allocation. National reserve funding was
depleted, and a large demand from numerous States for National Office
reserve funding continued, thus it was decided to conduct an early
pooling of the B&I funds, which was done on March 10, 1997.
appropriate technology transfer for rural areas
Question. You mention that the ATTRA program received a record
number of inquiries in fiscal year 1996. Would you please distinguish
ATTRA activities from those of Extension?
Answer. The Appropriate Technology Transfer for Rural Areas (ATTRA)
program serves as the central source for answering questions about and
encouraging agricultural producers to adopt sustainable agricultural
practices which allow them to maintain or improve profits, produce high
quality food and reduce adverse impacts to the environment. ATTRA
effectively combines the knowledge of the university system, the
Extension Service, and other state and commercial entities into a
single comprehensive center of expertise.
ATTRA offers a unique and complementary service to that provided by
Extension, as illustrated by a continuing increase in the number of
annual requests to ATTRA, from 4,000 annually in fiscal year 1989 to
more than 18,000 in fiscal year 1996. Response by mail (more than 67
percent in less than a week) and, increasingly, by electronic means,
offers farmers the convenience of receiving information on options and
choices at home or on the farm. Because of its national scope, ATTRA
staff more frequently access information on successful alternatives to
conventional production methods for commodities, as well as a wider
diversity and scale of enterprises, practices, and farmer experiences
specifically related to sustainable agriculture. Through ATTRA, useful
ideas and solutions can more easily cross state and agency lines, and
can also include those developed and tested by innovative farmers and
organizations. Through ATTRA caller surveys, farmers consider these
kind of resources to be very important, and they value approaches which
differ or add to the approaches taken by university-based research
sources accessible to extension.
Question. What role is ATTRA playing in the overall goal of
achieving a more sustainable agricultural base?
Answer. ATTRA combines the knowledge of the university system, the
Extension Service, and the State and commercial entities into a single
comprehensive center of expertise on sustainable agriculture practices.
Question. Is there anyway to document the role of ATTRA's role in
environmental protection or assisting rural economies?
Answer. Over the last 12 months, 77 percent of the requests to
ATTRA have pertained to production and management options which
contribute to environmental protection. Farmer requests tallied in
ATTRA's database include questions about: (a) reducing pesticide and
other chemical use; (b) improving soil fertility with less
environmental impact, especially on water quality; (c) diversifying
crop and animal production in ways that diversify income sources; (d)
meeting new markets created by greater numbers of consumers interested
in food produced in more environmentally sound ways; and (e) keeping
more of the income for the farm family by cutting costs and making
greater use of local resources.
ATTRA maintains a database and other electronic and physical
information files which track caller requests, background on their farm
enterprises and staff responses, now numbering more than 100,000 as of
March 1997. ATTRA is also currently analyzing hundreds of feedback
surveys which describe how callers have put ATTRA's information to
work.
During their calls to the national 800 line, reasons given for
seeking out ATTRA include one or more of these motivating factors:
Strong desire to continue making a living from agriculture, a priority
on being good environmental stewards as well as good farmers, and the
importance of contributing to the economic well-being and future of
their local rural communities. When ATTRA staff interview callers, a
majority of them (62 percent in a recent sample) say that they were not
able to get their questions answered elsewhere.
alternative agricultural research and commercialization corporation
project investment repayments
Question. You mention that AARC has begun receiving repayments from
program participants. How much has been repaid?
Answer. To date, the AARC Corporation has received $82,700 in
royalties, $50,000 from the sale of stock.
Question. What kind of equity positions does AARC have with
borrowers?
Answer. AARC-funded companies are not ``borrowers'' in the
traditional sense of the word, i.e. someone with whom a loan has been
arranged. Loans usually carry a set repayment schedule and a pre-
determined rate of interest that is assessed as the price of borrowing
the money. Although authorized to make loans under the enabling
legislation that established the AARC Center (now AARC Corporation),
the Corporation's Board of Directors has decided not to use that
authority. Instead, the Corporation makes investments much as any
private sector venture capital fund does. The major differences between
AARC's approach and the private sector are that AARC is more patient
about when it expects to see some return and, overall, the rate of
return is less demanding than that generally required by the private
sector. This is because social externalities beyond project economics
are inherent considerations in AARC investment decisions. Investment
preference is given to projects that benefit rural communities, are
environmentally friendly, and open non traditional markets for farm and
forest products. Private venture capital firms do not make allowances
for such considerations. Nevertheless, when AARC assumes an equity
position within a company, it does so in the same manner as any private
investor would. In some situations AARC has taken common stock, in
others AARC has taken its own class of preferred stock. At times, when
it has made sense to the structure of an investment, AARC has taken
warrants against the future purchase of stock. In all cases, the Board
of Directors negotiates an exit strategy. Ideally, AARC would cash out
its equity position when a company either went public, or was acquired.
If neither happens, AARC always has a negotiated put option, whereby
the company agrees to repurchase the stock by a pre-determined future
date. The repurchase price is typically calculated on the basis of a
formula tied to a multiple of the company's net sales for a period of
time prior to the repurchase.
Question. Is there a maximum length of time AARC can hold equity
positions?
Answer. There is no set period of time for which AARC can remain an
equity investor in a company. However, absent an Initial Public
Offering (IPO) or acquisition, the repurchase strategy described above
is usually set to occur within six to eight years from the date of the
investment.
Question. Does AARC intend to be self-sustaining at some point?
Answer. Under the provisions of the 1996 Farm Bill, AARC has
prepared a business plan that shows a self-sustaining fund by the end
of 2002.
______
Questions Submitted by Senator Harkin
rural business-cooperative service
business and industry programs
Question. Clearly, one of the biggest problems facing economic
development in rural areas is capital. AARCC is crucial to providing
venture capital for new nonfood products. But, we also need capital for
a variety of economic ventures. And, for new mid sized companies, the
B&I program is the only effective substantial USDA business capital
assistance program that is available. Fortunately, it has proven to be
both efficient and effective. Unfortunately, it is under funded. For
this year, $1 of BA provides for about $93 in loan guarantees. We have
had a reawakening of the B&I program over the past four years. Demand
has been steadily rising since fiscal year 1994 and with the new
provisions now in place, demand has been further increasing. Do you
believe the B&I loan guarantee program has been crucial to generating
job creating businesses in Rural America?
Answer. Yes, so far this fiscal year, the loan guarantees made
under the B&I program have created 4,710 jobs and saved 7,873 jobs. For
the past two years, 17,787 jobs were created and 23,276 were saved. In
1995, 8,076 jobs were created and 14,300 jobs saved. In 1996, 9,711
jobs were created and 18,976 saved.
Question. What is the current level of new loan requests that have
been coming in to state offices over the past several months?
Answer. At the beginning of fiscal year 1997, there were 217 B&I
applications and preapplications on hand totaling $348,200,333 with an
allocation of $680 million. Currently, there are 455 B&I applications
and preapplications on hand totaling $779,540,930 with only
$247,245,145 of the funds, allocated through the Rural Business-
Cooperative Assistance Program, not obligated.
Question. If there is not a request to have processing slow down or
acquisition of new funds, when will the program run out of funds?
Answer. There are requests for funds from the National Office
reserve currently on hand totaling $33.23 million, which cannot be met
because the reserve is out of money. Nine States have already exhausted
their allocation and, out of the remaining State Offices, only 4 States
have enough funds remaining in their allocation to cover the
applications and preapplications that have been filed. Unobligated B&I
guaranteed funds are scheduled to be pooled on July 11. If processing
continues at its current pace and additional funds are not made
available, we estimate that we will have exhausted funds by mid-August.
Question. What options do you now see for shifting funds into this
important program?
Answer. The program is funded under the Rural Business Cooperative
Assistance Program (RBCAP) along with the Business and Industry Direct
Loan, Rural Business Opportunity Grant, Rural Cooperative Development
Grant, and Rural Business Enterprise Grant Programs. We are currently
evaluating options to administratively transfer RBCAP budget authority
set-asides for these programs to the B&I Guaranteed Loan Program.
Question. If the program was allowed to continue with normal
approval timing of loan guarantees with a supplemental appropriation,
what would be your estimate of the size of the loan guarantee program
in fiscal year 1997?
Answer. If the demand for the Business and Industry Guaranteed Loan
Program continues in a linear progression from the October 1, 1996,
level of $348,200,000 through the current level of $779,540,930 as of
April 22, 1997, it is estimated that the total demand for the program
for fiscal year 1997 will be nearly $1.6 billion. This estimate is
based on the average daily increase in loan activity of $2.1 million
for the remaining 161 days in fiscal year 1997 minus the appropriated
funds not obligated.
Question. What do you think the likely demand for the program would
be in fiscal year 1998, if it were not restricted by budget
limitations?
Answer. Following the same assumptions used in the previous answer
of an average daily increase in loan activity of $2.1 million plus the
existing demand of $779,540,930, we estimate the size of the program
would be $1.5 billion in fiscal year 1998 if unrestricted by budget
limitations.
Question. For maintaining the integrity of the B&I loan portfolio,
what kind of exceptions to authority, waivers, are there to standard
policy? What kind of assistance to state directors is being provided to
maximize the quality of the portfolio?
Answer. The Administrator has been delegated the authority, on
individual cases, to grant an exception to any requirement or provision
of regulations, which is not inconsistent with applicable statutes,
where the application of the requirement or provision of the regulation
would adversely affect USDA interests. Exception have been granted on
individual projects where USDA's minority business outreach initiative
would have been adversely impacted if the exceptions were not granted.
Training assistance has been provided and is available to Rural
Development State personnel to maximize the quality of the portfolio.
In addition, training material is being developed to assist State
personnel in training certified or non-bank lenders that are new to the
program. A ``jump team'' of qualified, experienced, field personnel has
been identified to provide assistance to State Directors on processing
and servicing situations as needed. We perform annual business programs
assessment reviews on state office activities regarding the business
programs including servicing and portfolio management. Also, RBS is
developing loan portfolio improvement to management procedure for
implementation. This will coordinate early warning systems into the
existing activity performed by our Lenders, State Offices and National
Office on servicing our portfolio. Currently our management and
maintenance of our portfolio by the National Office Staff have allowed
us to reduce our loan delinquency to 7.5 percent of the outstanding
loan portfolio of $1.5 billion.
cooperatives
Question. What do you see as the biggest obstacle facing people out
in the countryside who want to develop cooperatives?
Answer. Two major barriers that people face are organizational
ability and the need for start-up financing. Understanding what a
cooperative business is and how to approach the organization of
cooperatives are obstacles that can be addressed through various types
of educational and technical assistance. Often the most valuable
assistance is helping people understand their roles as members
(potential members) in organizing and operating the cooperative.
The other barrier, financing, relates to the development process
and business start-up. Lack of readily accessible funds to carry out
phases (a business plan, make financial projections, and legal
structure) of the development process are often major obstacles to
start-up groups. This is particularly true of many low resource groups
who are exploring cooperative business structure.
Question. What is the biggest obstacle USDA faces as it attempts to
promote cooperative development in the field?
Answer. The biggest obstacle USDA face is the insufficient number
of highly qualified and experienced staff with the responsibility of
providing cooperative development assistance and programs at the
National and State Offices. Cooperative development requires advanced
skills in cooperative structure, finance, business planning,
facilitation and small group process, and leadership development. There
is limited availability of such expertise in USDA today. Development of
a skilled staff to do cooperative development work will require
training (both formal and on-the-job) and a commitment to recognize
cooperative development as a primary (not secondary) job function. It
must also be recognized that to develop this expertise will take time,
perhaps 3-5 years.
Also, we must begin to measure the outcome of our cooperative
development work in providing technical assistance. For many State
staffs, performance is based upon number and amount of loans and grants
processed, jobs created, delinquency rates, etc. Cooperative
development (technical) assistance is measured by different criteria in
meeting felt needs by farmers and other rural residents. Recognized and
accepted measures are being implemented in the field to encourage staff
to promote cooperative development
Question. Given the experiences in promoting considerable economic
development through the creation of cooperatives by federally-sponsored
programs that fostered rural electric cooperatives, telephone
cooperatives, the farm credit cooperative lending system, etc., how
might we undertake a similar approach to promoting cooperatives as an
economic development tool today?
Answer. The concept of using programs similar to that used in
sponsoring electric and telephone cooperatives is excellent. The
cooperative approach is far from exhausted as a developmental tool for
strengthening rural America. The potential use of cooperatives for
fulfilling a wide variety of economic and social needs in rural America
is significant. To accomplish this, several coordinated steps are
needed. First, the Department must be given the authority to provide
technical and other assistance to all types of rural cooperatives, in
addition to its present authority to work with agricultural
cooperatives. Secondly, development of an extensive educational program
about the cooperative method of conducting business is an essential
ingredient to successful program delivery. In addition, like the
electric and telephone cooperative success stories, groups forming
cooperatives of all types must have adequate equity capital and access
to sources of debt capital. A coordinated strategy of promotion,
technical assistance, and funding can build a rural cooperative system
that will make a real development impact on our most needful rural
areas.
Question. Cooperatives, both existing cooperatives and new, start-
up cooperatives, may cross State lines. Does this create problems in
generating State matching funds?
Answer. While some cooperatives have members located in more than
one State (a few even have Canadian memberships), a cooperative's
headquarters address is always in a single State. Therefore, from the
perspective of programs offered by Cooperative Services and our State
Cooperative Development Specialists, multi-state cooperative membership
does not create a State matching funds problem. We recognize that many
cooperatives to be effective must be regional in nature such as efforts
to organize livestock producers in the Northern Plains States. This
requires more flexibility and ability to adapt and coordinate
activities by State Offices.
Question. What can USDA do to take the cooperative model to other
government agencies and make it part of their development outreach
programs? Would it be logical to provide set-asides for certain other
agencies, requiring them to commit a specific minimum of their
development dollars to cooperative development?
Answer. USDA can partner with other agencies at the Federal, State,
and local level to insure that information on the cooperative form of
business is being fully disseminated to all those who might benefit
from its use. Such partnering could be encouraged by the Congress as it
authorizes funding for all development programs. We encourage a
strategy which recognizes USDA's present lead agency status with
respect to cooperative development activities and builds upon it
through increased funding and broader authorities. Other Department's
cooperative developmental programs are encouraged to work with USDA to
insure the provision of strong programs.
While earmarking certain portions of funds for cooperatives will be
beneficial, we also encourage an approach that focuses on reducing
regulatory barriers to program access so that cooperatives can compete
for program funds on an equal footing with other forms of enterprise.
Question. USDA has developed a number of public/private
partnerships in rural America? What have been your most successful,
creative efforts to date and to what extent can these success stories
be made widely used models across the country?
Answer. We feel we have great success over the years in working
with the land grant university system in carrying out programs of
research, education, and technical assistance that serves the needs of
local residents. Through cooperative agreements, we have been able to
leverage financial resources and expertise in a manner that has been of
real benefit to the rural community. We have maintained active
partnerships with cooperative centers organized as non-profit private
sector organizations in providing a range of cooperative education
activities and programs. Through extensive joint planning, program
development, and sponsorship, we have been able to make significant
contribution to a greater public understanding of cooperatives through
such diverse programs as the Cooperative Development Forum, the
National Institute on Cooperative Education, the Graduate Institute of
Cooperative Leadership, and a range of other programs.
Question. I believe that RDA should be able to provide assistance
to cooperatives without regard to specific agricultural linkages in the
same ways RDA can assist other forms of business enterprises. I
understand USDA is considering such an expansion in authority. What is
the status of those plans? If so, what plans are there to ensure that
additional personnel and other resources are allocated to take on the
work load?
Answer. Yes, we are seeking legislation which would expand the
authority of Cooperative Services to provide the same type of advice
and assistance to non-agricultural rural cooperatives as they are
currently doing for agricultural cooperatives. These include applied
research, technical assistance to existing cooperatives, assistance to
newly developing cooperatives, education and training, and statistical
services. The legislative package for this expanded approval has
cleared the Department and is awaiting approval at OMB.
We are examining ways of ensuring that additional personnel and
other resources are available to handle this additional work. Since so
many of the missions carried out by Cooperative Services are human-
intensive, we recognize that additional personnel will be needed such
that current services to agricultural cooperatives do not deteriorate.
Question. A major obstacle to cooperative development is finding
pre-development funds to get a project started. What suggestions do you
have for how USDA can help provide pre-development funds? Have you
considered generating a revolving loan fund for that purpose?
Answer. First, we want to point out that it is our belief that
strong cooperatives are more likely to be developed if the potential
members see the need for the cooperative rather than for a
``developer'' to try to ``sell'' the idea. Through State and National
Offices, where RBS can best assist is providing technical advisory
assistance at no cost to a developing group, after the economic need is
determined and thereby reducing the need for pre-development funding
for projects that are top-down advocacy rather than bottom-up member
driven. This technical assistance is often in the form of providing a
feasibility study for which groups otherwise seek outside funding.
Further, strong cooperatives usually require financial commitments from
their members, thus the need for pre-development funding is often at
the member or producer level. With this in mind, the FAIR Act
authorized the use of Business and Industry loan funds to be used for
producers to purchase stock in start-up cooperatives. Additionally, the
Rural Cooperative Development Grant Program, operated by RBS, helps
fund Cooperative Development Centers who in turn help do some of the
pre-development activities. Further, the revolving fund program
operated in conjunction with Rural Utilities Service's borrowers is
used as a source of funding some pre-development activities. We are
receptive to consideration of a revolving loan program for cooperative
development purposes, although such a program would be competing with
others for scarce budget resources.
intermediary relending program
Question. The IRP program is allocated on a project by project
basis through a national pool. Has the Department considered allocating
a portion of those funds to the states under an administrative formula?
If not, why not?
Answer. There has been considerable internal Agency discussion
about changing to a system of allocating IRP funds to the Rural
Development State Offices by administrative formula, rather than
through a national competition. There is a significant amount of staff
support for such a change. However, there are also several reasons why
such action has not yet been taken.
The current program regulations require applications to be ranked
on a national basis and funded in order of priority ranking. Therefore,
it would be necessary to go through the rulemaking process, with
opportunity for public comment, before a change could be implemented.
The issue was not considered prior to publishing a proposed rule for
new IRP regulations in the Federal Register in January 1995 and was not
the subject of public comment on that proposed rule. The Agency is
still working on that rulemaking action and wants to publish a final
rule to implement that action before developing a new proposed rule for
additional program changes.
The existing requirement for a national ranking was put into the
program regulations in 1990 at the insistence of the Office of
Management and Budget (OMB). OMB thought a national ranking was the
fairest way to distribute the small amount of funds expected to be
available for IRP. How current OMB staff would react to a proposal to
remove that requirement is not known.
Recent appropriation levels are still small enough that formula
allocation to State Offices would cause fundamental changes in the
program. For example, if the fiscal year 1997 appropriation amount of
$37,155,765 was allocated according to the formula used by the Agency
for other business programs, very few State Offices would receive an
allocation as large as $1 million, which has been the approximate
average amount of one IRP loan. The average size of IRP loans would be
reduced dramatically. The amount available to some State Offices would
not be sufficient to provide adequate funding to justify the creation
and administration of a revolving fund by an intermediary.
rural housing service
Question. The Rural Housing Service budget for personnel is being
slashed with the hope that significant savings can be realized from the
DLOS single family servicing. While there are many demands on the
federal budget, the severe reduction in personnel in RHS could
jeopardize the government's multi-billion dollar investment in multi-
and single-family housing. Even if additional funding is not possible,
the Agency needs to maintain its skilled and knowledgeable personnel in
the complex multi-family program. To what extent is the USDA
considering this important question as it develops possible further
USDA Reductions-In-Force.
Answer. Senator Harkin, when we made the decision to implement the
Dedicated Loan Origination and Servicing System (DLOS), one of the
primary objectives was to mitigate reductions in our staffing levels.
As you may be aware, had the servicing of these loans been shifted to
the private sector, as was strongly suggested by some, the loss of
staff would have been in the neighborhood of 2,700. Implementing the
system internally enabled us to hold the staff reduction to only 600
and provided the opportunity to transfer 900 other positions, no longer
needed for servicing single family housing loans to other functions
that were critically understaffed, one of which was multi-family
housing. The majority of the positions transferred went to this program
and this was a result of decisions reached jointly with the program
staffs in Washington and the State Directors.
Regarding the second part of your questions and future reductions-
in-force, it is my policy that a reduction in positions involved in the
delivery and servicing of our programs will be considered only after
all other options are exhausted. As you know, we are in the process of
a reduction-in-force presently for those positions that are to be
eliminated with the implementation of DLOS. The scope of this
particular reduction-in-force was held to a minimum with the help of
the Appropriations Committee's enactment of voluntary separation
authority beginning in fiscal year 1997. We limited participation in
the voluntary separation to those states that would need to conduct a
reduction-in-force associated with DLOS.
Question. The single family direct loan program must be preserved
at an appropriate level without the vast difference in loan volume
experienced from year-to-year due to changing subsidy rates caused by
variations in interest rates. This is particularly important regarding
this program where Realtors and banks need to acquire long term
relationships in order for the program to smoothly function over the
long term. Will the USDA provide the Committee with their best
judgments of the likely program to budget authority rate for fiscal
1998 prior to the subcommittee's markup and conference this year?
Answer. We would be most happy to keep the subcommittee informed of
the changes in the subsidy rate.
______
Questions Submitted by Senator Byrd
rural utilities service
water and waste loans
Question. The proposed budget for the water and waste disposal
accounts remains approximately at the fiscal year 1997 level. With the
1995 Water 2000 report identifying the need for some $10 billion in
water and waste disposal projects, why has there been no increase in
funding for the water and waste disposal program?
Answer. There is great need in rural America for decent, safe
drinking water, as reflected in the Water 2000 needs assessment. There
continues to be a heavy demand for water and waste disposal funds.
Currently the RUS has on hand $2.72 billion in loan applications and
$1.27 billion in grant applications. The requested fiscal year 1998
water and waste disposal funding levels take into consideration all the
rural development needs in rural America. The requested funding level,
combined with funds from State, other Federal, and private sources will
help achieve measurable progress in meeting the water and waste needs
of rural people. The base amount of funding for water and waste grants
and loans has remained stable. However, since these programs are
included in the Rural Community Advancement Program (RCAP) there is
funding flexibility between the water and waste grant and loan
programs. Also up to 25 percent within a State's allocation can be
transferred between program areas within RCAP (water and waste,
community facilities, and business and industry). Further, the matching
and mandatory grants to States must be used for RCAP program purposes,
so the water and waste program level will very likely be enhanced above
the amount currently projected if States have a priority need for water
and waste grants and loans.
Question. Under your proposed budget, when will the goals of Water
2000--to provide reliable, clean water for rural Americans--finally be
reached in the nation? And West Virginia?
Answer. The RUS has not established a specific time frame for
achieving the goals of Water 2000 in the nation or West Virginia. This
will be an on going initiative that targets resources from the rural
water and waste disposal loan and grant program to all communities with
the most serious needs, as soon as possible within overall budgetary
constraints.
Question. If additional funding were provided for Rural Development
programs, would you agree with me that priority should be given to the
water and waste disposal accounts?
Answer. Certainly providing a water supply or waste disposal system
to eliminate some acute health or environmental problems is a very
important first step for many communities. However, attempting to set
priorities among various services when much of the population that we
serve has been without water supply or waste disposal, housing, health
care, or employment for decades is very difficult. We think priorities
should be set by the communities and the people they serve, and we are
now attempting to work with communities and their residents in
developing plans to determine their priorities rather than simply
process loan and grant applications. Implementing the Rural Community
Advancement Program goes to the heart of that effort. The communities
with whom we have worked have found the process to be very helpful and
responded very favorably to this process.
Question. In your prepared statement, you observe that this budget
reflects the President's belief that jobs create opportunity and long-
term community stability. How do you expect to achieve these economic
goals without providing adequate funding for essential water and waste
disposal systems?
Answer. Given the budget constraints that all of us are forced to
work within, we think we have submitted a very responsible budget,
particularly with regard to water and waste disposal grants and loans.
This funding level along with the total program level for all Rural
Development, will be adequate to achieve job opportunities and
community stability for Rural America.
rural community advancement program
Question. Your budget calls for funding for the RCAP, a new funding
initiative. Given the current shortfalls in funding available to meet
needs already identified within the community facilities, water and
waste disposal, and business assistance accounts, why pull funds from
these critical programs to establish a new funding mechanism?
Answer. Senator Byrd, the 1996 Farm Bill authorized the Rural
Community Advancement program (RCAP) as a means of providing
flexibility in the administration of the programs you referenced. This
flexibility is badly needed by our State Directors as they attempt to
stretch shrinking Federal resources further to meet growing demand for
these programs and to target their funds appropriately.
Question. What is the cost associated with establishing RCAP?
Answer. There is no cost associated with implementing RCAP. RCAP
only changes how we administer our programs.
______
Questions Submitted by Senator Leahy
rural business-cooperative service
business and industry loans
Question. On March 7, the Vermont Rural Development office received
a letter from Rural Business Cooperative Service Administrator, Dayton
Watkins announcing that 50 percent of all unobligated Business and
Industry Loan Guarantee program funds should be returned immediately to
the national office for re-pooling. This unwarned early re-pooling cost
Vermont $600,000 and New Hampshire $2 million. The letter claimed this
was necessary to address a backlog of projects. Early re-pooling causes
significant problems for Vermont. First, the State's strategic plan
targets new construction in rural areas which requires time consuming
project development. Second, because of the short construction season,
businesses often do not approach Rural Development for funding until
close to the beginning of the building season in March or April. The
Department normally ``re-pools'' funds in July. Why did Administrator
Watkins make the decision to change the rules on the states in
midstream? Can I have your assurance that states will not be subjected
to this kind of unexpected and unplanned for program change in the
future? What procedures does USDA currently have in place to ensure
that field offices are not taken off guard by sudden changes in program
funding or operation?
My concerns about moving up re-pooling dates is not limited to the
B&I program. The factors which contribute in Vermont to the need for
availability of program funding through the Spring are equally
applicable to many other Rural Development programs. I would repeat my
first question with regard to the steps that the office has in place to
protect state funds from unexpected early re-pooling for all Rural
Development programs.
Answer. The pooling of the Business and Industry (B&I) Guaranteed
Loan Program authority has normally been executed in two stages, the
first occurring in April and the second in August each year. In an
effort to give State Directors more flexibility in managing their
program resources, the Administrator decided to have only one pooling
in fiscal year 1997, which was to occur July 11, 1997. However, because
of the tremendous demand for the B&I program nationally, it became
necessary to implement an early pooling to accommodate those demands.
By the end of February 1997, many States had used their entire
allocation and needed additional guarantee authority in order to keep
their B&I program open and to enable them to maintain new relationships
with business communities and lenders. Other States have not used or
had application activity in amounts that would use their allocation. In
addition, the National Office Reserve was completely exhausted of
funds, yet, there was a backlog in demand from States for the reserve
resources. Out of several options presented to the Administrator to
handle this program, the Administrator chose to pool fifty (50 percent)
percent of the balance resulting from subtracting the preapplications/
applications on hand from the unobligated B&I allocation for each
State.
At the time of pooling, Vermont and New Hampshire had a total of
$2,698,000 and $4,074,000, respectively, in unobligated B&I authority,
with only $1.5 million of preapplications/applications on hand in
Vermont. New Hampshire had no preapplications/applications. The amount
pooled for Vermont and New Hampshire, respectively, was $599,000 and
$2,037,000. This left a total of $2,099,000 and $2,037,000 for the two
States until additional resources could be made available.
According to our latest B&I report, Vermont has obligated $520,000
of its fiscal year 1997 allocation, and New Hampshire has not obligated
any funds. While Vermont and New Hampshire have approximately $5
million and $4 million in preapplications, we hope to have authority to
cover these demands after the July 11, 1997, pooling.
With regard to the issue of advance notification to State Directors
regarding the B&I program status, in the future we will notify our
State Directors through their Executive Committee of the
Administrator's plans. In this instance, the Administrator did not have
the time to give advance notice to States of this action.
Also, please note, that procedures for the field office funding
allocations are administrative in nature, which offers the
Administrator flexibility in administering programs in the Rural
Business-Cooperative Service agency. The authority used is executed in
a prudent, rational, and logical manner always considering the
potential impact on all rural America and the States responsible for
making programs available to them. It has been our experience in the
past that some States do not use all of their B&I allocations, while
others may use much more. If the Administrator did not have flexibility
in managing the RBS programs, it's probable that we would not utilize
all of our B&I authority nationwide.
rural development
field restructuring
Question. The Department has made significant progress in meeting
staff reduction goals as required by the USDA Reorganization bill that
Senator Lugar and I authored in 1994. In fact the Rural Development
Office in particular has exceeded those goals--in Vermont by 20
percent--with the implementation of centralized loan servicing. I
commend you for your commitment to increasing the efficiency of USDA
offices--that was also the driving goal behind my Reorganization bill
three years ago. However, I want to be sure that additional staff
reductions do not come at the expense of customer service. The Vermont
Rural Development office in particular is undergoing major changes to
maximize efficiency with significantly reduced staff. Where once seven
offices served Vermonters, by the end of the year only one central
office will remain. What steps is the Department taking to encourage
feed-back from field offices on the restructuring? How are you
monitoring any changes in office performance or program participation
to make sure that the level of customer service is being maintained?
Answer. We appreciate and share your concern that the quality of
service received by our customers should not be reduced as a result of
reduced staffing levels. While our current staffing levels will not
allow us to maintain the number of offices we have had in the past, we
are providing our field staff with training to assist them in
responding to the transition and to customer service changes that may
be required. This training is designed to: 1) help our field employees
cope with the changes brought about by the reorganization and 2)
provide them with the skills required to satisfy our customers' needs
from the downsized structure. This training is being provided at the
local USDA Service Center level and includes employees from the Farm
Service Agency (FSA) and the National Resources and Conservation
Service (NRCS), as well as Rural Development employees. As part of this
training session, feedback is solicited from field office employees on
issues related to the downsizing and barriers to providing good
customer service are identified. This information will be helpful in
determining what changes are needed in processes or organization to
ensure quality customer service is provided. We will also be monitoring
quality of service performance by obtaining periodic feedback directly
from customers through mail or telephone surveys or through focus
groups.
rural housing service
dedicated loan origination service system (dloss)
Question. The 1996 Farm bill eliminated much of the administrative
work required by many Farm Service Agency programs. The changes should
mean that far fewer employees will be needed at FSA to run these
programs. Are you working with other Department offices like FSA to
make sure that staffing needs are addressed Department-wide and not on
an agency by agency basis?
Answer. Rural Development is working with both FSA and NRCS to
ensure that, wherever possible, administrative activities are shared.
Joint task forces are looking at short and long term procedures that
can improve the support necessary to deliver our programs. We hope that
in the long run this will result in economies of scale in staffing
needs devoted to non-program activities in the field. We also hope that
this effort will result in some standardization of these policies among
the three agencies that will reduce confusion from inconsistencies for
both our employees and our customers.
Question. I understand that the Department expects the centralized
loan servicing system to be fully operational by the Fall of 1997. Have
you experienced any problems so far in the transition to the
centralized system? Has the office noticed any changes in program
participation, the time required to process loans, program costs, or
delinquency rates to date? What steps are you being taken to ensure
that changes like this will be tracked and addressed?
Answer. The Department does expect to be fully operational by
October 1, 1997. The development of the Centralized Servicing Center
and conversion of the Rural Housing Service Single Family Housing
portfolio from the old system to the new centralized environment
continues to progress on time and on budget. Any project as large and
aggressive as the reinvention of an $18 billion, 700,000 plus loan
portfolio would experience some problems. Nothing, however, has arisen
to date that would throw the conversion off track or off schedule.
As of April 15, 1997, the Agency is on track for full utilization
of loan funds and in fact there continues to be a shortage of funds
needed to finance all pending applications.
The new UniFi loan origination system has been well received in the
field. UniFi is a state-of-the-art windows-based program which
automates much of what was a manual process. Therefore, the time
required to process loans is reducing and will continue to improve as
the field becomes more experienced on the new system.
The conversion process will continue through September of 1997.
Therefore, it is too soon to make any definitive judgments as to
impacts on program costs or delinquency rates.
The new commercial-off-the-shelf system that the Agency purchased
from Fiserv Mortgage Systems, which has been enhanced to accommodate
the unique nature of the Rural Housing Service Single Family loan
program, will be able to track the status of the portfolio in a much
more comprehensive manner then ever before in the history of the
program. We will be able to more accurately monitor every area of the
program including costs and delinquencies. The DLOS system will give us
much improved checking and management information data, for example:
We will be able to monitor first-year delinquencies by county which
allows the Agency to better evaluate underwriting practices, and
respond to delinquencies much faster, thereby, improving the
probability of the borrower to become a successful homeowner and reduce
cost to the taxpayer.
rural development
Question. In 1995 the National Science Foundation completed a study
on measuring poverty. The report concluded that the way the government
measures poverty today is inaccurate and that shelter costs among other
things should be factored into the measure. The findings of a recent
report by the Peace & Justice Center in Vermont supports the argument
that poverty in Vermont is underestimated. Other states have conducted
similar surveys, with largely similar results. Many USDA programs
including those run by Rural Development base state program funding on
the poverty measure. The Office on Management and Budget has recently
formed an inter-agency task force to decide if changes to the poverty
measure are needed. Is Rural Development participating in that task
force? Would you consider alternatives to the current poverty measure
to determine funding needs?
Answer. We would certainly be willing to consider alternative
measures of poverty. Rural Development has not been asked to
participate in the inter-agency task force on poverty. The Office of
Management and Budget advises that they have formed a steering
committee. We will ask to be added to the committee.
Question. I was disappointed that Rural Development chose to use
its portion of the fiscal year 1997 Fund for Rural America for program
backlogs. While some supplemental funding was legitimately needed, in
the housing program in particular, I feel that this opportunity to do
something innovative was largely missed. Will the office be looking for
more creative uses of the Fund for Rural America in fiscal year 1998?
Will you work with Congress in determining an appropriate use for the
Fund? Will Rural Development provide adequate time between the
announcement of how the Fund will be used and the distribution of that
funding to allow states with projects under development to submit
applications for consideration?
Answer. Senator Leahy, as you are aware, the provisions of the Fund
for Rural America require that the rural development portion of the
Fund be used through existing programs which means that existing
statutes and regulations apply. This limits our ability to use the
funds for innovative purposes. However, as I am sure you will agree,
the distance learning/telemedicine grant program is one of the most
innovative and effective uses of funds. It combines the advancement of
technology with the need to provide higher quality education in rural
areas that will allow rural students the opportunity to be competitive
in an economy increasingly dependent on technology.
It is difficult to weigh the need for innovation against providing
basic services that residents of rural areas have been without, such as
safe drinking water in their homes and adequate housing. However, we
would be happy to consider any suggestions you have in using the funds
in more innovative ways. As you are aware many members of Congress
urged the Department to address the substantial backlogs of
applications in many of our programs and we attempted to balance the
two demands, along with addressing the funding shortfall in the single
family housing program.
rural business-cooperative service
intermediary re-lending program
Question. The Department has been working on changes to the
Intermediary Re-lending program for two years. These changes are needed
to eliminate the $2 million cap for successful lending organization,
and to streamline the operation of the program. What is the status of
the IRP proposed rules? What steps remain before the final rule will be
ready? When does the office expect the final rule to be approved?
Answer. The Final Rule for the Intermediary Relending Program has
recently cleared the USDA Office of the General Council. It is in the
final steps of the process of being cleared through the Department.
The Final Rule will then be forwarded to the Office of Management
and Budget (OMB) for review and clearance. OMB has up to 60 days to
review and clear the regulation.
Upon OMB clearance, the Final Rule will be published and effective.
rural development
rural community advancement program
Question. I understand that Rural Development's fiscal year 1998
budget request incorporates the RCAP authorized in the 1996 Farm Bill.
Specifically how will funding be divided among the RCAP programs, and
what steps has the Department taken to ensure that transfers between
RCAP programs will be documented and tracked? Has the Department
noticed any change in the way states operate programs in the RCAP or
spend money from those programs?
Answer. The budget documents provide a table of the programs and
requested funding levels for the RCAP. The Rural Development Mission
Area has developed a simple software package to track transfers. This
software will be made available to State Directors and Agency
Administrators so they can discuss suggested transfers and both parties
will be able to examine the effects of the transfers simultaneously. If
a transfer is agreed to, the State Director will transmit a formal
request to the appropriate Administrators for concurrence and the
transfer then can be executed. The software will summarize transfers by
program and by state in order to ensure the 10 percent national cap on
transfers is adhered to. In fiscal year 1996, 44 transfers were made in
the Rural Utilities Assistance program, 34 of the transfers involved
shifting budget authority from grants to loans, thereby increasing the
number of loans that were made. One state shifted all of the grant
funds to loans because there was not a current demand for grant funds.
The remaining transfers shifted small amounts of budget authority from
the loan program to the grant program primarily to complete financing
for specific projects. In every instance, the funds were used wisely
and effectively and the State Directors are to be commended for their
decisions.
Question. The Federal Agriculture and Improvement and Reform Act
authorized a rural capital demonstration program as a way to get more
private sector investment into rural business enterprises. Both the
Senate report and the conference report on the fiscal year 1997
Agriculture Appropriations Act provided for funding of this
demonstration out of the Business and Industrial loan program. Instead,
USDA has just issued an `Advanced Notice of Proposed Rulemaking'. This
appears to me to be little more than a delaying tactic. What is the
reason for the delay in going forward with this program? Is there a
need for corrective legislation? How can we expedite the implementation
of this important program?
Answer. Senator Leahy, the fiscal year 1997 Agriculture
Appropriations Act blocked implementation of the venture capital
demonstration that you have referred to. The Advance Notice of Proposed
Rulemaking to which you refer is not a delaying tactic, in fact, it is
quite the opposite. The staff of the Rural Business-Cooperative Service
that will administer the program has no experience with venture capital
funds and with the notice is soliciting ideas from interested parties
about how best to administer such a program. As you are aware, venture
capital is very risky and we want to be certain we take every step
possible to protect the public's interest.
Subcommittee Recess
Senator Cochran. Thank you all very much for your
cooperation with the subcommittee and your attendance at this
hearing.
Our next hearing will be on Tuesday, April 22, at 10 a.m.,
in room 138 of the Dirksen Senate Office Building. At that
time, we will review the budget request for the Department's
research, education, and economics programs. Until then, the
subcommittee stands in recess.
[Whereupon, at 11:30 a.m., Tuesday, April 15, the
subcommittee was recessed, to reconvene at 10:10 a.m., Tuesday,
April 22.]
AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR
FISCAL YEAR 1998
----------
TUESDAY, APRIL 22, 1997
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:10 a.m., in room SD-138, Dirksen
Senate Office Building, Hon. Thad Cochran (chairman) presiding.
Present: Senators Cochran, Gorton, Burns, and Bumpers.
DEPARTMENT OF AGRICULTURE
STATEMENT OF DR. CATHERINE E. WOTEKI, ACTING UNDER
SECRETARY, RESEARCH, EDUCATION, AND
ECONOMICS
ACCOMPANIED BY:
DR. FLOYD P. HORN, ACTING DEPUTY UNDER SECRETARY, RESEARCH,
EDUCATION, AND ECONOMICS
DENNIS KAPLAN, DEPUTY DIRECTOR, OFFICE OF BUDGET AND PROGRAM
ANALYSIS
Agricultural Research Service
STATEMENT OF DR. EDWARD KNIPLING, ACTING ADMINISTRATOR
Cooperative State Research, Education, and Extension Service
STATEMENT OF DR. B.H. ROBINSON, ADMINISTRATOR
Economic Research Service
STATEMENT OF KELLEY WHITE, ASSOCIATE ADMINISTRATOR
National Agricultural Statistics Service
STATEMENT OF DONALD BAY, ADMINISTRATOR
Opening Remarks
Senator Cochran. The subcommittee will please come to
order. We welcome all of you today to our hearing reviewing the
President's budget request for the Department of Agriculture,
specifically in the area of agriculture research, education,
and economics. This includes the Agricultural Research
Service's budget; the budget of the Cooperative State Research,
Education, and Extension Service; the Economic Research
Service; and the National Agricultural Statistics Service.
Our witnesses this morning are Dr. Catherine Woteki, who is
Acting Under Secretary for Research, Education, and Economics;
Dr. Floyd Horn, Acting Deputy Under Secretary for Research,
Education, and Economics; Dr. Edward Knipling, Acting
Administrator for the Agricultural Research Service. I am not
sure about the titles of the rest of the witnesses. They
probably are all Ph.D's in something, but also here with us are
Dr. Bob Robinson, Administrator, Cooperative State Research,
Education, and Extension Service; Kelley White, Associate
Administrator for the Economic Research Service; Donald Bay,
Administrator for the National Agricultural Statistics Service;
and Dennis Kaplan, with the Office of Budget and Program
Analysis of the Department of Agriculture.
We appreciate very much your attendance at the hearing and
your cooperation with our subcommittee. We have your written
testimony which we will put in the record in full, and
encourage you to make any summary or additional comments you
desire. Then we will have an opportunity to take questions from
the subcommittee members.
Before calling on you to proceed, I am going to recognize
the distinguished ranking member of the committee, Senator
Bumpers from Arkansas, for any comments that he might have.
Senator Bumpers. Mr. Chairman, I do not have an opening
statement.
Senator Cochran. Senator Burns, do you have any comments?
Senator Burns. Just one. Thank you, Mr. Chairman, for
holding this hearing. It is ironic that just down the hall I am
also involved in a hearing with the Office of Science and
Technology Policy, which is Dr. Jack Gibbons and Dr. Neal Lane
and the National Science Foundation. It is just down the hall.
I made the statement 3 years ago that I was concerned about
the declining dollars in agricultural research, and I am still
concerned about that, and said at that time when I was serving
on the authorizing committee over in Commerce and Science and
Technology that maybe we are going to have to use some of their
resources and funds to really pick up the shortages that were
lacking in agriculture, because I do not think there is any
other part of science and technology that is any more important
to us as a society and as a country than the work that we do in
agricultural research, and also in extension and getting that
information out.
But it is pretty hard to get people excited about
agricultural research when their mouths are full and their
stomachs are full, but we can see the day--and all you have to
do is travel around the world.
Just go around the world and see a system like Russia, that
has fallen apart because of the lack of interest in their
agriculture. In fact, theirs is a society that cannot even feed
themselves and have all kinds of prospects to do so.
So I think it is very, very important, and I am interested
in hearing from our witnesses today, but I appreciate the
attitude and the working relationship, especially with Dr.
Horn, and what we have tried to do in agriculture research. We
still have a long way to go to get it at the levels that we
both would like to see it, because we both, I think, share the
same feeling about the subject.
Thank you very much.
Senator Cochran. Thank you, Senator.
Senator Bumpers. Mr. Chairman, may I make just one
statement?
Senator Cochran. Senator Bumpers.
Senator Bumpers. I think I have made this before to this
committee, but it is so good it is worth repeating. I have been
increasingly concerned about the amount of money we put into
agricultural research. It seems to me that we have got a real
train wreck coming, and that we have yields that are either
static or in 1995 a lower yield per acre on corn for the first
time in modern history.
I think that when it comes to research in agriculture we
should reflect on this. We spend $36 billion a year on trying
to make things explode down at the Defense Department in
research. We spend $13 billion at the National Institutes of
Health, which incidentally should be considerably higher. We
spend $12 billion a year on space, which we have gotten very
little from and in the future we will get even less, and we
spend $1.2 billion a year on agricultural research. Dr. Horn,
is that about right?
Dr. Horn. That is correct.
Dr. Woteki. That is correct.
Senator Bumpers. When you consider the fact that of the 438
million arable acres of land in the United States, and the fact
that we are taking 3 or 4 million acres out a year for
highways, suburban sprawl, shopping centers, you name it, so
what you have is a static production level, yield, you have a
loss of your crop base to urban sprawl, and finally, there will
be about 10 million more people in the United States about 10
to 15 years from now than there are now, when you put all those
together, to call it a train wreck is probably being moderate.
Now, this is not going to happen overnight, but all I am
saying is that since we have the Agricultural Research Service
here this morning I wanted to make that point and say again
there is not anything wrong with Congress or anything wrong
with this country except misspent priorities.
When I consider the fact that we are putting so much in
space and so much in the military, and as I say,
explosionmaking, and yet you have a really macroproblem staring
us in the face, I say our priorities are wrong.
Thank you, Mr. Chairman.
Prepared Statements
Senator Cochran. Thank you, Senator Bumpers. We have
prepared statements from Senator Byrd and Senator Dorgan that
will be made part of the record.
[The statements follow:]
Prepared Statement of Senator Byrd
Chairman Cochran, Senator Bumpers, members of the subcommittee, and
Under Secretary Woteki, I am pleased to be here today to review the
U.S. Department of Agriculture's (USDA) research, education, and
economics programs. The mission of these accounts is three fold:
meeting the challenges of an increasingly competitive global market,
supplying safe, wholesome food produced under environmentally friendly
conditions, and responding to the industrialization of American
agriculture.
Today, I would like to discuss the unique needs of West Virginia's
rural farmers and citizens, and the importance that USDA programs play
in their future. While West Virginia may lack a concentration of farm
activities compared to other states, West Virginia farmers are hard
working family operators who take pride in the quality of their
production and in a self-imposed stewardship of their ancestral lands.
It is my opinion that small and part-time businesses, such as West
Virginia farm operations, represent the backbone of our nation's
economy.
I believe that the USDA must have the foresight and the funding
necessary to help rural, small family farmers, and their communities,
stay in the lead of emerging opportunities, which I believe is
essential to creating and retaining jobs. In this regard, I will give a
quick illustration of an Agricultural Research Service (ARS) project,
which I thank this subcommittee for making possible, that has already
had a valuable economic impact on West Virginia, although the facility
has yet to be constructed. I refer to the National Center for Cool and
Cold Water Aquaculture. All leading sources of data now confirm that
aquaculture production will create hundreds of jobs and generate
millions of dollars in the state, and the development of this industry
is a state government priority. Many reports further suggest that
abandoned mine sites can be used for aquaculture with impressive
economic results. Already, West Virginia boasts forty-plus active
aquaculture producers, with increased activity expected this year. The
new center will be an important link in maximizing this emerging field.
I have several questions regarding the Agricultural Research
Service (ARS) facilities in West Virginia that support the development
of research important for West Virginia farmers.
conclusions
I hope that this subcommittee will join me in supporting ARS
projects, and I look forward to working with the Chairman, ranking
member, and other subcommittee members, in conjunction with the Under
Secretary, in ensuring that the ARS's mission is achieved.
______
Prepared Statement of Senator Dorgan
Mr. Chairman, thank you for the opportunity to submit this
statement. Since I was accompanying President Clinton on his trip to
Grand Forks, North Dakota to view the flood devastation in the Red
River Valley, I was not able to attend the hearing to express my deep
concern on an issue of great importance to the Northern Plains.
At a time when production agriculture is being required to become
more environmentally sensitive and globally competitive, I believe it
would be a giant mistake for the Agricultural Research Service (ARS) to
close its Northern Great Plains Research Center at Mandan, North
Dakota, as is currently proposed within the fiscal year 1998 budget for
the U.S. Department of Agriculture.
The Northern Great Plains is a semi-arid region, with wide climatic
extremes in temperature, wind, and moisture conditions, resulting in
considerable variation in growing seasons. This region has a mixed
agricultural base of grains, livestock, and other crops produced within
a complex, but fragile ecosystem.
The Mandan ARS laboratory is the only ARS facility which has been
conducting comprehensive agricultural production research as it
specifically relates to the ecosystem of the Northern Great Plains.
Since it was established by Congress in 1912, this research facility
has been providing sound agricultural research for the unique needs and
the environmental challenges facing farmers and ranchers in this
region.
The Mandan ARS facility is centrally located in the Northern Great
Plains. Its location is a critical component of the value of its
research and the importance of this facility to this region.
The proposed closing of this station is not a simple matter of
transferring research projects to other ARS locations. Nor is it a
matter of eliminating research projects that duplicate similar research
at other ARS locations. This closing would be the end of ARS research
that is site specific to the Northern Great Plains ecosystem. It would
leave a void for the region's agriculture that simply could not be
effectively filled from other research resources.
The closing of this facility would be a serious blow to the future
capability of agriculture in the Northern Great Plains to be
competitive in the new global marketplace. At the same time the closure
would be devastating to the continued development of environmentally
sensitive and sustainable production systems for this region. I believe
this ARS facility and its research programs are a vital link to the
future economic and environmental health of the Northern Great Plains.
I have reviewed the project evaluation process by which ARS made
its determination to close the Northern Great Plains Research Center. I
believe a fundamental weakness in the subjective point system by which
ARS projects were judged is that this process did not give adequate
importance to research specific to the needs of a regional ecosystem.
Unfortunately, the decision data by which ARS screened its projects
has not been made available to Congress or to the affected ARS
facilities. However, I have been told by USDA officials that the
projects proposed for termination at the Mandan ARS facility were right
at the cutting line. I believe this makes it even more important not to
predetermine the fate of this facility which is critically important to
the future of Northern Great Plains agriculture.
If ARS is allowed to proceed with the closure of the Northern Great
Plains Research Center, this facility would be precluded from
undergoing the strategic planning review process established by Section
884 of the 1996 farm law.
This section requires the Secretary of Agriculture to establish a
Strategic Planning Task Force to review ``all currently operating
agricultural research facilities constructed in whole or in part with
Federal funds,'' as well as proposed future facilities. These
facilities were to be reviewed in the context of the development of a
ten-year strategic plan which reflects ``both national and regional
perspectives for development, modernization, construction,
consolidation, and closure of Federal agricultural research
facilities.''
It is both presumptive and premature to make a decision on the
closure of the ARS Northern Great Plains Research Center at this time.
This facility should have the full opportunity to undergo the review
process established by the 1996 farm law. The law's emphasis on having
both national and regional perspectives considered by the Strategic
Planning Task Force would give the Northern Great Plains Research
Center the consideration that it deserves.
I want to underscore that the Northern Great Plains Research Center
deserves the same consideration and review that will be accorded all
other existing and proposed federally-funded research facilities under
the provisions of the 1996 farm law.
This facility has an excellent history of providing sound
conservation research which has enhanced both the productivity and the
environment of the Northern Great Plains. It has been particularly
responsive to the conservation needs of the region.
The fragile environment of this region with its low rainfall,
shallow soils, and intense winters presents a unique challenge for
effective conservation. Through its research into minimum-till, no-
till, and reduced fallow cropping and conservation systems, the Mandan
ARS facility has already made great contributions to reduced soil
erosion and improved environmental quality.
This nation is making a considerable investment in the revised
Conservation Reserve Program (CRP). This facility's research in grasses
and grassland management has provided the base of information needed
for land going into the CRP. Through its research into crop rotation
and continuous cropping systems, it provides the needed information for
land coming out of the CRP to be farmed within established conservation
standards.
The nation has also embarked on the newly-established Environmental
Quality Incentives Program (EQIP), which replaces and expands the Great
Plains Conservation Program. The ARS facility at Mandan is central to
these programs in the Northern Plains. Without the ongoing grasslands
and grazing research at this location, we will not be able to achieve
the full economic and environmental benefits envisioned by these
programs. This is particularly true if the range management
conservation component of the EQIP program is to be successful.
The Northern Great Plains Research Center has unique land and
physical facilities and has developed particularly strong ties to the
farmers and ranchers who are the beneficiaries of its research
activities. One example of this is Area IV Soil Conservation Districts,
which provide a 400-acre farm to the center for conducting field-scale
research.
While its tree research project was terminated a year ago, this
facility continues to provide a tremendous resource of information and
tree cultivars. It should be also noted that this facility was the
primary research center for reclamation of surfaced-mined land. This
reclamation research has been essential to the region's lignite mining
and energy production industry in establishing and meeting reclamation
requirements.
This facility has a long list of accomplishments to its credit.
Both the facility and its scientists are internationally recognized for
their work. It is not surprising that this ARS facility has received
support from a broad base of farm, environmental, and research
communities. It is particularly noteworthy that organizations such as
The Wildlife Society, Ducks Unlimited, and the Audubon Society have
expressed opposition to the closure of this facility and instead, call
for its expansion.
The long history of contributions that this facility has made to
agriculture and the environment in the Northern Plains region gives
credence to giving this facility a second look and allowing it to
undergo the Strategic Planning Task Force review process.
Therefore I urge the Subcommittee to maintain the existing programs
at the Northern Great Plains Research Center and to defer any decision
on closure of this facility until that process is completed.
Mr. Chairman, I want to thank you again for the opportunity to
outline the importance of this research facility to the Northern
Plains.
Statement of Dr. Woteki
Senator Cochran. Dr. Woteki, you may proceed.
Dr. Woteki. Thank you very much, Mr. Chairman, and members
of the committee. We very much appreciate the opportunity to be
here with you this morning and to present to you the research,
education, and economic fiscal year 1998 budget request.
I might say that both Senator Burns and Senator Bumpers,
your opening comments very much reflect our own concerns both
about the importance of agricultural research for the future of
this country and also our concerns about the level of funding
for agricultural research. But before I begin what is going to
be a very brief overview of our fiscal year 1998 budget
request, I would like to draw your attention to a recent
development that affects our fiscal year 1997 budget.
On April 16 the House Appropriations Subcommittee marked up
the Department's request for supplemental funding, and in the
course of the markup cut $20 million from the Fund for Rural
America as an offset for emergency funding for fiscal year
1997.
Secretary Glickman is drafting a letter to express his
concerns about this reduction, but let me take this opportunity
to emphasize my personal dismay and disappointment that the
Fund for Rural America was identified for this reduction.
Fund for Rural America
The Fund for Rural America was authorized under section 793
of the Federal Agricultural Improvement and Reform Act of 1996,
and it provides $100 million in each of three increments
beginning this year, 1997, for the provision of rural
development programs and also a competitive grants program for
research, education, and extension activities.
In the most extreme case, if this entire offset were to
come out of the competitive grants program, that $20 million
offset will reduce the $46 million the Secretary has designated
for research, education, and extension projects by about 40
percent.
At first glance, Mr. Chairman, it may seem simple to reduce
the Fund for Rural America grants program. After all, the
closing date for applications is next week, April 28, and as a
new program it does not as yet have a very obvious
constituency. However, the enthusiasm for this program has been
unprecedented, and the program has been of particular interest
to the schools of 1890, the tribal colleges, Hispanic-serving
institutions, as well as the land-grant universities.
As of yesterday, Mr. Chairman, 425 applications have been
received for center grants which will award up to $1 million
each year over 4 years, and we have made a rather conservative
estimate of the number of grant applications we expect next
week for the project grants, which would be up to $600,000 for
a project for up to 4 years.
We anticipate that we will get at a minimum 1,100 grant
applications for those project grants, so I am not exaggerating
when I say the Fund for Rural America has been a very popular
program, and that I believe we will have a very diverse pool of
applicants representing the private, as well as nonprofit and
university, sectors.
Congress created the Fund for Rural America at the same
time that it fundamentally reformed the Federal farm programs.
These policy changes are likely to have a substantial and
dramatic impact on production agriculture by shifting price and
income risk management away from Government programs to
individual farmers.
Cuts in the research, education, and extension portion of
the fund are going to substantially impair the goal of this
transitional program that has been designed to advance the
findings of research into very practical applications to
address emerging problems and to develop new opportunities for
the benefit of rural America.
It is our very great hope, Mr. Chairman, that the cuts to
the Fund for Rural America will be restored when your
subcommittee considers the emergency supplemental
appropriations legislation next week.
At this point, I would like to turn to highlight our fiscal
year 1998 budget request for research, education, and
economics. It totals $1.8 billion. It is a decrease of $49
million, or about 2.6 percent from our fiscal year 1997
appropriation.
I believe that this budget request both in the total
funding as well as in the specific initiatives it contains
represents a sound balance between our commitment to research,
education, and extension on the one hand and the
administration's commitment to a balanced budget on the other.
To get on the path to a balanced budget by fiscal year
2002, the four agencies that are represented here, along with
other USDA agencies, have had to make some rather difficult
decisions to reduce or to terminate some important programs in
order to fund what we now consider to be higher priority
programs. However, we have done a careful assessment of our
priorities and we have been able to fund an increase of $11
million, or about 1 percent, in research in this budget
request.
The Agricultural Research Service budget is essentially the
same as this year, $800 million. The request reflects adjusted
priorities leading to an additional $10 million in research and
a commensurate decrease in funds for buildings and facilities.
The budget also provides for redirecting some funding,
permitting the agency to allocate a total of approximately $30
million in funding for high-priority research programs.
The Cooperative State Research, Education, and Extension
Service budget request is $840 million. Funding for formula
programs is held constant at the fiscal year 1997 appropriated
level. The National Research Initiative [NRI], as it is called,
is increased by $36 million. Decreased funding is proposed for
earmarked special grants programs, buildings and facilities
projects, and selected extension programs.
The administration continues to believe that the NRI
competitive grants program provides our most effective
mechanism for eliciting and supporting the most meritorious
science being conducted by university scientists.
The Economic Research Service's request is $54 million.
With an increasingly market-oriented agricultural sector, the
need for economic analysis to understand the implications of
new developments in technology, in policy, and in trade is
critical for both public, as well as the private sector,
decisionmakers. The fiscal year 1998 budget request provides
funds to secure critical data to underpin these very important
analyses.
The National Agricultural Statistic Service request is $120
million, which represents an increase of $20 million, largely
for funding the peak year of the census of agriculture.
Responsibility for the census of agriculture was
transferred from the Department of Commerce to NASS on October
1, 1996, and NASS is conducting the census under the Agency's
broad authority to conduct agricultural surveys. We are seeking
specific authorizing legislation to clarify those authorities,
and I also ask your assistance and support for swift passage of
this legislation.
In addition to the census, which is a very high priority
for us, our budget request focuses on some high-priority
administration initiatives, and these include food safety, with
an increase of $8 million, human nutrition, with an increase of
$12 million, germplasm collection and preservation, $2 million,
integrated pest management, an increase of $15 million,
emerging infectious diseases, an increase of $5 million, and
children, youth, and families at risk, an increase of $2
million.
This last increase will restore funding for this program to
its fiscal year 1995 level, and provides an additional $1.7
million to be targeted to the 1890 institutions that are now
eligible to receive Smith Lever 3(d) funding directly.
I mentioned earlier the slight decreases in the collective
Research, Education, and Economics Agency budgets. This is due
largely to reductions in the Agricultural Research Service and
the Cooperative State Research, Education, and Extension
Service budgets for buildings and for modernization of research
facilities.
The funding level for buildings and facilities reflects a
decrease of $72 million this year, $10 million from the
Agricultural Research Service, and $62 million in CSREES. Given
the constraints in this budget, as well as the future costs
that are associated with maintaining new facilities, we believe
it is more important to put funds into research and education
than into bricks and mortar, and we also believe that, since
the Secretary has just recently appointed the members of a new
task force to review our agricultural research facilities and
to make recommendations on a strategic plan for investment in
agricultural research facilities, that it is wise at this point
to defer decisions about new construction.
In closing, I would like to express my interest in working
closely with you and with this subcommittee as we continue to
develop the strategic plans and our annual performance plans
that are required under the Government Requirements and Results
Act. I thank you for the opportunity to present our budget
request for fiscal year 1998, and my colleagues and I are going
to be happy to answer any questions you might have.
Prepared Statements
Senator Cochran. Thank you very much, Dr. Woteki. We have
your written statement and it will be made part of the record
along with statements from Dr. Knipling, Dr. Robinson, Dr.
Offutt, and Mr. Bay.
[The statements follow:]
Prepared Statement of Dr. Catherine E. Woteki
Mr. Chairman, Members of the Committee, I am Dr. Catherine Woteki,
Acting Under Secretary for Research, Education, and Economics (REE) at
the Department of Agriculture. I am accompanied by Acting Deputy Under
Secretary, Dr. Floyd Horn, and the Administrators of the four agencies
in the Research, Education, and Economics mission area: Dr. Edward
Knipling, Acting Administrator of the Agricultural Research Service;
Dr. Bob Robinson, Administrator of the Cooperative State Research,
Education, and Extension Service; Dr. Susan Offutt, Administrator of
the Economic Research Service; and Mr. Donald Bay, Administrator of the
National Agricultural Statistics Service. Each Administrator has
submitted written testimony for the record. We have come with a few of
our senior staff to discuss the fiscal year 1998 Budget proposal in
detail. Before we begin, however, I would like to make a few general
remarks about the REE mission area and its four agencies.
In 1994, as a part of the USDA reorganization, the REE mission area
was created, bringing together the Department's primary agencies
responsible for research, statistics, education, and extension. Drawing
on their distinct, yet complementary capacities, the REE agencies play
a critical Departmental role by supporting the work of agencies in
other USDA mission areas--agencies responsible for programs that focus
on the environment and natural resource conservation, human nutrition,
food safety, rural development, and the production and marketing of
agricultural products. REE funded physical and biological research
continues to play a central role in providing the scientific foundation
for a vast array of advances being made in agriculture and related
industries. Our data collection and analysis provide policy makers,
program managers, and producers critical information about agricultural
commodities and markets. In collaboration with other USDA agencies, REE
also supports research, education, and extension to better understand
how good nutrition contributes to good health, to develop efficient
production practices that respect the integrity of the environment, to
facilitate adoption of food processing practices that promote safe
food, and to assist in the development of the food and agricultural
scientific and professional work force.
A compelling reason for reorganizing the four agencies into one
mission area, and therefore bringing together the biological and
physical sciences with the economic and statistical disciplines, was
the realization that this would create synergies leading to a stronger
research, education, and extension capacity in the Department; that it
would facilitate greater multi-agency and interdisciplinary
collaboration, resulting in more valuable and effective programs to
address agricultural, food and nutrition, environmental quality, and
rural development challenges facing the country.
I believe we are making the reorganization vision a reality, and
our efforts are beginning to pay dividends. In a little more than two
years, REE agencies have made great progress in meeting customer and
Department challenges through heightened cooperation. Evidence of that
collaboration is found in the fiscal year 1998 budget, as I will
discuss in a moment. The budget includes several initiatives
strengthened by participation of more than one REE agency.
More evidence of an increasingly effective Departmental research-
education-extension capacity is found in mission area and agency
activities related to implementation of the Government Performance and
Results Act of 1993 (GPRA). Working together, the REE agencies are
finding that GPRA affords us a valuable process for enhancing the
effectiveness of our programs. It will also help us convey to our
stakeholders, including Congress; the National Agricultural Research,
Education, Extension, and Economics Advisory Board, which has specific
GPRA-related responsibilities; and the general public, what the nation
is getting for its investment in agricultural research and extension.
The mission area, collectively, and the REE agencies, individually,
have developed draft strategic plans, framed by five general goals to
which the mission area is committed. The goals are: an agricultural
system that is highly competitive in the global economy; a safe and
secure food and fiber system; a healthy, well-nourished population;
greater harmony between agriculture and the environment; and enhanced
economic opportunity and quality of life for Americans. These goals are
derived from the broad public debate that codified the purposes for
agricultural research in the 1990 and 1996 Farm Bills. In addition, the
REE and agency plans have been reviewed by REE stakeholders, partners,
and customers. The mission area held three regional listening sessions
at which stakeholders from industry, the academic community, public
interest groups, farmers, ranchers, and others interested in REE
programs provided useful feedback on the REE plan.
Continuing its implementation of GPRA, the mission area is nearing
completion of a draft performance plan, framed by the five general
goals of the strategic plans. During the spring, the REE agencies also
will prepare individual performance plans using the framework of the
REE performance plan.
Preparation of the strategic and performance plans, as might be
expected, has been challenging. Particularly difficult is development
of annual or even five-year performance goals and performance measures
for fundamental research where potential payoffs are large but are
realized over longer time horizons. Our general approach to GPRA
performance measurement will be to use quantitative measures where
appropriate, but not to lose sight of the qualitative factors that are
ultimately so important in making judgments on the value of our work.
Executive branch officials and appropriators have mutual interests in
improving our systems for establishing goals, fixing accountability,
measuring progress, and communicating success. We intend to carryout
our responsibilities under GPRA with these points in mind. We look
forward to consulting with this subcommittee as we move forward
implementing GPRA.
ree's fiscal year 1998 budget
Now I would like to highlight the fiscal year 1998 budget for the
Research, Education, and Economics mission area. The REE budget request
for fiscal year 1998 is $1.816 billion, a decrease of $49 million or
2.6 percent from fiscal year 1997. I believe the budget, in total
funding and specific initiatives, represents a sound balance among
USDA's commitment to research, education, and extension investment and
the Administration's commitment to a balanced budget. To get on the
path to a balanced budget by fiscal year 2002, REE agencies, along with
other department agencies, have had to make difficult decisions to
reduce or terminate important programs in order to fund higher priority
programs. However, through a careful assessment of priorities, funds
for research actually increase by $11 million or 1 percent.
Returns on investment in public agricultural research and
development continue to be very strong. For example, the percentage of
disposable personal income we spend on food continues to decline,
reaching a low of 11 percent in 1995. This decline, sustained over many
decades, has been possible in large part due to increases in
agricultural productivity, which in turn is a product of research and
development and a central reason for its continued support.
Productivity growth has been higher in agriculture than most other
sectors of the economy, with an average annual rate of 1.9 percent
since the 1940's. Recently, our investments in agricultural research
have resulted in new technologies that enable farmers to prevent
adverse effects of production practices on the environment, to improve
our capacity to prevent and detect food-borne contaminants, and to
enhance the nutritional content of food. Studies, such as Huffman and
Evenson's 1993 study Science for Agriculture, continue to find that the
investment return on publicly-funded agricultural research and
development is high and greater than for most other sectors. The
returns for all research and development in agriculture are estimated
to be 35 percent annually, while those for pre-technology or pre-
development research--much of the kind of work funded through the
National Research Initiative--are considerably higher.
ree agency budgets
The Agricultural Research Service (ARS) fiscal year 1998 budget
stays essentially the same, $800 million, as in the current fiscal
year, although the fiscal year 1998 budget reflects adjustment of
priorities leading to an increase of $10 million in research and a
commensurate decrease in buildings and facilities improvement funds.
The budget also provides for redirected funding, making it possible for
the agency to allocate a total of approximately $30 million in
increased funding for high priority research programs. As the principal
intramural biological and physical science research agency in the
Department, ARS continues to play a critical role for the Department
and the larger agricultural community. Results from ARS's fundamental
research provide the foundation of applied and development research
carried out in many public and private institutions. The agency also
draws on its fundamental research to conduct research directed at
solving specific problems of national and regional importance and
responding to the research needs of other USDA agencies.
The Cooperative State Research, Education, and Extension Service's
(CSREES) budget decreases by $69 million to $840 million in fiscal year
1998. Funding for formula programs is held constant at fiscal year 1997
appropriated levels. The National Research Initiative (NRI) is
increased by $36 million, an increase of 38 percent. Decreased funding
is proposed for earmarked special grants programs, buildings and
facilities projects and selected extension programs. The Administration
continues to believe that the NRI competitive grants program provides
the most effective mechanism for eliciting and supporting the most
meritorious science being conducted by public and private universities,
Federal laboratories, and other research institutions and individuals
across the country. This year's increase in the NRI will be focused on
expanded research in three key areas: food safety, genetic enhancement
of plants, and environmental quality. In providing critical funding to
the research, education, and extension programs of the Land Grant
Universities and other higher education institutions across the
country, CSREES continues to play a central role in helping generate
new knowledge and technology and facilitating the transfer of that
knowledge and technology to those who can use it best.
The Economic Research Service's budget increases from $53 million
to $54 million. As the Department's principal intramural economics and
social science research agency, ERS conducts research and analysis on
the efficiency, efficacy, and equity aspects of issues related to
agriculture, food safety and nutrition, the environment, and rural
development. In an era of an increasingly market-oriented agricultural
sector, the need for economic analysis to understand the possible
implications of any new developments in such areas as technology,
policy, and trade agreements is critical for both public and private
sector decision makers. The fiscal year 1998 budget provides funds to
secure critical data to underpin that analysis.
Largely due to funding for the peak year of the Census of
Agriculture, the National Agricultural Statistics Service (NASS) budget
rises from $100 million to $120 million. Responsibility for the Census
of Agriculture was transferred from the Department of Commerce to NASS
as of October 1, 1996 and is being conducted under the agency's broad
authority to conduct agricultural surveys. We are seeking specific
authorizing legislation to clarify our authorities. I urge you to
support swift passage of this legislation. The changes in agricultural
policy in the 1996 Farm Bill make the need for NASS's statistical data
program more essential than ever. Comprehensive, reliable, and timely
data on U.S. agricultural commodities are critical for farmers,
ranchers, and other agribusinesses to make informed production and
marketing decisions in a highly competitive market. The new Census of
Agriculture program at NASS complements its core program and affords
the agency new program efficiencies benefiting the whole agency.
REE research activities soon will be enhanced by the Fund for Rural
America mandated in the 1996 Farm Bill. In January of this year, the
Department announced plans to allocate $46.1 million of the Fund's $100
million fiscal year 1997 funding for research, education, and extension
activities. Projects that address international competitiveness,
environmental stewardship, and rural community enhancement will be
supported with $33.3 million of these funds. The other $12.8 million
will be focused on Department priorities, including livestock
concentration, food safety, nutrition, food recovery, and
telecommunications. The grants will be awarded on a competitive basis
for multi-disciplinary projects that address short-and intermediate-
term issues. A request for proposals was published in January. Planning
grants will be made in late spring; standard grants in early fall.
I want to stress the importance of the competitive process for
making awards under this and other programs. Given the overall budget
constraints, the enormous needs for science and technology to address
agricultural-related issues and the general skepticism that
characterizes attitudes toward so many publicly supported activities,
it is important that we establish mechanisms to identify and support
work on the highest priorities by the best performers.
ree fiscal year 1998 initiatives
In developing the fiscal year 1998 budget request, we in REE have
focused on those activities that reflect the nation's and the
Administration's highest priorities. And we have targeted those
activities for new or increased funding. Those fiscal year 1998
priorities include food safety, human nutrition, integrated pest
management, emerging infectious diseases, the Census of Agriculture,
and Children, Youth and Families At-Risk. The new initiatives or
increases for on-going initiatives are closely aligned with the general
goals of our strategic plans. While some involve only one REE agency,
others take advantage of the complementary strengths of two or three. I
would like briefly to discuss each of these initiatives and relate them
to our general goals.
First, food safety. Our nation has the world's safest food supply,
yet we continue to experience outbreaks of foodborne illnesses. Each
year, foodborne diseases result in thousands of deaths, millions of
illnesses, significant loss of productivity, and costly medical
treatment nationwide and around the world. Enhancing our understanding
of the basic science underlying these diseases and promoting
development and adoption of food production, processing and handling
practices that significantly reduce their incidence will advance the
REE general goal of a safe and secure food and fiber system.
On January 25, 1997 the President unveiled a Food Safety Initiative
that will move us in that direction. The President's $43 million
initiative not only focuses on inspection, surveillance, and rapid
detection but also on research and education. Approximately $8 million
is included for REE agencies. Those funds will allow CSREES to launch a
$2 million food safety competitive special research grants program to
expand the base of knowledge needed to address high priority food
safety issues such as Campylobacter, E. coli, and salmonella. It will
add $4.1 million in ARS research into production, harvesting, and food
handling practices that would reduce the incidence of exposure to
microbial pathogens and improve methods to detect and survey the
pathogens. Building on the CSREES competitive grants program and the
ARS research component, the initiative provides CSREES $2 million in
additional funds for its Food Safety Extension Program to further
enhance food safety education programs, such as compliance education,
State food handler certification, and rapid exchange of food safety
information. Complementing this Administration initiative, food safety
will be one of three priority areas targeted for NRI increases in the
CSREES budget.
A second national initiative supported with fiscal year 1998
funding addresses human nutrition. It is increasingly clear that diet
and the nutritional content of food have a profound effect on human
growth, development, and life-long health. Yet our knowledge in these
areas is limited. We know that proper nutrition can reduce the risk of
chronic diseases of aging, such as heart disease, cancer, osteoporosis,
diabetes, hypertension, and obesity, but we still have a limited
understanding of these relationships. Contributing to the REE general
goal of a healthy and well-nourished population, this initiative
includes $12 million in the first of a new multi-year initiative to
significantly increase the ARS research capacity at its six national
nutrition research centers. In this first year, half the funds will
support research to further understand human dietary requirements, with
an emphasis on how nutrition relates to cognitive development in
children. The other half will fund a survey of food consumption by
infants and children to be used by the Department and the Environmental
Protection Agency (EPA) to assess dietary exposures to pesticides and
establish pesticide residue tolerance levels on agricultural
commodities in accordance with the Food Quality Protection Act of 1996.
The overall human nutrition initiative not only promises to increase
our understanding of how food affects health, but has other beneficial
effects as well. The knowledge gained will help set the research agenda
for animal and plant breeding. And promoting a healthier population can
indirectly help our economy by reducing medical costs and productivity
losses due to illness.
USDA's germplasm collections, supported by ARS, underpin much of
the cutting edge research currently being conducted in crop and animal
breeding and other biotechnology research to develop crops and
livestock that are resistant to disease, pests, and stress due to
adverse growing conditions. The collections are the source of important
traits that can be used in developing new crop varieties and animal
breeds with desirable characteristics. The $2 million funding increase
in the germplasm initiative will allow us to fill gaps in our National
Plant Germplasm System, preserving valuable plant and microbial
germplasm. In so doing, we will be facilitating the science that
supports several REE goals, including a secure production system and
increased commodity production. Research on genetic enhancement of
plants is also a priority area for the proposed NRI increase.
This fiscal year 1998 budget also includes funds to continue
implementation of USDA's Integrated Pest Management Initiative (IPM), a
multi-agency effort to develop environmentally-valuable IPM strategies
and bring 75 percent of the nation's cropland under integrated pest
management practices by the year 2000. In developing and promoting the
adoption of pest management strategies that carefully balance
environmental quality goals with producers' need to have economically
viable enterprises, this initiative is focused squarely on achieving
the REE general goal of enhanced harmony between agriculture and the
environment. As part of this initiative, the ARS budget includes $3
million for research that will focus on biological control of pests.
Another $1 million increase will permit ARS to conduct area-wide and
pilot test programs on ARS-developed technology ready for large-area
demonstrations. Increased IPM funding will allow CSREES to increase
research and extension support of regional IPM development and
implementation projects and research to develop pest management
alternatives to replace pest control technologies under consideration
for regulatory action by EPA. For the Economic Research Service, the
initiative includes an increase to support empirical analysis of the
relationships among adoption of conserving farm practices, economic
incentives, and environmental protection, recognizing that ultimate
adoption of IPM strategies depends heavily on their economic
implications for producers. A priority research area for the requested
increase in the NRI will be environmentally-oriented research.
The threat of emerging infectious diseases and exotic pests is the
focus of another new initiative that will contribute to the REE general
goal of a safe and secure food and fiber system. Whether a threat to
livestock and the safety of our food supply, such as ``Mad Cow
Disease'' or to plants, such as Karnal bunt, the introduction of
foreign diseases and exotic pests can pose a threat to consumer
confidence and raise the potential for economic disruption of
production. As part of the Administration's Emerging Infectious
Diseases Initiative, the budget includes an increase of $2.5 million
for research on both domestic and exotic emerging diseases of
livestock, focusing on understanding how the pathogens are transmitted,
what production conditions contribute to their incidence, and
development of detection methods. A second $2.5 million will be devoted
to developing methods to detect and strategies to control important
emerging plant diseases, such as Karnal bunt, a wheat disease found in
the U.S. for the first time in March 1996.
As the agriculture sector becomes more market-oriented and more
dependent on exports, the need for good information on that sector,
including production and markets, is greater than ever. Reliable data
is a prerequisite for the nation to have an agricultural sector that is
highly competitive in the global economy, one of the REE general goals.
This need exists for producers and others who want to make informed
decisions as they buy and sell in commodity markets, as well as for
public decision makers who need good information to make informed
decisions on public policies and programs. An important source of such
information is the Census of Agriculture. Every five years the Census
provides comprehensive statistical information on the agricultural
sector of the economy at the National, State, and county level. Because
of the six-year Census funding cycle, the funding level required to
support the Census program varies from year to year. We appreciate the
committee's support for our request for funding last year. We are
seeking an additional $18.5 million in fiscal year 1998 for the fourth-
and peak-year costs for final preparation of questionnaires, data
collection, and processing of 3.5 million Census forms.
Consistent with the President's commitment to improving our
children's education, the fiscal year 1998 budget includes increased
funding to expand CSREES's Children, Youth and Families At Risk (CYFAR)
program. Designed to ultimately empower youth, parents, and community
leaders to take responsibility for their own lives and that of their
community, the additional funding of $2.1 million will be focused on
enhancing statewide Extension capacity for developing and supporting
community-based programs for at-risk children and families. In so
doing, this initiative contributes to the REE general goal of enhancing
economic opportunity and quality of life for Americans, particularly
Americans who for one reason or another are not taking advantage of the
economic and other opportunities found in their communities. This
increase restores funding for CYFAR to its fiscal year 1995 level and
provides an additional $1.7 million to be targeted to the 1890
Institutions now eligible to receive Smith Lever 3(d) funding directly.
These are the highlights of six initiatives in the REE budget. A
full discussion of them can be found in the agencies' Explanatory
Notes.
building and facilities program
I mentioned earlier the slight decrease in the collective REE
agency budgets. This is due largely to reductions in the ARS and CSREES
budgets for building and modernization of research facilities. The
funding level for buildings and facilities decreases by $72 million,
$10 million in ARS and $62 million in CSREES. Given the overall
constraints within which we developed the REE budget, we continue to
believe that the Federal government should generally leave the
investment decisions on university facilities to State and institution-
level decisionmakers. In addition to the significant capital
commitments, these facility decisions entail major commitments for
programming, operations, and maintenance, commitments that Federal-
level officials are not in a position to make.
The Subcommittee should be aware that we are moving ahead on the
Strategic Planning Task Force mandated in the 1996 Farm Bill. Under the
Farm Bill provision, the Secretary of Agriculture is to establish a
Task Force to prepare a 10-year strategic plan for guiding future
Federal investment for constructing, renovating, consolidating, and, if
appropriate, closing agricultural research facilities. The Secretary
will be announcing the membership of the Task Force within a few weeks.
The Task Force will have two years to conduct a thorough study of the
building and facilities needs of the agricultural research system and
the capacity of the current facilities to meet those needs and, from
that assessment, develop the 10-year plan.
While we look forward to the recommendations of the Task Force,
nevertheless we believe we must move forward now on several projects
where needs are critical and immediate. We believe our reasoning for
funding these few crucial improvements is sound and would be consistent
with any future Task Force recommendations. The budget contains $23
million in funding for the U.S. Horticultural Crop and Water Management
Research Laboratory in Parlier, California. The product of careful
planning over several years, the new facility will allow consolidation
of several outmoded facilities and yield significant efficiencies when
compared to current operating costs. The Melaleuca Research and
Quarantine Facility at Ft. Lauderdale, Florida, reflects a continuing
Administration commitment to restoration of the Everglades ecosystem
and was designated by the Administration's South Florida Ecosystem Task
Force as a top priority. Melaleuca, an exotic weed tree, is adversely
affecting much of South Florida's fragile wetlands. This funding,
coupled with proposed research funding, will accelerate integration of
biological control technology into Melaleuca management efforts.
The budget also includes funding for a new facility in Montpellier,
France to house the European Biological Control Laboratory. The new
facility will replace crowded and dispersed temporary facilities that
seriously impede the Laboratory's program focused on discovering and
developing biological control agents for insect pests and weeds in the
U. S. that immigrated from Eurasia, the Middle East, and North Africa
and now seriously threaten U.S. agriculture. The new European
laboratory is essential to ensure future success of many domestic
laboratory programs directed toward biological control of agricultural
pests, including salt cedar, knapweeds, Russian wheat aphid, and many
other invasive insects and weeds. All other buildings and facilities
funding in the budget is for modernization of selected ARS facilities.
All the facilities designated for modernization currently have serious
deficiencies that are barriers to conducting efficient and effective
research.
summary
In summary, I want to emphasize that this budget, while very tight,
represents a continued recognition of the value of and commensurate
commitment to investment in agriculture research, statistics,
education, and extension. If U.S. agriculture is to continue to be a
dynamic, competitive sector in the global economy, and we as consumers
are to continue to harvest the fruits of agriculture's historical
success, then our national commitment to research, education, and
extension must continue. I thank you for this opportunity to share with
you my thoughts about the mission area and its agencies' budgets. We
welcome your questions.
______
Prepared Statement of Dr. Edward B. Knipling
Mr. Chairman, and members of the Subcommittee. I appreciate this
opportunity to present the Agricultural Research Service's budget
recommendations for fiscal year 1998, and highlight some of the
Agency's accomplishments of the past year.
In the past, the Congress has provided strong support for ARS and
its research mission. We appreciate the fact that this Subcommittee has
been instrumental in marshaling critical resources for USDA research.
Attaining national goals of a healthier population, environment
quality, and economic prosperity will require continuing the Nation's
commitment and investment in agricultural research.
The research that ARS performs, in the areas of health,
environment, and agricultural competitiveness, are more important than
ever. Projected population and economic growth over the next half
century will require world food production to double. Meeting this
demand will require new crops and new methods to maximize crop and
livestock yields consistent with recognized needs for environmental
stewardship.
Research can help the nation meet the food demands of the growing
population as well as address our food safety and environmental goals.
Research in genetics is producing increased crop yields by developing
crops that can resist disease, insects, and frost. Through genetic
engineering, traits that retard spoilage are being introduced to reduce
postharvest losses and costs, and increase the availability of
wholesome food. Genome maps will make it possible to identify gene
codes for specifically desired traits, such as lower fat content in
meat animals. With genome maps, scientists will also be able to produce
safer food by breeding animals resistant to foodborne pathogens, such
as E. coli 0157:H7 and Salmonella.
E. coli and Salmonella are two of the most prominent bacteria
associated with serious foodborne illnesses. Campylobacter causes an
estimated two million cases of illness each year. Another 800 Americans
become seriously ill each year from Listeria monocytogenes. The Centers
for Disease Control estimate that foodborne pathogens cause millions of
illnesses and contribute to thousands of deaths annually. Medical costs
and productivity losses total from $5 to $13 billion per year.
ARS scientists are hard at work to help ensure a safe, adequate,
and sustainable food supply. To reduce pathogen contamination in the
slaughter and processing of meat and poultry products, a Hazard
Analysis and Critical Control Point (HACCP) system is being
implemented. ARS is supporting that effort by identifying critical
points of pathogen contamination, and points where they can be reduced
or eliminated. The science-based HACCP system represents a significant
improvement over previous organoleptic systems which used sight, sound,
smell and touch to test the end-product for wholesomeness.
For example, faster, more accurate tests are being developed to
combat E. coli 0157:H7. Traditional tests for this foodborne bacteria
are time consuming and technically difficult to conduct, thus limiting
their usefulness. ARS scientists at Clay Center, Nebraska devised a
simple, rapid diagnostic test which will increase the testing of meat
and meat products, and substantially improve food safety. Numerous
other systems and technologies are being developed in both pre- and
post-harvest areas to reduce foodborne pathogens.
Our food supply is also being increasingly threatened by new and
emerging plant diseases and pests that affect the approximately 150
crops grown in the United States. Exotic organisms, once introduced
into this country, can explode into an epidemic. Just a few examples:
Karnal bunt disease of wheat has seriously disrupted the export market
for wheat growers in the southwestern U.S. Head scab of wheat and
barley has caused an estimated $2 billion in losses since 1993. Barley
stripe rust, which first appeared in Texas in 1991, has spread
throughout the western U.S. Soybean rust, a disease recently discovered
in Hawaii, is expected to cause serious losses should it migrate to the
mainland. And noxious and invasive exotic weeds which already infest 17
million acres of public lands are expected to double in five years.
Strategies for controlling emerging diseases and exotic pests
include the development of new and rapid tests for detection,
containment, and eradication. One of the strategies ARS is employing
involves Integrated Pest Management (IPM). As crop yields increase and
production systems change, the importance of protection from pests
increases. To maintain good stewardship over the environment,
strategies for pest management must shift from primary reliance on
chemicals to IPM strategies which combine multiple approaches, conserve
natural controls, and utilize chemicals when other means of control
have failed.
USDA has established an ambitious goal of deploying IPM on 75
percent of the Nation's crop acreage by the year 2000. Reaching this
goal will result in reducing environmental damage, particularly to the
water supply which can be contaminated by runoff from farms. AMS/PDP
samples tend to find no, or very low, residue. These pest management
strategies will be more cost-effective and sustainable over the long
term. The Food Quality Protection Act of 1996 may lead to tighter
controls on pesticides registered by EPA (due to tolerance
reassessment?) and farmers will have even greater need for the
alternative pest control technologies developed by and through USDA
programs in the IPM initiative.
Human nutrition plays a critical role in growth and development,
and good nutrition enhances an individual's productivity and quality of
life. Poor nutrition underlies many chronic conditions, such as
obesity, cardiovascular disease, cancer, osteoporosis, and diabetes.
Research is only now beginning to reveal how nutrients and genes
interact to cause various diseases. As the lead Federal agency in human
nutrition research, ARS scientists are researching the relationships
between diet and resistance to diseases, and determining the
nutritional needs of specific population groups, including infants,
children, and the elderly.
The agriculture-food sector is the country's largest industry,
responsible for over 15 percent of the Gross Domestic Product. U.S.
agricultural exports are projected to exceed agricultural imports by
$30.5 billion in 1996. Employment in the U.S. food and fiber system
represented 18 percent of all civilian jobs in the U.S. in 1995.
Over the past several years, ARS requests for funding increases for
genetics, food safety, human nutrition, environmental quality, and IPM
research have been supported by this Committee. During these same
years, ARS has also redirected base funds to finance these critical
initiatives.
In fiscal year 1998, ARS requests the Congress' continued support
for research--research which would increase crop and livestock yields,
improve food safety and nutrition, optimize the preservation of land
and water resources, and promote agricultural sustainability.
The Nation faces many challenges as this century draws to a close
and it moves into the 21st century--challenges to health and safety,
environment, and economy arising from a growing world population, an
increasing number of emerging diseases and pests, and an ever more
demanding concern for the environment. The ability to meet these
challenges depends upon the decisions that are made today.
ars strategic plan
All of the research that ARS currently performs and the research
initiatives ARS proposes to conduct in fiscal year 1998 meet one or
more of the Agency's five Strategic Plan goals. They are to provide
research which:
(1) Ensures the Nation an agricultural system that is highly
competitive in the global economy.
(2) Maintains a safe and secure food and fiber system.
(3) Maintains a healthy, well nourished population.
(4) Promotes greater harmony between agriculture and the
environment.
(5) Enhances economic opportunities and quality of life for
Americans.
Let me take a minute to identify where ARS' research programs fall
within these goals. The first goal includes research on cost-effective
agricultural production systems, postharvest control of pests, new uses
and products, and new and alternative crops. The second goal includes
ARS' pre- and postharvest food safety research. It also includes
research on plant and animal production systems, product quality,
reproduction and biological processes, germplasm and genetic resources,
and other research designed to ensure the security of U.S. food and
fiber production. All ARS' human nutrition research falls under the
third goal. The fourth goal includes research on natural resources,
waste management, integrated agricultural production systems, cropland
and grazingland sustainability, environmentally safe pest management,
and global change. And the fifth goal includes research which expands
economic opportunities to rural communities by providing new crops,
products and technologies; expanding markets; making small-scale
processing capabilities available, and sharing new knowledge through
information access and technology transfer.
These five broad goals are part of a draft Strategic Plan ARS has
developed in response to the Government Performance and Results Act of
1993. ARS' Plan establishes the broad structure for setting Agency
research priorities and allocating resources over the next five fiscal
years. It also provides for a broad framework for systematically
evaluating the impacts or outcomes of ARS' research programs.
fiscal year 1998 budget
ARS proposes funding of $726,797,000 for fiscal year 1998, an
increase of $9,971,000 over the fiscal year 1997 appropriation level.
The fiscal year 1998 Budget includes increases for selected research
initiatives which build upon ARS' base and contribute to the Nation's
economic well-being and quality of life. To help finance these
initiatives, ARS is recommending the elimination of important but
lesser priority research projects. In addition, ARS is recommending
modest increases for pay costs which will be partially offset by
proposed reductions in staff years.
Under its Buildings and Facilities account, ARS proposes
$59,300,000 for fiscal year 1998. These funds will be used to continue
the ARS facilities' replacement and modernization program.
proposed research initiatives
ARS is requesting $36,523,000 for new and expanded research
initiatives, and increased pay costs. These initiatives cover an array
of national research needs which directly respond to Administration and
Congressional priorities. They respond to the priorities of enhancing
the national economy and trade, preserving the environment, and
providing for a healthy citizenry.
Food Safety ($4,114,000).--As part of the Administration's Food
Safety Initiative, ARS is proposing $4,114,000 for pre- and post-
harvest food safety research. Further research into food-production,
harvesting, and handling practices that will reduce human exposure to
microbial pathogens, chemicals, and biotoxins--as well as into improved
methods to detect and survey these hazards--can eliminate or
significantly reduce an important cause of illness in the U.S. ARS
proposes $1,614,000 for additional research in preharvest food safety.
The research will develop methods and strategies for detecting and
controlling pathogens in the production of live animals to prevent the
contamination of meat and poultry products.
Postharvest operations, that is slaughter and processing, can be a
source of contamination of meat and poultry products. These operations
offer opportunities for intervention to prevent further spread of
pathogens to food products. ARS is recommending an increase of
$2,500,000 in postharvest food safety, for the development of advanced
systems and new technologies that prevent or reduce pathogen
contamination of meat, poultry, and egg products. The research will
also provide technologies to reduce pathogens in fruits and vegetables.
Emerging Diseases/Exotic Pests ($5,000,000).--The introduction of
foreign animal diseases, incidence of diseases transmitted from animals
to humans, and prevalence of meatborne food pathogens have increased
dramatically over the past five years. Prevention and control of
emerging animal diseases can avoid economic disruptions and loss of
consumer confidence like that caused by Bovine Spongiform
Encephalography (``Mad Cow Disease'') in Great Britain. Measures to
control organisms affecting humans, such as E. coli 0157:H7,
Salmonella, Cryptosporidium, Lyme disease, and Hantavirus disease will
prevent serious illness and disease. One-half of the proposed increase
will be used to research emerging exotic diseases of livestock, and
emerging domestic and zoonotic diseases of livestock.
The other half of the proposed increase will be used to fund
research on emerging plant diseases, and noxious and invasive weeds.
With rapidly expanding international commerce and travel, the
introduction of new pests and diseases into U.S. agriculture is more
ominous and threatening. For example, the silverleaf whitefly which
invaded the U.S. in the 1980's, now attacks hundreds of plant species
including important agricultural species such as cotton and vegetable
crops. Karnal bunt disease of wheat, which was first recognized in the
U.S. in 1996, has seriously disrupted the wheat market for growers in
the southwestern U.S.
Grazinglands ($1,000,000).--Grazinglands which include irrigated
pastures, perennial forage crops, and the prairies and arid rangelands
of the West cover about half of the Nation's land surface. They also
encompass most of the country's wildlife habitat. Most of our water for
industry, domestic use, and irrigated agriculture comes from grazed
watersheds. Grazinglands support about 100 million beef cattle, 10
million dairy cattle, and 11 million sheep. They also provide food and
fiber for domestic consumption and export, and directly support the
economies of rural communities.
Despite the importance of grazinglands, critical gaps exist in the
knowledge required to develop better management technologies. More
efficient and profitable forage production systems are essential for
U.S. agricultural production to remain competitive. New knowledge and
technology is needed for mitigating the impacts of intensive forage/
livestock production systems. The proposed increase will be used to
produce more profitable forage/livestock production systems while
minimizing environmental impacts.
Genetic Resources ($2,000,000).--USDA's plant germplasm collections
underpin crop breeding efforts in this country. The collections are the
sources of important crop characteristics, such as host plant
resistance to combat pests and stresses. The National Plant Germplasm
System (NPGS) presently maintains over 450,000 different germplasm
samples. Of the proposed increase, $1,500,000 will be used to fill gaps
in the NPGS collection, and to preserve rare and unique germplasm
samples.
Microorganisms can play positive roles in the soil and the
detoxification of the environment, nitrogen fixation in lieu of
chemical fertilizers, insect control, and decomposition of organic
wastes. Other pathogenic strains of microorganisms are destructive to
crops and livestock. Plant breeders need to have access to the strain
diversity of important diseases affecting crops in order to build broad
spectrum host resistance. Veterinarians also need access to pathogenic
strains to develop effective vaccines to protect live animals. Numerous
valuable microorganisms will be lost soon unless a concerted effort is
made to acquire, document, and preserve them. Of the proposed increase,
$500,000 is recommended for preservation of a microbial germplasm
collection.
Integrated Pest Management ($4,000,000).--USDA has established a
goal of deploying IPM on 75 percent of the Nation's croplands by the
year 2000. Two kinds of research are needed to meet this goal. First,
basic studies are needed that generate new fundamental knowledge, with
a focus on pests and the means of controlling them. Second, a more
holistic, systems-oriented approach is needed to put together the
components of an IPM strategy in the best combination. The proposed
increase will focus on areawide IPM and pilot test programs;
augmentative and biologically-based IPM in field, horticultural and
vegetable crops; and host-plant resistance and pest management
strategies.
South Florida Ecosystem Restoration ($2,000,000). In 1993, a 5-year
Interagency Agreement on South Florida Ecosystem Restoration was signed
by the Departments of Interior, Commerce, Army, Justice, Agriculture,
and EPA. As part of a task force, the Department of Agriculture has
been asked to perform research to resolve the ecological, hydrological,
and agricultural problems which hinder sustainable agricultural
production in the Everglades Agricultural Area. The requested funds
will be used to develop management strategies and biological agents for
the control of melaleuca and other harmful nonindigenous species.
Related to this initiative, ARS is also requesting $4,000,000 for
construction of a quarantine facility in Ft. Lauderdale.
Human Nutrition ($12,000,000).--ARS is the lead Federal agency for
human nutrition research. The Agency has the infrastructure and
scientists required to improve the nutritional health of all Americans,
a goal of this Administration.
Nutrition has a profound effect on human growth and development,
yet there is only limited knowledge in this area. Additional research
is needed to understand how proper nutrition can prevent the
development of lifelong nutritional deficiencies that lead to chronic
diseases, such as obesity, heart disease, cancer, osteoporosis, and
diabetes. Similarly, research is needed to understand the nutritional
requirements that promote health and enhance quality of life.
Half of the proposed increase will be used to fund research to
further understand dietary requirements. The other half of the proposed
increase will fund a survey of food consumption by infants and
children. The survey has been requested by the EPA which is concerned
that current food consumption data do not provide sufficient sample
sizes to adequately estimate pesticide intakes by children.
In addition to the proposed research initiatives, ARS is also
recommending $6,409,000 to finance anticipated fiscal year 1998 Federal
pay raises and associated costs.
project terminations and staff year reductions
In order to meet Administration streamlining goals, the Agency is
proposing a decrease of $3,500,000 consistent with the reduction of
Agency staff years. To help finance the fiscal year 1998 proposed
research initiatives, ARS is recommending the termination and
reallocation of selected research projects totaling $23,023,000. These
projects represent important but lesser priority research projects. The
termination of these projects, along with additional funding for the
proposed increases, will enable ARS to more sharply focus its limited
resources on national research priorities identified in the fiscal year
1998 Budget Estimates.
buildings and facilities
Many of ARS' facilities are inefficient and outdated. Major systems
(i.e., water, heating, ventilation air-conditioning, electrical, etc.)
in many of ARS' facilities have long passed their useful life
expectancy and fail to meet building code requirements. The
modernization or replacement of these facilities which began several
years ago remains a high priority.
In fiscal year 1998, ARS recommends under its Buildings and
Facilities account a total of $59,300,000 for continuing the
modernization or replacement of selected laboratories and facilities.
Beltsville Agricultural Research Center, Beltsville, Maryland
($3,200,000).--The Center is recognized as one of the largest
agricultural research centers in the world, in both program scope and
concentration of scientists. Over 300 scientists and 1200 support
personnel work at the Center on programs in animal and plant
productivity, natural resources and environmental sciences, product
quality, and human nutrition. Modernization of the Center began in
fiscal year 1985. Funding will be used to continue the modernization
program, including miscellaneous small projects and contingencies.
National Center for Agricultural Utilization Research, Peoria,
Illinois ($8,000,000).--The Center performs vital research on new
agricultural uses and food safety. Funding will be for continuation of
the facility modernization program, specifically for renovation of the
North Wing.
Eastern Regional Research Center, Philadelphia, Pennsylvania
($5,200,000).--The Center conducts critical research on new uses for
farm commodities that leads to the development of new domestic and
foreign markets. A facility condition study indicated that the
utilities and building infrastructure have reached the end of their
usefulness. A modernization program was developed and divided into 9
phases. The proposed funding will be used for construction of phase 4
of the Chemical Wing laboratory.
Southern Regional Research Center, New Orleans, Louisiana
($1,100,000).--The Center performs research on postharvest processing,
product enhancement, and safety and use of agricultural commodities.
The Center research includes: improving the quality of cotton products,
and the safety and health of cotton workers; increasing the efficiency
of food-processing systems; and enhancing the nutritional value of food
products, such as rice and peanuts. The proposed funding will be used
to continue with the modernization of the Center, specifically to begin
the design of the Industrial Wing.
Plum Island Animal Disease Center, Greenport, New York
($5,000,000).--The Center conducts research and diagnostic work on
foreign animal diseases that are an ongoing threat to U.S. livestock.
It is the only site in this country authorized by Congress to carry out
such research. Funding will be for continuation of the modernization of
the Center, principally replacement of the boiler plant and
miscellaneous projects.
U.S. Horticultural Crops and Water Management Research Laboratory,
Parlier, California ($23,400,000).--The proposed funding will be used
to finance the construction of a replacement laboratory in Parlier. The
U.S. Horticultural Crops and Water Management Research Laboratory which
investigates problems related to Western production and postharvest
agriculture is currently in Fresno. New housing developments to be
built one quarter mile from the laboratory has placed restrictions on
agricultural spraying which makes the present site unsuitable for
research activities.
Melaleuca Research and Quarantine Facility, Ft. Lauderdale, Florida
($4,000,000).--Melaleuca is adversely affecting Lake Okeechobee, the
Everglades National Park, and Big Cypress National Preserve. This weed
tree reduces wildlife and native vegetation, pumps large quantities of
water into the air via evapotranspiration, and is a navigational and
fire hazard. The proposed funding is for construction of a facility
which will serve as the quarantine facility for melaleuca biological
control insects brought into the United States from Australia.
Construction of this facility was designated by the South Florida
Ecosystem Restoration Task Force as one of the highest priority
initiatives to ensure restoration of the Everglades National Park.
National Agricultural Library, Beltsville, Maryland ($6,000,000).--
NAL, which is the largest agricultural library in the world, serves as
a national resource for access to information on agriculture and
related sciences. Built in 1968, many of the building systems are
becoming unreliable and require replacement. A facility condition study
identified numerous code, mechanical, electrical, and architectural
deficiencies. The proposed funding will be used to begin addressing
some of the major deficiencies, including installation of sprinklers,
first floor renovations, replacement of boilers, and miscellaneous
projects.
European Biological Control Laboratory, Montpellier, France
($3,400,000).--Many of the insects pests and weeds in the U.S. are of
European or Asian origin. The insect pests attack crops and domestic
animals, ornamentals, and forests; the weeds infest millions of acres
of pasture and croplands. The Laboratory researches and introduces
suitable natural enemies (i.e., insects, mites, and pathogens) into the
U.S. to control insect pests and weeds. Currently, the Laboratory is
housed in temporary facilities which are crowded and dispersed. In
addition, there is no quarantine greenhouse. Purchase of a new
laboratory site, and planning and design of the new facility has been
completed. The proposed funding will be used to proceed with
construction.
Mr. Chairman, this concludes my statement. I will be happy to
respond to any questions you may have.
______
Prepared Statement of Dr. B.H. Robinson
The mission of CSREES is to benefit people, communities, and the
Nation through cooperative work with our partners and customers to
advance research, extension, and higher education in the food and
agricultural sciences and in related environmental and human sciences.
CSREES is a Federal partner in a partnership that includes the 59 State
and Territorial Agricultural Experiment Stations; the 17 1890 land-
grant institutions, including Tuskegee University; the 63 Forestry
Schools; the 27 Colleges of Veterinary Medicine; 42 Schools of Home
Economics; and the 29 Native American Institutions which now have land-
grant status.
In addition to the land-grant partners, CSREES has partners in
virtually all segments of the agricultural community, including private
and public colleges and universities; Federal laboratories; private
industry; State, county, and local governments and entities; and
individuals. The Cooperative Extension Services, our state partners for
extension programs at the land-grant universities, link the education
and research resources of the U.S. Department of Agriculture and the
land-grant universities with 3,150 county and administrative units
throughout the country.
This is certainly an indicator of the breadth of the partnership to
which we belong. In fact, we look forward to further expansion of that
partnership to include Hispanic-Serving Institutions with the
initiation in 1997 of the our new Hispanic-Serving Institutions Grant
Program. This array of CSREES partners assures that the best and most
diverse talents are tapped to address current and future problems
facing agriculture and rural America, particularly as we prepare for
the 21st Century.
The research, extension, and education components of the
partnership interact to provide coordinated approaches to problems of
regional and national interest. Our land-grant universities and other
partners conduct fundamental and applied research to provide the
knowledge required to combat problems encountered in the development
and sustainability of agriculture and forestry and in the improvement
of the economic and social welfare of rural and urban citizens. Our
land-grant partners, through the Cooperative Extension System, funnel
this research to a network of nonformal educational, or extension,
programs. This knowledge is used as a basis for practical
decisionmaking to strengthen and sustain individuals, families, and
rural and urban communities throughout the Nation. And, finally,
recognizing that education is the catalyst for moving this nation
successfully into the next century, CSREES supports several integrated
higher education programs to stimulate and enable colleges and
universities to provide the quality of education necessary to
strengthen and replenish the nation's food and agricultural scientific
and professional work force.
Changes in agriculture and the world in which we live have
necessitated that the programs we administer and the client base we
serve be broadened. While the scope and complexities of our programs
have expanded, CSREES has continued to operate on extremely low
administrative costs of about 3-4 percent. This indicates that we
function effectively on a very small percentage of an annual
appropriation of approximately $900 million, making maximum program
funding available to the American public through our partners.
As CSREES enters its third year after the merger of two former
agencies, the Cooperative State Research Service and the Extension
Service, we have been successful in meeting many of the early
challenges facing us to find innovative and efficient approaches to
integrating extension programs with parallel research programs. We have
strived to link research and extension objectives under single programs
where appropriate.
One example of our efforts to integrate research and extension
objectives is the food safety area. The public is demanding, and should
be assured of, a safe, high-quality food supply. Finding ways to reduce
or eliminate food-borne risks spans both research and extension, from
developing risk minimizing practices in growing animals and crops,
attending to safety issues, including proper pre- and post-harvest
practices, to introducing food processing methods at plants that
incorporate pathogen reduction and Hazard Analysis and Critical Control
Point (HACCP) measures, to handling the food safely during
transportation and distribution and, finally, to promoting safe food
handling by the consumer.
Food safety is one of three broad categories of research which is
proposed for increased funding in 1998 under our National Research
Initiative (NRI) Program. In addition, we are requesting funding in
1998 for a new competitive Food Safety Special Research Grant. Food
safety is also one of the Cooperative Extension System's National
Initiatives, and extension activities in food safety are funded under
Smith-Lever 3(d) funds. Our goal is that these programs will complement
each other to foster multi-disciplinary collaboration and participation
from diverse sectors to solve complex food safety issues, provide the
basis for new training programs and, ultimately, assure public health.
Other examples of parallel extension and research programs that we
have been integrating are Water Quality, Sustainable Agriculture,
Integrated Pest Management, and Pesticide Impact Assessment.
Coordinating and integrating extension, research, and higher education
activities effectively at the national level to solve critical issues
faced by the agricultural community can only be achieved in cooperation
with the university system and other partners.
The Congressionally mandated Government Performance and Results Act
(GPRA) requires that Federal agencies develop strategic plans that
correlate to the formulation of agency budget requests and that adhere
to the ``management for results'' concept. The draft CSREES Strategic
Plan outlines our expectations for agricultural research, education,
and extension for a five-year period from 1997-2002. It also provides a
mechanism for assessing and redirecting agency programs to achieve
strategic goals.
CSREES is one of four agencies in USDA's Research, Education, and
Economics (REE) Mission Area. The draft CSREES Strategic Plan is linked
to five broad goals or outcomes for the plan of the REE Mission Area
and represents the work of our administrative and program staff and
partners with input at the Federal, State and local levels.
The broad goals or outcomes of the REE Mission Area are the
underpinnings from which CSREES has and will continue to initiate
program strategies which will be explicitly stated in the annual
performance plans. These strategies, in combination with program action
and implementation by the university system and other partners, will
lead to joint accomplishments in research, extension, and higher
education in the food and agricultural sciences and related
environmental and human sciences. The five broad goals or outcomes of
the REE Mission Area are: An agricultural production system that is
highly competitive in the global economy; a safe and secure food and
fiber system; healthy, well-nourished population; greater harmony
between agriculture and the environment; and enhanced economic
opportunity and quality of life for Americans.
Framed by the same goals, our draft Strategic Plan focuses on
planning and attaining measurable outcomes and allows for the
accountability of funds in response to shared priorities for work at
the national and State levels. Of course, our Strategic Plan will be an
ever-changing document.
With input from the university system and other partners, the
Strategic Plan will be continuously reviewed and updated to respond to
new and emerging issues important to the citizens and the Nation.
fiscal year 1998 budget request
The budget submitted to Congress by the President requests
$840,153,000 for the Cooperative State Research, Education, and
Extension Service. This is a decrease of $69.2 million, or
approximately 8 percent, from the current appropriation. Budget
highlights are provided below:
food safety
Reducing the incidence of food-borne illness is a top priority of
the Administration. On January 25, 1997, President Clinton announced an
interagency Food Safety Initiative in which USDA, including CSREES, is
an important participant. As part of the Administration's Initiative,
CSREES is requesting $2 million in fiscal year 1998 to establish a new
competitive Ensuring Food Safety Special Research Grant Program.
Foodborne pathogens such as E. coli, and water-borne pathogens such as
Cryptosporidium, have become major threats to public health. These
threats and those of other new and re-emerging infectious diseases that
affect our food supply mandate that we enhance and expand our existing
programs in food safety to find ways to reduce and eliminate food-borne
diseases. USDA's action agencies, including the Food Safety and
Inspection Service, look increasingly to research programs to provide
scientific information on which to base their regulatory and policy
decisions about these issues. This addition to the CSREES funding
portfolio would expand the base of knowledge needed to address high
priority food safety issues facing industry and consumers.
The new Ensuring Food Safety Special Research Grant program will
consider pre- and post-harvest/slaughter issues related to biological
aspects of food safety, reductions in microbials and pathogens, as well
as the social and economic implications of ensuring a safe food supply.
It will complement the longer term, more fundamental food safety
research supported under our NRI Program, the more longer-term food
safety research programs of ARS, and the food safety education and
training programs supported under the extension portion of our budget.
We also are proposing a $2 million increase for our parallel
extension Food Safety Program funded under Smith-Lever 3(d) as part of
the Food Safety Initiative. Currently, food safety extension activities
address a wide variety of food safety and quality issues nationwide.
The funding increase for these activities will be used to further
enhance food safety education programs with outcomes focused on pre-
harvest education; Hazard Analysis and Critical Control Point (HACCP)
and other Quality Assurance programs; compliance education; state food
handler certification programs; increased use of recommended safe food
handling practices by industry and consumers; and rapid exchange of
food safety information.
The funding proposed for these two programs will help provide the
critical link between food safety research and education by supporting
joint priority planning and programming, and increased
multidisciplinary collaboration and participation among researchers and
educators. These activities will directly promote two of the REE
Mission Area Goals: a safe and secure food and fiber system; and a
healthy, well-nourished population.
pest control programs
The Integrated Pest Management (IPM) program is another example of
the substantial progress we have made in integrating parallel research
and extension programs. The research activities supported with IPM
funds will develop new pest management tools to address identified
critical pest problems in crop production and will focus on
implementing ecologically-based pest management tactics. The extension
activities supported with IPM funds will accelerate the transfer of
proven pest management technologies from the researchers to farmers,
crop consultants, ranchers, and other end-users to increase
profitability while protecting human health and our environment.
Increases are requested for Improved Pest Control funding to
support these research programs: Pest Management Alternatives
(formerly, Emerging Pest and Disease Issues), Integrated Pest
Management, Expert IPM Decision Support System, Minor Crop Pest
Management (formerly, Pesticide Clearance), and Pesticide Impact
Assessment. Funds are included for extension activities under the IPM
and Pesticide Impact Assessment programs. Activities supported under
these programs directly contribute to the Department's IPM Initiative
which calls for implementation of IPM practices on 75 percent of U.S.
crop acreage by the year 2000. The budget includes increases totalling
$17.3 million for these research and extension pest management and
pesticide related programs.
The activities supported by the CSREES Pest Control Programs will
directly promote the following REE Mission Area goals: an agricultural
production system that is highly competitive in the global economy; and
greater harmony between agriculture and the environment.
pesticide applicator training
We are proposing an increase of $1.5 million in fiscal year 1998 to
initiate a redesigned Pesticide Applicator Training (PAT) Program. This
is a unique collaborative effort between USDA and the Environmental
Protection Agency, which is making a parallel request for funding in
its budget for the program. The purpose is to educate users of
restricted-use pesticides on safe and environmentally sound methods of
pesticide application. Environmental concerns over the sale, use, and
disposal of pesticides are key elements in teaching plans and
educational materials developed by state extension services. This
collaborative effort will be especially beneficial in helping the
extension specialists reach growers and producers on pesticide safety
and regulatory requirements. The PAT program directly promotes the REE
Mission Area goal to achieve harmony between agriculture and the
environment, and contributes to the goal of a safe, secure, food and
fiber system by addressing programs to meet the mandates of the 1996
Food Quality Protection Act.
national research initiative
An increase of $35.8 million is requested for the National Research
Initiative (NRI), USDA's major merit-reviewed competitive research
grants program. ``Merit review'' takes into account both quality of
science and relevance of the proposed research to key problems of
enduring importance to agriculture, food, and the environment. The
competitive mechanism of funding assures that limited financial
resources are used to support only the highest quality research.
These funds provide for fundamental and mission-linked research
relevant to agriculture, food, and the environment. Fundamental
research tests scientific hypotheses and provides basic knowledge that
supports applied research and from which major conceptual breakthroughs
are expected to occur. Mission-linked research aims at solving
identified high-priority problems and may be either basic or applied in
nature. The research supported by the NRI Program also may involve a
multidisciplinary approach, or the integration of researchers from two
or more disciplines encompassing the biological, physical, chemical, or
social sciences.
Research supported under the NRI program ensures our nation's
farmers will retain their technological edge. Of particular concern is
the need to expand the science base for the Hazard Analysis and
Critical Control Point (HACCP) approach to reducing food-borne illness
due to microbial pathogens. The health of the environment is also a
major concern. Many production practices, such as the excessive use of
pesticides, fertilizers and tillage, continue to be a major cause of
environmental degradation. In addition, more research is needed on
plant genetics leading to improved crops that resist pests and diseases
and environmental stress and possess other desirable traits. Therefore,
the increase we propose for the NRI program will expand research in
three key areas: food safety, environmental quality, and the genetic
enhancement of plants. The NRI Program directly promotes all of the
five REE Mission Area goals by ensuring the highest quality of research
is directed at increasing the knowledge base needed to effectively
address national issues, problems, and concerns related to agriculture,
food, and the environment.
research, education, and economics information system
We are requesting an increase of $600,000 for the Research,
Education, and Economics Information System (REEIS). The REE Mission
agencies which, in addition to CSREES, include the Agricultural
Research Service, Economic Research Service, and National Agricultural
Statistics Service, currently lack a comprehensive, integrated, user-
friendly electronic program information system. The need for
complementary and integrated databases among the four agencies was
significantly increased as a result of the USDA reorganization several
years ago. GPRA further emphasizes the increased accountability and
financial management functions which can be addressed by REEIS.
In recent years, the need for this type of system has become more
urgent for several reasons. One, a rapid and comprehensive information
system is needed to serve as a national reference source for
development of new research and education projects on such diverse
issues as increasing productivity in agriculture and processing,
improving the safety and quality of food, and enhancing the
sustainability of the environment and rural communities. Two, in the
quest to get the maximum value from research dollars, Federal/State
policy makers and administrators are requiring empirical analyses to
account for historical, current, and future use of public funds and to
provide a basis for redirecting funds to higher priority problems.
Three, the GPRA has imposed reporting demands which current,
decentralized information systems are not prepared to adequately
satisfy. The REEIS will promote the five REE goals by providing
current, accurate, and comprehensive information to facilitate
evaluation analyses and policy decisions relating to the research,
education, and economics programs within the Mission Area.
Section 804 of the 1996 Farm Bill authorized the development of
this type of information system, and a modest amount of funding was
made available in the fiscal year 1997 appropriation for start-up costs
associated with this effort. Approximately $400,000 is being used for
planning the design and development of the REE Information System.
CSREES has arranged for two leaders from academia to oversee
programmatic content design and technical design of the system. A
National Steering Committee has been established to provide advice and
guidance throughout the development and implementation phases and a
private sector firm specializing in public sector information systems
will be engaged to design, develop, test, and install system software
and hardware. The proposed increase of $600,000 for the REE Information
System in fiscal year 1998 will allow for the implementation, operation
and maintenance of a prototype system.
children, youth, and families at risk
An increase of almost $2.15 million is requested for the Children,
Youth, and Families at Risk (CYFAR) program, which is funded under
Smith-Lever 3(d) and focuses on America's children, youth and families.
Of the total increase, $446,000 will be used to bolster ongoing
programs in this critical area. For example, each State has identified
youth at risk as a priority, and funding from this program supports
community collaborations, school-age child care programs, and
strengthened science and technology programs. Of the proposed increase,
$1.7 million will be targeted to the 1890 Institutions to provide
opportunities to build statewide extension capacity for supporting
community-based programs for at risk youth and families consistent with
the 1996 Farm Bill. Specific emphasis will be placed on electronic
connectivity to provide computers, software, Internet connections, and
technology training for extension staff and participants. This
targeting of funds is significant because eligibility under the Smith-
Lever 3(d) programs has previously been limited to the 1862 land-grant
institutions. However, the Farm Bill specifies that the 1890
Institutions are eligible to apply for and receive directly new and
increased funds made available after September 30, 1995, to carry out
3(d) programs or initiatives, which would include the CYFAR Program.
CYFAR directly promotes the REE Mission Area goal of enhanced economic
opportunity and quality of life for Americans.
sustained funding support
The State-Federal partnership in food and agricultural research,
education, and extension has benefited both American consumers and the
agricultural industry and merits continued strong support. The Hatch,
McIntire-Stennis Cooperative Forestry, Smith-Lever, and Animal Health
and Disease Research formula-based programs are proposed for funding at
the 1997 appropriation levels. The formula funds have an impact far
greater than the actual amount of funds provided. Each Federal dollar
provided leverages 4 to 5 additional dollars from state, local, and
private sources, maximizing the Federal investment in agricultural
research, education, and extension. Also, these funds constitute a
powerful force in bringing about inter-state cooperation and Federal-
State collaboration in the planning and conduct of these activities.
Sustaining formula funding strengthens the Federal investment in the
research and extension infrastructure to respond to national priorities
and critical needs.
The Department continues its focus on helping limited resource
farmers and other disadvantaged populations. Funding is maintained at
the 1997 appropriation levels for extension formula programming at the
1890 Institutions, the Evans-Allen research formula program, the 1890
Capacity Building Grants Program, and the 1890 Facilities Program.
The fiscal year 1998 Budget Request proposes continued support for
most of those Special Grants that concentrate on problems of national
and broad regional interest beyond the scope and resources of the
formula-based programs. Funding is maintained at the 1997 appropriation
level for global change, minor use animal drugs, national biological
impact assessment program, rural development centers, water quality,
and pesticide impact assessment. Other grant programs, such as Regional
Aquaculture Centers and Sustainable Agriculture Research and Education,
are also funded at the 1997 level.
Funding is also maintained at the 1997 level for several of the
Smith-Lever 3(d) programs, such as Rural Development, the Expanded Food
and Nutrition Education Program, Indian Reservation Agents, and
Sustainable Agriculture.
higher education programs
Fiscal year 1998 funding for most of our Higher Education Programs
is proposed to be sustained at the 1997 levels. These programs include
the National Needs Graduate Fellowships Program, Higher Education
Multicultural Scholars Program, Tribal Colleges Education Equity Grants
Program, Tribal Colleges Endowment Fund, and the Hispanic-Serving
Institutions Education Grants Program. We have requested a modest
increase of $350,000 for our Institution Challenge Grants Program to
return the program to its 1996 level and enable us to encourage more
colleges and universities to improve the quality of their curriculum in
a broader range of areas and attract a wider range of students to the
food and agricultural sciences.
proposed eliminations
As part of the Administration's efforts to balance the budget, the
CSREES Budget Request proposes eliminating $42.2 million in funding for
earmarked Special Research Grants which target specific, local
concerns; $500,000 for Critical Agricultural Materials; $475,000 for
Rangeland Research; $4.5 million for Farm Safety and Water Quality
under Smith-Lever 3(d); $3.2 million under the Renewable Resources
Extension Act; $1.167 million for Agricultural Telecommunications; $2.6
million for Rural Health and Safety Education; and $15.4 million for
earmarked special projects under the Federal Administration line items
for research and extension. Generally, these programs are state
specific and/or do not address current regional or national priorities.
Hatch and Smith-Lever (b) and (c) formula funds are available at the
discretion of the states to support activities meeting largely state or
local needs. Also, in keeping with the Administration's policy of
awarding research and construction grants through a competitive, merit-
review process, $61.6 million for the current Research and Education
Buildings and Facilities program earmarked for specific institutions is
proposed for elimination in fiscal year 1998.
program accomplishments
Although there are numerous examples of CSREES-funded success
stories, below are a few examples representative of outstanding
research, education, and extension activities where our programs have
made a difference:
--CSREES funding has contributed to the peach Integrated Pest
Management (IPM) program at Rutgers University to enable
participating peach growers in the state of New Jersey to
reduce their use of pesticides by 75 percent. In addition,
chemical pesticide use was totally eliminated for some pests.
In its annual report on the IPM project supported by CSREES,
Rutgers University projected that, if IPM practices followed by
the growers participating in the Rutgers program were adopted
by all peach growers in the state, pesticide expenditures would
be reduced there by nearly $1 million annually.
--A disease affecting the catfish industry is Winter Saprolegniosis.
About 10 percent of catfish die each year from this disease
which results in significant economic losses annually for the
catfish industry. With funding from the NRI program, scientists
at the University of Mississippi, while studying disease
mechanisms and immunity, discovered that Winter Saprolegniosis
can be prevented by adding formalin or diquat to the water at
concentrations currently approved by the Food and Drug
Administration for use in catfish ponds for other purposes.
--NRI-supported researchers at Oregon State University have invented
a unique method for preventing food spoilage and food-borne
illness caused by microorganisms. They were recently issued a
patent and are hoping to commercialize the result of their
efforts, which involve spreading food surfaces with a protein
called nisin that kills any bacteria that comes in contact with
the food surfaces. The nisin molecules are so firmly attached
to the food surfaces that they resist removal even after
washing. It is anticipated that nisin-derived solutions will
work on wood, aluminum, stainless steel, acrylics and possibly
other surfaces, which may increase the potential use of this
microorganism ``deflector'' beyond reducing food-borne
illnesses. For example, the use of nisin may be beneficial in
the medical world to protect patients against infections during
some procedures, such as organ implantation.
--One of the most debilitating diseases of pigs in recent years has
been Porcine Reproductive and Respiratory Syndrome (PRRS). At
one point, it affected almost every herd in every state that
raised pigs and resulted in such significant economic losses
that a typical 600-sow farm could lose $150,000-$180,000 per
outbreak of PRRS. With support from the NRI Program,
researchers at South Dakota State University, in collaboration
with private industry and other university researchers, used
both conventional and ``high tech'' laboratory techniques to
develop a vaccine that is successfully used to combat the PRRS
virus.
--Georgia extension specialists are helping farmers increase
productivity and profitability while enhancing the environment.
Farmers have spread more than 42 million gallons of effluent
from lagoons that store dairy cattle wastes on crops as
fertilizer without surface or ground water problems. This has
contributed to a 55 percent decrease in undesirable phosphorus
in nearby lakes. Land-grant universities in most states are
working on similar projects with livestock wastes.
--Best known for their learn-by-doing philosophy of youth
development, state 4-H programs have successfully adapted their
curricula into school enrichment programs. A Tennessee program,
4-H Building Esteem through Science and Technology, improved
the science scores of participants by 29 percent on the state's
competency test.
--In Arizona, extension specialists developed brochures for use by
farmers to develop pick-your-own and on-farm produce markets.
During a single season (July to October), one Arizona county
reported that the brochure and other promotional efforts
brought more than 80,000 out-of-county visitors to local farms
where they spent $1.1 million on fresh produce. This influx of
visitors increased the income of farmers and also increased tax
revenues which allowed county officials to improve public
facilities for their constituents.
--Funding provided by CSREES to the 29 1994 Land-Grant Institutions
under the Tribal Colleges Education Equity Grant Program has
been used to establish a Center for Integrated Rural
Development studies at the Navajo Community College in Arizona,
the mission of which is to design and deliver classroom,
research and extension programs in fields of community
development, economic development, and natural resources
management. In addition, Little Hoop Community College in North
Dakota is developing curricula for a program in food science to
include food preparation, nutrition, and management.
--Funding from the CSREES Capacity Building Grants Program, has
enabled Alcorn State University in Mississippi to develop new
four-year degree programs in international agribusiness and to
develop an urban forestry program at Southern University in
Louisiana. The Nation's first bachelor's degree program in
regulatory science has been developed at the University of
Arkansas at Pine Bluff.
The successes of the agriculture and forestry research, higher
education, and extension systems, which were created with the
initiation of the land-grant system in 1862, have enabled U.S.
agriculture to maintain its world-class competitive edge. This
tripartite relationship has resulted in significant improvements in
agricultural productivity, created new, improved, and value-added
products from agricultural and forestry materials, found ways to
protect our environment, improved human nutrition and health, and
increased our capacity to respond to changes. These improvements have
had a profound affect on our standard of living and will impact the
lives of future generations world-wide. The degree to which our
standard of living has been affected by these developments is reflected
in the amount we spend on food in this country compared to other
countries. In the U.S., we spend only 11 percent of disposable income
on food compared to 15-20 percent in other affluent countries in Europe
and in Japan, 35-40 percent in developing countries such as Mexico and
Thailand, and more than 50 percent in the lowest income countries such
as India and other southeast Asia countries.
The fiscal year 1998 President's Budget Request for CSREES, which
reflects the five goals of the REE Mission Area of USDA and issues of
great importance to Agriculture, will optimize the contributions of
university-based programs to sustain and enhance the agricultural
systems of this Nation and worldwide.
______
Prepared Statement of Susan E. Offutt
Mr. Chairman and members of the Committee, I am pleased to have the
opportunity to present the proposed fiscal year 1998 budget for the
Economic Research Service.
mission
The Economic Research Service provides economic and other social
science analysis on efficiency, efficacy, and equity issues related to
agriculture, food, the environment, and rural development to improve
public and private decision making.
budget
Fiscal year 1997. ERS's appropriation for fiscal year 1997 of $53.1
million was the same as the fiscal year 1996 appropriation. In response
to this static budget level, ERS continued implementation of its
streamlining strategy and plans to maintain staff at its current level
of 591 full-time equivalents. ERS will continue to make full use of
early-out and buy-out authorities. Since October 1993, the ERS staff
has been reduced by 204 full-time equivalents In the future, ERS must
continue to constrain staff levels to cope with cumulative budget cuts
of $5.8 million since fiscal year 1993 and to maintain its non-salary
program of agricultural data purchases and cooperative university
research necessary to support its analytical program.
Fiscal year 1998. The agency's request for fiscal year 1998 is
$54.3 million, an increase of $1.2 million over fiscal year 1997. The
increase consists of three parts: a $0.8 million net increase for pay
raises; $0.3 million to increase knowledge about the costs and benefits
of resource-conserving production practices, and $0.1 million to
provide statistical expertise for GPRA measurement in a governmentwide
effort to develop reliable performance information.
In 1993 the Administration announced a goal of bringing 75 percent
of the Nation's cropland under integrated pest management (IPM) within
7 years. In addition, the 1996 Federal Agriculture Improvement and
Reform Act introduced new conservation and environmental programs aimed
at encouraging the adoption of farming practices that conserve soil and
reduce nutrient and pesticide run-off. To determine how best to achieve
the Department's IPM goal and to implement the most cost-effective
conservation programs, economic analysis is needed concerning the
factors that affect the adoption of resource-saving technologies, the
farm-level cost of these practices, the effect of these practices on
output, prices, and the farm input market, and the environmental
consequences of practice adoption.
The ERS request to increase knowledge about the costs and benefits
of resource conserving production practices would be used, in part, to
improve ongoing USDA data collection efforts on a wide range of farming
practices, including livestock waste management, crop nutrient and
pesticide management, and irrigation management. The data component of
the request ($100,000), would be directed toward: (1) expanding the
number of commodities surveyed in the current program to include
specialty crops and livestock; or (2) assuring that appropriate
economic data are collected along with agronomic information; or (3)
linking practice adoption and economic data to natural resource
characteristics. The choice among these emphases will depend on an
assessment of the adequacy of existing data collection as well as the
requirements of the Department's initiative. Using an expanded
database, the proposed analysis component of the request ($181,000)
would be used to examine the practices farmers adopt, the cost of
adoption, the effect of these practices on the performance of the farm
sector, and the effectiveness of practice adoption in meeting
conservation and environmental goals. Related analysis would focus on
variation in adoption rates and costs of adoption across farm size and
type of farming operation.
A key component of the Government Performance and Results Act
(GPRA) is the mandate to assess performance relative to annually
established output and outcome goals. As the GPRA deadlines quickly
approach, agencies across the Federal Government are working to develop
performance measures and indicators. In this process, agencies are
finding that developing meaningful and useful measures and indicators
can be very difficult, and developing measures that can be compared
across agencies is even more difficult. This initiative is designed to
provide statistical support to Federal agencies across the Government
to address these challenges. Under the initiative, eight Federal
Statistical agencies will participate in a three-part effort to:
develop or refine sampling schemes to support valid performance
measurement; develop standardized questions and satisfaction scales for
common element of Federal services; and add 10 Federal agencies that
provide public services to the national American Customer Satisfaction
Index. This initiative would provide funds totaling $125,000 for the
Economic Research Service to cooperate with other Government agencies
in a $1.6 million effort to improve statistical expertise for GPRA
measurement. ERS would receive $100,000 to share primary responsibility
with the Bureau of Transportation Statistics and the Energy Information
Agency in clarifying and providing guidance on performance measurement
issues related to GPRA performance measurement. ERS would also use an
additional $25,000 to provide guidance on development of questions for
standard survey instruments. ERS' special expertise would be applied in
providing perspective and advice on bridging customer satisfaction
measurement with measuring success in meeting basic goals for the
program.
customers, partners, and stakeholders
The ultimate beneficiaries of ERS's program are the American people
whose well-being is improved by informed public and private
decisionmaking leading to more effective resource allocation. ERS
shapes its program and products principally to serve key decision
makers who routinely make or influence public policy and program
decisions. This clientele includes White House and USDA policy
officials and program administrators/managers, the U.S. Congress, other
Federal agencies and State and local government officials, and domestic
and international environmental, consumer, and other public groups,
including farm and industry groups interested in public policy issues.
ERS carries out its economic analysis and research in five
divisions and an Office of Energy and New Uses. ERS depends heavily on
working relationships with other organizations and individuals to
accomplish its mission. Key partners include: the National Agricultural
Statistics Service (NASS) for primary data collection; universities for
research collaboration; the media as disseminators of ERS analyses; and
other government agencies and departments for data information and
services.
ERS shares five general goals with its fellow agencies in the
Research, Education, and Economics mission area: a highly competitive
agricultural production system, a safe and secure food supply, a
healthy and well nourished population, harmony between agriculture and
the environment, and enhanced economic opportunity and quality of life
for all Americans. These goals are fully consistent with the U.S.
Department of Agriculture mission.
a highly competitive agricultural production system in the global
economy
ERS helps the U.S. food and agriculture sector effectively adapt to
changing market structure and post-GATT and post-NAFTA trade conditions
by providing analyses on the linkage between domestic and global food
and commodity markets and the implications of alternative domestic
policies and programs on competitiveness. ERS economists analyze
factors that drive change in the structure and performance of domestic
and global food and agriculture markets; provide economic assessments
of competitiveness and efficiency in the food industry; analyze how
global environmental change, international environmental treaties and
agreements, and agriculture-related trade restrictions affect U.S.
agricultural production, exports and imports; and provide economic
analyses that help identify competitive and environmentally sound new
crops and uses. Looking ahead, ERS will consider how the potential for
increased commodity price and farm income variability affects market
performance and interacts with Federal policies and programs. These
analyses will include short- and long-term projections of U.S. and
world agricultural production, consumption, and trade. In addition, ERS
will continue preparation for the 1999 World Trade Organization mini-
round (expected to focus on agriculture) by analyzing the economic
effects of Uruguay Round policy disciplines; assessing the economic
effects of state trading and tariff-rate quota allocations; and
assessing regional trade initiatives. In this latter category, ERS
experts will take a more in-depth look at China's evolving role in
world agricultural markets. ERS will conduct research on the changing
structure (for example, vertical integration, concentration, and
contracting) of the food marketing chain and will also analyze the
effectiveness and use of alternative marketing strategies and risk
management tools in mitigating farm income risk, including tools
available from both private and public sector providers.
ERS has initiated work on case studies to support priority-setting
for research on ways to use agricultural products, crop residues, and
co-products from agricultural processing plants as potential feedstocks
in the production of new products with enhanced value. These studies
will provide estimates of market potential, job opportunities, and the
income effects of new products and involve collaborative efforts
between ERS economists and Agricultural Research Service scientists, as
well as analysts from other Government agencies and the private sector.
More generally, ERS analyses can help guide and evaluate resource
allocation and management of public sector agricultural research, a key
to maintaining increases in productivity that underlie a strong
competitive position for U.S. farmers. ERS economists track and
endeavor to understand the determinants of public and private spending
on agricultural R&D; evaluate the returns from those expenditures; and
consider the most effective roles for public and private sector
research entities.
a safe and secure food production system
ERS focuses on improving the efficiency and effectiveness of public
policies and programs designed to protect consumers from unsafe food by
analyzing benefits of safer food and the costs of food safety policies;
efficient and cost-effective approaches to promote food safety; and how
agricultural production and processing practices affect food safety,
resource quality, and farm workers' safety. Plans are to focus on
policy alternatives for reducing the risks of food borne illness. ERS
will conduct empirical research to quantify the value placed by
consumers on reduction of health risks in food and drinking water
supplies. In collaboration with USDA's Food Safety and Inspection
Service, the Food and Drug Administration, and the Centers for Disease
Control, an interdisciplinary effort is underway to evaluate the
benefits and costs of using Hazard Analysis and Critical Control Point
(HACCP) approaches to improve food safety, with a special emphasis on
reducing health risks from Salmonella enteriditis in eggs and egg
products. Research continues to refine estimates of the human medical
costs and farm productivity losses associated with microbial pathogens
in meat and poultry.
Understanding how food prices are determined is increasingly
important in responding to domestic and international market events and
opportunities that promote the security of the U.S. food supply. As the
farm share of the food dollar declines, accurate retail price forecasts
depend more heavily on understanding the marketing system beyond the
farmgate. ERS is undertaking a systematic examination of the factors
that help set retail prices, including an assessment of the roles of
the transportation, processing, manufacturing, wholesaling and
retailing sectors, the impact of imports and exports, and linkages to
the total economy.
a healthy and well-nourished population
ERS helps identify efficient and effective public policies that
promote consumers' access to a wide variety of high-quality foods at
affordable prices. ERS economists analyze factors affecting dietary
changes; assess impacts of nutrition education and the implications for
the individual, society and agriculture; and provide economic
evaluations of food nutrition and assistance programs. The Agency plans
to study the implications for producers and consumers of movement
towards adoption of the dietary guidelines; the trends and determinants
of American's eating habits; evolution of food product trade; and the
determinants of food prices. Analysis of nutrition education efforts
will consider what kinds of information motivate changes in consumer
behavior, the food cost of healthy diets, the influence of food
assistance programs on nutrition, and the implications of healthy diets
for the structure of the food system. And, because trade in high valued
agricultural products, including processed food, now exceeds the value
of bulk commodity flows, ERS will spend more time to break down the
components of these trade flows, understand relationships to
international investment and strategic behavior of U.S. food firms; and
investigate the implications for U.S. consumers of a globalized food
marketplace.
harmony in agriculture and the environment
In this area, ERS analysis helps support development of Federal
farm, natural resource, and rural policies and programs that promote
long-term sustainability goals, improved agricultural competitiveness,
and economic growth. This effort requires analyses on the profitability
and environmental effects of alternative production management systems
and on the cost effectiveness and equity, of public sector conservation
policies and programs. ERS analysts focus on evaluating the benefits
and costs of agricultural and environmental policies and programs in
order to assess the relationship between improvements in environmental
quality and increases in agricultural competitiveness. In this vein,
ERS provides economic analyses on the linkages between biodiversity and
sustainability issues and agricultural performance, competitiveness,
and structure.
In the coming year, plans of work emphasize energy-related resource
issues, sustainability, water quality and conservation programs,
integrated pest management, and chemical use and risk reduction. In the
energy and environment area, the ERS Office of Energy and New Uses
provides departmental leadership, oversight, coordination, and
evaluation for energy and energy-related policies and programs
affecting agriculture and rural America. Its research program will
focus on energy markets and, in particular, fuel markets that affect
agriculture. ERS staff will be working jointly with analysts from the
Department of Energy and the Environmental Protection Agency in
developing a risk assessment and cost-benefit analysis of the use fuel
oxygenates, including fuel ethanol. ERS will examine the potential use
of vegetable oils, animal fats, and recycled grease as an alternative
fuel (biodiesel) for diesel engines and consider the potential effects
on farm prices, income, and food expenditures. This effort includes
work with DOE studying the life cycle of biodiesel fuels to provide
information on environmental impacts and total energy use. In an
attempt to refine understanding of the components of a sustainable
agricultural production system, ERS will build on the outcome of a 1996
agency-sponsored workshop on sustainable agriculture. The Agency's work
seeks to identify whether and what kind of economic trade-offs might be
associated with a sustainable path of development and to support
decisionmaking on public sector actions that would promote
sustainability and profitability of U.S. agriculture. In relation to
water quality and conservation programs, the goal is to evaluate and
synthesize analyses that can inform effective management of public
sector environmental quality initiatives. The output will include three
key reports: a synthesis assessing the successes and failures of the
past 20 years of USDA conservation programs; a comprehensive economic
assessment of Federal water quality programs affecting farming; and a
report on the growing use of partial interests in use rights (such as
easements) as an alternative public/private conservation tool.
ERS will continue to play its long-standing role in helping
understand chemical use in agriculture and identifying opportunities to
reduce consequent human and environmental health risks. The ERS
research program on the economics of IPM will publish the proceedings
of the Third National Integrated Pest Management Symposium Workshop--
``Designing Integrated Pest Management Programs: Putting Customers
First and Learning What Works.'' The proceedings of last winter's
conference will synthesize current understanding of IPM adoption, the
barriers to IPM adoption, and the costs and benefits of IPM. This
information can be used directly by the Department in designing
programs to meet the IPM 2000 goal of adopting IPM practices on 75
percent of the Nation's cropland by the year 2000. The product of the
Agency's work on chemical use and risk reduction will be a
comprehensive report on chemical use in agriculture. The report will
document patterns of chemical use by crop and region, the economics
driving changes in chemical formulation of pesticides and nutrients,
the economics of pest and nutrient management strategies, and the costs
and benefits of alternative policies designed to reduce the risk
associated with chemical use in agriculture. ERS will also release an
updated edition of ``Agricultural Resources and Environmental
Indicators,'' a comprehensive handbook containing data and analysis on
the trends and issues pertinent to agricultural land and water use, the
application of manufactured inputs and technology, farm productivity,
and public policies affecting resource use.
enhanced economic opportunity and quality of life for americans
The ERS contribution to improving opportunity and quality of life
in the U.S. is based on analysis that identifies how investment,
employment opportunities and job training, and demographics affect
rural America's capacity to prosper in the global marketplace. ERS
economists analyze rural financial markets and how the availability of
credit, particularly Federal credit, spending, taxes, and regulations
influence rural economic development. An assessment of the availability
of credit for agriculture, industry, and households in rural areas,
recently completed under a 1996 Act mandate, will be extended to assess
the competitiveness of rural credit markets. ERS also analyzes the
changing size and characteristics of the rural and farm populations and
the implications of these changes in human capital, including skill
development, on the performance of rural economies. In addition, ERS
studies the economic structure and performance of non-farm economic
activities in rural areas. One of the areas identified for special
attention this coming year concerns the fairly widespread rebound in
population growth in non-metropolitan counties. The relevant analysis
will involve monitoring rural earnings and labor market trends with
emphasis on regional and other disaggregations in order to provide
insight into the determinants of variation in trends among non-metro
counties. Such work should yield a better understanding of the factors
that promote rural vitality and the opportunities for effective public
sector intervention.
Because the effects of changes in welfare programs may vary between
rural and urban residents due to differences in labor markets and other
aspects of a regional economy's structure, ERS social scientists will
track implementation of recent program changes to understand any
differential impacts. In particular, ERS analysis can help anticipate
changes in participation across assistance programs, including those
for which USDA has primary responsibility, in rural housing and in
food. Another opportunity for understanding whether rural America faces
unique circumstances will come with analysis of a recently-completed
survey of the rural manufacturing sector.
ERS continues to monitor the financial situation of the farm
sector, establishing farm business organization and performance
benchmarks. This task includes study of the financial position of
farmers who employ technological advances and innovative risk
management strategies in their businesses, compared with the financial
position of farmers who use more traditional approaches. Previous work
on the use of production and marketing contracts by farmers will be
extended to identify contractors by class to better define the role of
non-farm businesses in the industrialization of farms. Analyses of
financial performance will also measure the comparability of returns
between farm and non-farm small businesses and assess the financial
viability of commercial and non-commercial size farm operations.
Complementary to its work on black and other minority farmers, ERS will
develop a profile of female farm operators in 1997 to give support to
an important but largely unreported segment of agriculture. This effort
will also contribute to the Administration's initiatives supporting the
goals of the U.N. Beijing Women's Conference.
closing remarks
I appreciate the support that his Committee has given ERS in the
past and look forward to continue working with you and your staff to
ensure that ERS makes the most effective and appropriate use of the
public resources. Thank you.
______
Prepared Statement of Donald M. Bay
Mr. Chairman and members of the Committee, I appreciate the
opportunity to submit this statement for this Committee to cover the
fiscal year 1998 budget request for the National Agricultural
Statistics Service (NASS). This Service was created in 1862 to provide
useful, timely, and unbiased statistics and other information about the
Nation's food and agricultural industry.
The structure of farming and of the agricultural industry has
changed dramatically since the initial crop reports were issued over
130 years ago. However, the need for accurate, timely, and impartial
statistical information on the Nation's agriculture has become even
more important as the Nation has moved from subsistence agriculture to
a highly industrialized agricultural industry producing food and fiber
for the world market. The crop, livestock, and other estimates
developed and published throughout the year, in cooperation with State
Departments of Agriculture, contribute significantly to the information
available on American agriculture. The State-Federal cooperative
relationship, which began nearly 80 years ago, eliminates duplication
and provides State input, while maintaining national consistency in
surveys conducted throughout the United States.
The agricultural statistics program provides information critical
to the entire food and fiber system which totals over 14 percent of the
gross domestic product and employs more than one out of every six
employees in the United States. The basic supply information provided
by NASS is of interest to producers, handlers, processors, wholesalers
and retailers of agricultural commodities.
The Nation's food industry affects the U.S. balance of trade, the
nutritional well-being of our citizens and people around the world, and
the quality of our environment. NASS estimates play an important role
in supporting this industry. Today, NASS spends about \1/25\ of a cent
per dollar of sales of raw agricultural commodities to provide the
basic impartial and unbiased statistics that underpin the United States
and world commodity markets. NASS works to ensure the quality and
integrity of its surveys in order to provide timely and accurate
agricultural statistics. These statistics are essential because they
help provide a level playing field for all engaged in the food and
fiber system and reduce market risk.
The collection of public statistics on agriculture preceded
Government commodity programs and was designed to assure
competitiveness in commodity markets. Therefore, a reduction in
spending on Government commodity programs is not expected to reduce the
need for agricultural statistics, and may actually lead to a greater
demand for accurate information as producers take their production
signals entirely from the market. Empirical evidence suggests that
increased information improves the efficiency of competitive markets. A
lack of information or inaccurate information can cause producers to
underproduce or overproduce, misuse storage, or miss foreign or
domestic market opportunities. As producers' abilities to process and
analyze data increase, so does the demand for accurate and timely
agricultural information. In addition, the increase in agricultural
product differentiation and market complexity has made many commodities
much more heterogeneous. This, in turn, has led to an increased need
for more detailed information. For example, a vast amount of U.S.
barley is sold on the basis of variety. Therefore, having data on just
total barley production is no longer sufficient to support the domestic
and growing international market for the sale of specific varieties of
barley.
NASS statistical reports are not only used by the food and fiber
industry to assess the supply and demand of agricultural commodities,
but they are also used by farm organizations and government officials
in analysis of agricultural policy, foreign trade, conservation
programs, agricultural research programs, environmental programs, rural
development, and many other activities. NASS data are examined very
closely by farmers, agribusinesses, food industry analysts, economists,
investors, as well as Federal policy makers and analysts, as decisions
are made that affect the Nation's economy.
All reports issued by NASS's Agricultural Statistics Board are made
available to the public at previously announced release times to ensure
that everyone is given equal access to the information. NASS has been a
leader among Federal agencies in providing electronic access to
information. All of NASS's national statistical reports and data
products, including graphics, are available on the Internet, as well as
in the popular book, ``1995-96 Agricultural Statistics.''
In fiscal year 1997, NASS received funding for the first time to
conduct the 1997 Census of Agriculture, By consolidating the existing
NASS survey activities with the Census of Agriculture, the two
agricultural statistics programs will be merged and the resources and
experience pooled from the two agencies, The transfer of the
responsibility for the Census of Agriculture to USDA streamlines
Federal agricultural data collection activities, improving efficiency
and the quality of data provided. The Census of Agriculture is
conducted every 5 years and the next one will be taken in 1998 for the
1997 calendar year.
Statistical research is conducted to improve methods and techniques
used in collecting and processing agricultural data. This research is
directed toward providing higher quality survey data with less burden
to respondents, producing more accurate and timely estimates to data
users, and increasing the efficiency of the entire survey process. For
example, NASS has been a leader in the research and development of
satellite imagery to improve agricultural statistics. The NASS
statistical research program strives to improve methods and techniques
for obtaining agricultural statistics with an acceptable level of
accuracy. The growing diversity and specialization of the Nation's farm
operations have greatly complicated procedures for producing accurate
agricultural statistics. Development of sophisticated sampling and
survey methodology, along with intensive use of telephone and face-to-
face contacts and computer technology enable NASS to keep pace with an
increasingly complex agricultural industry.
NASS performs a number of statistical services for other Federal,
State, and producer organizations on a cost-reimbursable basis. In
addition, NASS has an expanding international program to provide
technical assistance to a number of countries.
major activities of the national agricultural statistics service (nass)
The primary activity of NASS is to conduct surveys which include
the collection, summarization, analysis, and publication of reliable
agricultural forecasts and estimates. Farmers, ranchers, and
agribusinesses voluntarily respond to a series of nationwide surveys
about their crops, livestock, prices, and other agricultural activities
each year. Periodic surveys are conducted during the growing season to
measure the impact weather has on crop production. Frequent surveys are
also needed on food products that are perishable. Many crop surveys are
supplemented by actual field observations in which various plant counts
and measurements are made. Administrative data from other State and
USDA agencies, as well as data on imports and exports, are thoroughly
analyzed and utilized as appropriate. NASS prepares estimates for over
120 crops and 45 livestock items which are published annually in almost
400 separate reports.
Agricultural reports issued by NASS include: number of farms and
land in farms; acreage, yield, and production of grains, hay, oilseeds,
cotton, tobacco, major fruits and vegetables, floriculture, and
selected specialty crops; stocks of grains; inventories and production
of hogs, cattle, sheep and wool, goats, catfish, trout, poultry, eggs,
and dairy products; prices received by farmers for products; prices
paid by farmers for inputs and services; cold storage supplies;
agricultural labor and wage rates; agricultural chemical usage;
cultural farming practices; and other data related to the agricultural
economy.
The Census of Agriculture provides national, State, and county data
for the U.S. on the agricultural economy every five years, including:
number of farms, land use, production expenses, farm product values,
value of land and buildings, farm size and characteristics of farm
operators, market value of agricultural production sold, acreage of
major crops, inventory of livestock and poultry, and farm irrigation
practices. The Census of Agriculture is the only source for this
information on a local level which is extremely important to the
agricultural community. Detailed information at the county level help
agricultural organizations, suppliers, handlers, processors, and
wholesalers and retailers better plan their operations. Important
demographic information supplied by the Census of Agriculture also
provides a very valuable data base for developing public policy for
rural areas.
The NASS agricultural statistics program is conducted through 45
field offices servicing all 50 States. Nearly two-thirds of the
Agency's staff and resources are located in the field. All State
offices operate under cooperative funding and 25 are collocated with
State Departments of Agriculture or land-grant universities. This joint
State-Federal program helps meet State and national data needs while
minimizing overall costs, eliminating duplication of effort, and
reducing the reporting burden on farm and ranch operators. NASS's State
Statistical Offices issue approximately 9,000 reports each year.
NASS has developed a broad environmental statistics program under
the Department's water quality and food safety programs. Until 1991,
there was a complete void in the availability of reliable pesticide
usage data. This became evident during the Alar apple situation. In
cooperation with other USDA agencies, the Environmental Protection
Agency (EPA), and the Food and Drug Administration (FDA), NASS has
implemented comprehensive chemical usage surveys that collect data on
selected crops in selected States. Beginning in fiscal year 1997, NASS
began survey programs to acquire more information on Integrated Pest
Management (IPM), additional farm pesticide uses, and post-harvest
application of pesticides and other chemicals applied to commodities
after leaving the farm. These programs will result in significant new
chemical use data, which will be important additions to the existing
chemical use data base. These surveys also collect detailed economic
and farming practice information for the purpose of determining the use
of IPM practices as well as to analyze the profitability of different
levels of chemical use.
Our farms and ranches manage half the land mass in the United
States, underscoring the value of complete and accurate statistics on
chemical use and farming practices to effectively address public
concerns about the environmental effects of agricultural production.
Annual surveys are used to assess the current level of IPM adoption by
growers and in turn support research and educational efforts to assist
farmers in adoption of improved pest management practices.
NASS conducts a number of surveys and provides consulting services
for many USDA agencies and other Federal, State, and private agencies
or organizations on a cost-reimbursable basis. Consulting services
include assistance with survey methodology, questionnaire and sample
design, information resource management, and statistical analysis. NASS
has been very active in assisting USDA agencies in programs that
monitor nutrition, food safety, environmental quality, and customer
satisfaction. In cooperation with State Departments of Agriculture,
land-grant universities, and industry groups, NASS conducted 152
special surveys covering a wide range of issues such as farm injury,
nursery and horticulture, turfgrass, soybean cyst nematodes, farm
finance, fruits and nuts, popcorn, animal predator loss, and ostriches
and other exotics.
NASS provides technical assistance and training to improve
agricultural survey programs in other countries in cooperation with
other Government agencies on a cost-reimbursable basis. NASS's
international programs focus on both developing countries, such as
those in Asia, Africa, the Middle East, and Central and South America,
as well as emerging democracies in Eastern Europe. Accurate information
is essential in these countries for the orderly marketing of farm
products. NASS works directly with countries undergoing the transition
from centrally planned to market economies by assisting them in
applying modern statistical methodology, including sample survey
techniques. Short-term assignments supported work in Albania, Bulgaria,
China, Colombia, Ethiopia, India, Kazakstan, Morocco, Nicaragua,
Poland, Romania, Russia, and the Ukraine.
NASS annually seeks input on improvements and priorities from the
public through: regional data user meetings with representatives from
agribusinesses and commodity groups, special briefings for agricultural
leaders during the release of major reports, and through numerous
individual contacts. The Agency has made many adjustments to its
agricultural statistics program, published reports, and electronic
access capabilities as a result of these activities to better meet the
statistical needs of its customers.
fiscal year 1998 plans
The fiscal year 1998 budget request is for $119,877,000. This is a
net increase of $19,656,000 over fiscal year 1997.
The budget request includes an increase of $18,500,000 to fund the
1997 Census of Agriculture over the $17,500,000 that was appropriated
for fiscal year 1997, for a total of $36,000,000. Fiscal year 1998 is
the fourth and peak year of the six year funding cycle for the Census
of Agriculture. This is the year that the questionnaires are prepared,
labeled, mailed, and the data are collected, put into machine readable
format, edited, tabulated, and reviewed.
The transfer of the responsibility for the Census of Agriculture to
NASS consolidates the activities of the Census of Agriculture with the
current agricultural survey program administered by NASS. By merging
these two programs, efficiencies will be attained in building a
complete list of farm and ranch operators and reducing the reporting
burden on agricultural producers. The Census of Agriculture will
benefit from the local knowledge base that the NASS field office
infrastructure will contribute. In addition, this distributed
infrastructure will make it possible to review and summarize the
results of the Census of Agriculture in a more timely fashion, and will
reduce the reporting burden of agricultural producers who will now be
asked to report basic farm data to a single Federal agency.
NASS is realizing a decrease of $1,000,000 and 3 staff years for
list frame development and maintenance, as a result of efficiencies
gained in assuming responsibility for the Census of Agriculture. NASS
list frame development and maintenance costs will be reduced due to
efficiencies gained from NASS conducting the Census of Agriculture.
With NASS now responsible for the Census of Agriculture, list
development and maintenance costs can be reduced as progress is made
towards consolidating the two separate name and address lists of
farmers and ranchers.
This fiscal year 1998 budget request also includes an increase of
$640,000 for increased data collection costs, which is to cover higher
costs for survey interviewers who are employed under a cooperative
agreement with the National Association of State Departments of
Agriculture and whose salary increases are not covered by Federal pay
cost increases. The data collected by these interviewers form the
foundation of the NASS survey and Census of Agriculture program.
The fiscal year 1998 budget request includes an increase of
$540,000 for Government and Performance and Results Act (GPRA)
measurement, which is NASS's portion of an initiative to provide
statistical support by eight agencies to other Federal agencies across
government in the development of meaningful performance measures and
indicators.
An increase of $976,000 is requested to cover pay costs, which
consists of $310,000 for the annualization of the fiscal year 1997 pay
raise and $666,000 for the estimated fiscal year 1998 pay raise. NASS
is absorbing almost half of the combined anticipated pay raise in
fiscal year 1998 and the annualization of the fiscal year 1997 pay
raise.
______
Biographical Sketch
catherine ellen o'connor woteki, ph.d. r.d.
In June, 1996, the Secretary of Agriculture appointed Dr. Catherine
Woteki as the Acting Under Secretary for Research, Education, and
Economics. In this capacity, Dr. Woteki is responsible for the
management of four agencies: the Agricultural Research Service, the
Cooperative State Research, Education, and Extension Service; the
Economic Research Service; and the National Agricultural Statistics
Service. She leads the Administration's implementation of the 1996 farm
bill's provisions on research and education that include establishing a
new 30-member Advisory Board, implementing a competitive grants program
under the Fund for Rural America, and establishing a Research
Facilities Strategic Planning Task Force to review agriculture research
facilities and recommend a 10-year plan for modernization,
construction, consolidation, and closings.
Dr. Woteki joined the U.S. Department of Agriculture in January,
1996 as the Deputy Under Secretary for Research, Education, and
Economics. She led the development of a mission area strategic plan by
which the four REE agencies' program and budget planning is being
brought into a more disciplined, integrated program. Prior to joining
USDA, she was Deputy to the Associate Director for Science in the White
House Office of Science and Technology Policy (1994-95), and Director
of the Food and Nutrition Board, Institute of Medicine, National
Academy of Sciences (1990-94).
Dr. Woteki was born in Fort Leavenworth, Kansas, on October 7,
1947. A biology and chemistry major at Mary Washington College in
Fredericksburg, Virginia, she pursued graduate studies in human
nutrition at Virginia Polytechnic Institute and State University. For
two years, she performed clinical research in the Department of
Medicine of the University of Texas Medical School at San Antonio. She
was appointed assistant professor in the Department of Nutrition and
Food Science at Drexel University in Philadelphia in 1975. In July
1977, she joined the Congressional Office of Technology Assessment as
Nutrition Project Director. From 1980 to 1983, she worked for the U.S.
Department of Agriculture in two capacities: as leader of the Food and
Diet Appraisal Research Group in the Consumer Nutrition Center, and as
Acting Associate Administrator of the Human Nutrition Information
Service. Dr. Woteki was Deputy Director of the Division of Health
Examination Statistics, National Center for Health Statistics, U.S.
Department of Health and Human Services from 1983 to 1990.
Dr. Woteki's scholarly interests include nutritional epidemiology,
food and nutrition policy and nutrition monitoring. Dr. Woteki is the
co-editor of ``Eat for Life: The Food and Nutrition Board's Guide to
Reducing Your Risk of Chronic Disease,'' a book selected by the Book of
the Month Club. Dr. Woteki has received the Elijah White Award of the
National Center for Health Statistics, the Special Recognition Award
from the U.S. Public Health Service, and the Staff Achievement Award of
the Institute of Medicine. She was selected as the outstanding alumna
of the College of Human Resources, Virginia Polytechnic Institute and
State University, in 1987. She and her husband, Tom, reside in
Washington, DC.
Decrease in Overall Budget Request
Senator Cochran. Dr. Woteki, I notice your comments on page
4 of your statement describe in general the decrease of $49
million overall in the budget request for this mission area
under your jurisdiction.
Are all of the cuts that the administration proposes in the
CSREES portion of the budget? You mention ARS getting some
cuts. There is also a comment on page 5 that says the budget
reflects an adjustment of priorities leading to an increase of
$10 million in research and a commensurate decrease in
buildings and facilities improvement funds, so the only area of
the budget it appears to me that comes in for substantial cuts
is the CSREES portion of the budget. Is that correct?
Dr. Woteki. The biggest cuts are in buildings and
facilities grants within CSREES, which is approximately $60
million.
We have made some adjustments within ARS of priorities that
have permitted us to put some additional funding into high-
priority research areas, and that also have led to decisions
about closures on four facilities sites that would represent
substantial savings to be put back into the research
priorities, so those are the major changes that we have made.
Senator Cochran. With respect to the supplemental, I
appreciate your comments on the House action which would reduce
by $20 million the Fund for Rural America to offset some of the
additional spending in the bill.
Did you notice also, and do you have a reaction to the
inclusion in that bill of the Supplemental Nutrition Program
for Women, Infants, and Children as eligible for funding
through the Fund for Rural America?
Dr. Woteki. Yes.
Senator Cochran. What is your reaction to that?
Dr. Woteki. Well, it is certainly a great expansion beyond
what I read as being the intent for the Fund for Rural America
to allow or permit funding of the WIC program directly from
that fund. I think it dilutes the original intent of it.
Senator Cochran. We will be taking that up very soon in our
committee and having your comments about that will be helpful
to us.
I am going to yield to my colleagues for any questions they
might have, and I will resume my questioning of the witnesses
later.
Senator Burns.
Children, Youth, and Families at Risk
Senator Burns. I have just one question, doctor. Tell me
about the children and families at risk program. Who can
explain that program to me?
Dr. Woteki. I am going to ask that Dr. Robinson, who is
Administrator of CSREES, provide you with some background about
the program.
Senator Burns. You guys have got so many letters and
figures down there I do not know what they all stand for.
I had breakfast at the Pentagon this morning and got lost
three times before I got out of there. I think the Agriculture
Department is getting about the same.
Dr. Robinson. It is that time. Even with the acronym for
the name of this agency one can get lost in it. I have been
there for a year and still can.
Perhaps I could respond generally to your question about
the purpose of the Children, Youth, and Families at Risk
Program. That program has been funded for a number of years,
and the increase of $2.1 million proposed for fiscal year 1998
increases it above the 1995 level.
Senator Burns. What is that level?
Dr. Robinson. The 1995 level was $10 million. It is $11.7
million, but of that $1.7 million is targeted for 1890
institutions.
The reason for that is as follows. Up until the 1996
reauthorization of the research, extension, and education
title, 1890's were not eligible for funds under this funding
line for children, youth, and families at risk, and it was felt
that a lot of these institutions deal specifically with those
problems at risk in the rural communities.
Senator Burns. Give me an example.
Dr. Robinson. It deals with things like making sure that
there are programs through 4-H or through other youth activity
programs to support youth, to educate youth, to provide
alternatives to youth to the kinds of problems that they are
involving themselves in.
It also involves in many cases joint work with the
Department of Justice or with the Department of Health and
Human Services programs in local communities to try to deal
with youth crime, youth pregnancies, to try to deal with the
whole array of problems that young people are facing now, and
it is one of the places where actually there are partnerships
that are developing between rural leadership and extension and
the Children, Youth, and Families at Risk Program, and programs
that are also in local communities, or State programs through
Justice or Health and Human Services.
But it is addressed very much to the at-risk elements
people face in growing up either in rural areas or small towns.
Senator Burns. It just sounds like to me we have got quite
a lot of redundancy here. I mean, you are trying to do the same
thing as Health and Human Services are doing.
Dr. Robinson. Actually, we are trying very hard to make
sure that we have complementary programs that are reaching
beyond the programs that Health and Human Services have and
reaching both groups of people and groups of problems that
their programs do not reach.
That is one of the reasons to try to form partnerships with
Health and Human Services, because a lot of the youth problems
in many of the rural areas were not being addressed by existing
programs, and that was the reason for instituting this line to
begin with, and I do not recall the date that it was put into
effect, but it has been in effect for several years.
Senator Burns. I am pretty familiar with WIC and what it
does because I have got county government experience, but it is
little programs like this that, say, take $8 or $9 million
here, or $8 or $9 million there, and pretty soon we have eaten
up a budget, and basically it is make-work for the people in
the Department rather than any good that they are doing for
youth or families or anything else because of the redundancy
involved because everybody is tripping over everybody else out
there trying to show that they have compassion and we do not
get anything done.
So there might be some redundancy there. That is the reason
I asked you what the program does specifically. I have never
run into this.
I remember when I was a county commissioner--of course, a
lot of water has gone down the crick, except to Grand Forks. It
is not going down the crick too quick there, but I just think
there is some redundancy here of one Department with another.
Dr. Robinson. Perhaps I can answer a couple of the
questions you posed. My colleague just told me that this
program has been funded since 1991, and the figure in 1997 is
$9.5 million.
Two other programs that might be of interest to you are
after school care and 4-H Club work and some summer fun
experiences for children who do not understand farming
activities, so it is a rather diverse program, and it is really
geared to the needs of the local area where extension is
located, not to a national program that says do these five
things, but rather, what are the needs that are locally
identified by local constituencies that are not being served,
Senator, by the other programs, and once those are identified
to try to address the small amount of resources nationwide
specifically to those locally identified issues.
Senator Burns. Who administers it at the local level?
Dr. Robinson. It is administered through the State
extension services and through the local county agents.
Senator Burns. OK. That is all the questions I have.
Thank you very much, Mr. Chairman.
Senator Cochran. Senator Bumpers.
Senator Bumpers. Thank you, Mr. Chairman.
Dr. Horn--maybe I should ask you, Secretary Woteki, you
state in your statement that ARS is moving ahead with a
strategic planning task force mandated by the 1996 farm bill to
determine which, if any, ARS facilities should be closed, and
yet in your budget you propose to close four facilities. Why
would you propose that before your task force study is
completed?
Strategic Planning Task Force
Dr. Woteki. Well, as I indicated in my opening statement,
Senator, we have also had to make some very hard decisions
based on program priorities.
We have taken as a principle that we are not proposing
major new construction either within ARS or facilities to be
placed on university campuses, except for those that have been
very high priority within ARS, and that those three facilities
that are included in our budget request represent very
longstanding high-priority construction projects within the
ARS.
My sense, though, is that given we are in a very tight
budget climate at this point in time, given that we do have to
be responsive to shifting priorities and shifting needs from
the agricultural sector, and given that we do not have
expectations of major new increases in funding in agriculture
research, we have to make some very hard programmatic decisions
based on the quality of the research that is being done as well
as its relevancy to those current needs.
Based on those decisions, and a quality review and program
review that was done in the Agricultural Research Service, we
came to the conclusion that it was appropriate at this time to
recommend closure of two work sites and two laboratories.
Now, this task force that was required in the farm bill
last year, and for which the Secretary has just recently
announced the membership, is tasked with making a strategic
plan with a 10-year time horizon on it.
They have 2 years in which to do their work, and they will
have their first meeting, in fact, next month to actually begin
their work. But given, again, the very tight budget situation,
our sense is that we are going to have to continue to make some
decisions based on the merits of the work that is being done in
ARS's facilities, and we cannot suspend all of those decisions
for 2 years while we wait for the task force to complete its
work.
Senator Bumpers. Mr. Chairman, I ask unanimous consent that
before I forget it I be permitted to submit a few written
questions on behalf of Senator Dorgan, who is not a member of
the subcommittee, but is a member of the full committee.
Senator Cochran. Without objection, it is so ordered.
Senator Bumpers. Dr. Horn, you know, since the memory of
man runneth not, we have been in these fights about competitive
research grants as opposed to the grants that Senator Cochran
and I like. I would just like to reiterate my thinking about
that by reviewing some of the past history.
For example, when you look at the increase in aquaculture
farming in this country, double from 300-and-something million
pounds a year to over 700 million pounds a year since 1980, and
the rice germplasm center in Stuttgart is almost finished--and
in that connection I had to fight like a saber-toothed tiger to
get the rice germplasm center put in Stuttgart, AR, where about
43 percent of the rice in this country is grown, because it was
going to go to Idaho, which did not have one single rice plant,
simply because they had another germplasm center out there.
Now, I know that in this day of rapid communications maybe
it does not make a lot of difference where it is put, but to
put a rice germplasm center in a place in Idaho which does not
grow any rice at all, as opposed to putting it in a perfectly
legitimate place where 43 percent of the Nation's rice crop is
grown made no sense.
And I think about the poultry center of excellence, which
will become and is becoming one of the greatest scientific
centers on increased production, safety, and everything of
poultry--I will not belabor the point, but Dr. Horn was just
down at Boonville, AR, at the Dale Bumpers Small Farm Research
Center and saw for himself the kind of really magnificent work
that research center is doing.
So let me just say, Dr. Horn,I do not know which side of
this issue or whether you are on either side or not, but would
you comment on that?
Appropriate Mechanism for Funding Agricultural Research
Dr. Horn. I am not sure I exactly have the issue, but I
think if the issue relates to the portfolio of funding
mechanisms, I am firmly on the side of a mixture. We do have
some requirements for rapid responses to emergencies, and
directed research, merit reviewed research programs that I
think can be and have been just as good as any other kind.
On the other hand, I do think there is a need to attract
the larger science community to do some cutting edge work on
fundamental research programs that can feed into agriculture
and help us in the long run.
I also think that we have benefited from the opportunity to
specifically address questions in specific parts of the country
where the work is most appropriate through the use of special
grants over the years, and so I think my answer to that
question would be, we need a mix of funding mechanisms, and
each has proven very, very valuable to us.
Senator Bumpers. As far as I am concerned that is a good
answer. I could not agree with you more. There are perhaps some
research projects that necessarily have to go on a competitive
basis because there is some really giant research institution
that could do it. We all admit they could probably do it
better. They are equipped to do it better.
But when you think about Mississippi and Arkansas, and
Mississippi is considerably bigger than we are in aquaculture,
but when you look at the unbelievable increase in production
which has occurred because of research--it has occurred some
because of the expansion of farming itself, but a lot of it has
occurred--if you look at the per acre yield, you will find it
is up about fourfold in the last 20 years, all of that by
research, and when you consider the fact that we are still
tenth in the world in seafood production, and it is still the
only thing that even holds out--we are still a net importer of
fish and aquaculture products.
It contributes I do not know how many billion, a few
billion dollars to the deficit every year, and here Senator
Cochran and I are just busting to close that gap, and we think
a lot of it can be closed by good research, so I just wanted to
get that on the record and say that we will continue to fight
for legitimate projects that could go to our respective States.
After all, this Nation is supposed to serve everybody, not just
a few prestigious institutions.
Dr. Woteki.
Reauthorization of the Research title of the Farm Bill
Dr. Woteki. Senator, you have actually touched on some very
fundamental issues with respect to the way that agricultural
research is funded in this country and how we make our
decisions about siting of different facilities.
As you are well aware, the research title was reauthorized
last year in the farm bill for only 2 years, and that both the
Senate and the House Agriculture Committees will be taking up
this year reauthorizing legislation for the research programs
within the Department.
Senator Lugar posed to us some very, very interesting
questions about what would be the most appropriate mechanisms
for funding agricultural research now and for the future. In
response to those questions, the Secretary sent a letter back
to the Senator which I would be happy to share with you that
kind of lays out a number of principles that we believe should
be the basis for the discussion on the research title
reauthorization. It touches on many of these same issues, and
we would be happy to share that letter with you as well.
Senator Bumpers. I would appreciate that.
[The information follows:]
Letter From Dan Glickman
Department of Agriculture,
Office of the Secretary,
Washington, DC, March 12, 1997.
Hon. Richard Lugar,
U.S. Senate, Senate Committee on Agriculture, Nutrition, and Forestry,
Russell Senate Office Building, Washington, DC.
Dear Mr. Chairman: I am writing in response to your letter of
January 10, 1997. This letter responds to both your letter to me and
Dr. Catherine E. Woteki, Acting Under Secretary, Research, Education
and Economics. We appreciate your commitment to the future of the
agricultural knowledge system, which is comprised of research,
education, and extension programs. We welcome the opportunity to
discuss the future of these programs within the Department of
Agriculture (USDA) and with our partners, and we look forward to
working with you and members of the Senate Agriculture, Nutrition, and
Forestry Committee in preparation for reauthorization of these programs
in 1997.
Federally funded agricultural research, education, and extension
are conducted in pursuit of national goals, such as world food
security, better health, wise use of natural resources, and greater
economic security for agricultural producers. Attaining these goals is
challenging given deregulated domestic and foreign markets and economic
projections that world food demand will double in the next 30 years.
Innovation in the agricultural sector to meet our national goals
depends in part upon Federal investment in research, technology
transfer, and the education of future scientists and producers.
Although the Federal contribution is 25 percent of national
agricultural research and development (R&D) expenditures, we believe
that it plays a critical role.
The questions posed in your letter recognize these challenges and
provide a thought-provoking starting point for our discussion about the
future. This letter provides the Administration's fundamental
principles guiding our thinking as we address these issues critical to
success of the agricultural sector in the next century. We look forward
to continued dialogue with the Committee and plan to provide a detailed
legislative proposal to you later this spring.
1. USDA and the Research, Education and Economics mission area \1\
within it invest in creating and strengthening the research and
educational capacity essential to meeting national goals for
the food and agricultural system.
---------------------------------------------------------------------------
\1\ The Research, Education, and Economics mission area is
comprised of four agencies: the Agricultural Research Service, the
Cooperative State Research, Education, and Extension Service, the
Economic Research Service, and the National Agricultural Statistics
Service.
---------------------------------------------------------------------------
Scientific knowledge is necessary for helping us achieve our broad
national goals of improved health, environment, prosperity, national
security, and quality of life. Equally important are educational
institutions and government programs, such as Extension, that promote
the dissemination of knowledge and technologies. Accelerating the
development of technologies is critical to sustaining our nation's
long-term economic growth and for increasing agricultural productivity
while reducing its environmental impact.
Past investment in the research, education, and extension system is
broadly believed to be responsible for providing substantial economic
advantages to American producers and consumers and simultaneously
contributing to food safety and improved health. While agricultural
production employs less than 2 percent of the population, the food and
agricultural sectors account for 16 percent of jobs. Agricultural
exports are a significant player in decreasing the nation's trade
deficit. This contribution depends on our constant attention to new
challenges that emerge in the form of new pests and diseases that
threaten our production capacity, of new organisms or more virulent
strains of organisms that challenge our food safety system, and of new
competitors around the globe who vie for the markets upon which the
prosperity of farmers, ranchers, rural Americans, and all those who
participate in the agricultural sector depends.
The Research, Education, and Economics (REE) mission area is
focusing our research, education, and extension efforts toward
attaining 5 general goals for the nation's food and agricultural
system. They are:
(1) An agricultural system that is highly competitive in the global
economy,
(2) A safe and secure food and fiber system,
(3) A healthy, well-nourished population,
(4) Greater harmony between agriculture and the environment, and
(5) Enhanced economic opportunity and quality of life for
Americans.
These goals were derived from purposes of agricultural research
defined by Congress in the 1990 FACT Act and the 1996 Farm Bill as well
as from input from numerous listening sessions and consultations with
stakeholders, including our REE Advisory Committee.
2. The programs of the REE mission are dedicated to maintaining world
leadership and excellence in agricultural science and
education.
Scientists working at the leading edge in the food and agricultural
sciences are essential to maintain and improve our competitive position
for U.S. agriculture. U.S. scientists must continue to make a
significant share of scientific advances and to capitalize on new
discoveries that are made abroad. By maintaining a tradition of
scientific excellence, the nation will be better positioned to educate
the scientific and technical work force required by our economy. To
sustain U.S. leadership in the world and strengthen participation in
collaborative scientific and educational endeavors, we must increase
our level of interaction with colleagues in other countries.
World leadership is also maintained by funding the best scientific
endeavors and the best people to conduct research, education, and
extension activities. As a result, the Administration supports
increasing the proportion of the portfolio of Federal agricultural
research that is awarded by merit review with peer evaluation. This
support is evidenced in the President's budget proposal for the
Department of Agriculture, which calls for significant increases in
appropriations for the National Research Initiative and other
competitively awarded grant programs. The Administration also supports
and encourages integrated problem solving, as demonstrated by our
design of the Fund for Rural America competitive grant program. The
challenges of today and the future are more complex than those we have
solved in the past and require multi-functional, multi-disciplinary,
multi-institutional approaches to problems. As a result, the research,
education, and extension system must build on proven successes and
adapt to future challenges. Well educated scientists and citizens are
the well spring of new ideas and new solutions to challenging problems.
America will need a scientifically literate society to face the
challenges of the 21st Century. Higher education programs of diverse
institutions as well as nonformal education provided by Extension are
critical to achieving this literacy.
We will sustain this excellence only by engaging the talents of our
diverse population. A responsive research, education, and extension
system is comprised of people with a variety of experiences and
perspectives, providing the necessary insight for problem solving. We
must improve our educational and extension systems to give children and
adults a greater understanding and appreciation of the food and
agricultural sciences, thereby better informing their decisions and
understanding.
3. The Federal government has a distinct role to play in partnership
with state and local governments and the private sector.
Federal investment in research, education, and extension is
necessary despite significant state and private sector investments.
Economically, while state funded research benefits that state's
producers and consumers, some portion ``spills over'' to consumers and
producers in other states. If a state considers only the benefits of
its research to its own producers and consumers, it would tend to
invest less than would be optimal from a national perspective. This is
similar to the case of a private firm under investing in research
because it cannot capture all the returns, such as research on food
safety, diet, health, and the environment, where private or state
investments are low but social payoffs are high. In addition, states
will tend to favor applied research and technology development at the
expense of more basic or pre-technology research, since the former is
likely to have more direct state benefit.
A second unique role for the Federal government is that of
providing in-house scientific expertise, which is essential for
national and international leadership and coordination in agricultural
science and education. The effectiveness of the State system depends on
regional and interregional coordination and linkages provided through
national program leadership in USDA.
Consistent with the Administration's philosophy that state, local,
and tribal governments have strong roles in governance, the
Administration values an active federal-state-local partnership in
setting research, education, and extension priorities, in conducting
the work, and in evaluating the results. The Administration supports
efforts such as:
--stronger integration with the broader science community (to the
benefit of applications and advances in food and agricultural
sciences);
--increasing responsiveness to the needs of today's and tomorrow's
constituents;
--institutional arrangements that enhance efficiencies and reduce
duplication within the national system, as well as effectively
address regional and multi-state issues.
The Administration also values public sector-private sector
partnerships as another means of leveraging scarce federal dollars.
USDA currently focuses on two tools to bridge between public research
and private economic opportunity. First, the 1986 Technology Transfer
Act permits Federal laboratories to enter into Cooperative Research and
Development Agreements (CRADA's) with universities, private companies,
non-Federal government entities, and others. CRADA activity at USDA has
increased rapidly since the program was first instituted in 1987.
Between 1987 and the present, USDA has entered into over 650 CRADA's
with private firms. Second, the Small Business Innovation Research
Program, established in 1982, has been implemented at 11 Federal
departments including USDA. In 1996, the USDA program will exceed $10
million. Awards are made for initial exploration as well as
precommercialization of research findings applicable to solving
agricultural problems, including rural development.
Effectively meeting national goals requires a system of customer
input, evaluation, and assessment. To ensure responsiveness to the
public in meeting these goals, the Administration supports broad
stakeholder access to priority setting processes and transparency in
those processes. Two mechanisms currently used by the REE mission area
are advisory bodies and the Government Performance and Results Act
(GPRA).
Input from advisory bodies should always inform Federal government
action, whether formally provided by the recently appointed National
Agricultural Research, Extension, Education, and Economics Advisory
Board (Advisory Board) or through informal interactions with
stakeholders at the national, state and local level. Since being
authorized, the Advisory Board has had one meeting and will have its
second meeting this month. The Advisory Board has provided the
Secretary of Agriculture with advice on implementation of the Fund for
Rural America, the composition of the Strategic Planning Task Force to
review research facilities, and is considering recommendations on REE
strategic plans and the reauthorization of the research title of the
1996 Farm Bill. We expect that the Advisory Board, over time, will more
clearly define its role and, as Congress intended, will become an
effective clearing house for numerous other advisory systems from the
national, State and local levels.
Second, the Advisory Board will also be an integral part of the
process of program review related to the implementation of the
Government Performance and Results Act (GPRA). In response to GPRA, the
REE mission area and agencies have developed a set of draft strategic
plans, on which we look forward to consulting with you and the
Committee, and we are in the process of developing performance plans.
In the development of performance plans for research, education, and
extension activities, we are considering adopting a combination of
quantitative and qualitative measures. These techniques will be used to
assess the quality, relevance, and timeliness of our research and
education efforts. Adapted to the research, education, and extension
context, we believe GPRA will serve us well, allowing us not only to
conduct programs more effectively but also to be able to more
accurately describe the value of those programs to society.
4. Wise strategy for public investment supports a diversified portfolio
offending sources and mechanisms as well as diverse
institutions performing research, education and extension.
The diverse portfolio consists of multiple funding sources and
funding mechanisms as well as a diversity of institutions and
performers. Our portfolio currently contains extramural funding in the
form of formula funds, special grants, and competitive grants in
addition to intramural funding. The Administration also recognizes that
diversity among the institutions performing research, education, and
extension is critical to ensuring that national goals are effectively
met. A diversity of performers fosters creativity and innovation. It
increases the number of perspectives on a problem, enriches competition
among proposals, and induces competition to support the best work among
Sunders, both public and private. Diverse funding alternatives give
original ideas a better chance to find support than a more centralized
system. As a result, a diverse system enhances quality of output and
strengthens national capacity to respond to new opportunities and
changing national needs.
The Administration supports USDA's mix of extramural programs in
research, education, and extension, and is a proponent that formula or
base program awards should allow and support maximum flexibility for
states to use resources where they have the greatest ability to solve
problems. The Administration also supports a strong Federal role in
leveraging resources, and recent program efforts have emphasized multi-
State, multi-institutional collaborations. Strengthening current
mechanisms, such as the regional research program, which requires 25
percent of Hatch funds be used for multi-State efforts, and proposed
mechanisms, such as set-asides for cross institutional extension,
support this effort. Accountability to shared regional and national
goals is also critical to this effort. As has been consistent for many
years, the Administration does not support state-specific or commodity-
specific special grants. The Administration does support mechanisms for
multi-state research projects addressing problems of national or
regional importance, such as water quality and integrated pest
management. Wherever appropriate, the Administration supports
nonfederal matching requirements to encourage maximum leverage of
federal dollars.
The Administration also supports a balanced portfolio of intramural
and extramural research. USDA relies on the REE agencies to provide the
science base to fulfill its mission, and we have a historical
commitment to strengthening university-based research and higher
education. We look to the intramural agencies--the Agricultural
Research Service (ARS), the Economic Research Service (ERS), and the
National Agricultural Statistics Service (NASS)--as the primary
performers of mission-oriented, problem-solving research and for the
generation of statistical data important to program and policy
decisions. The university-based scientists supported by CSREES produce
a mixture of basic, applied, and developmental research that is key to
American agriculture's future. Simultaneously, it disseminates new
knowledge and new technology, and it trains the next generation of
scientists and engineers.
Determining what constitutes an appropriate balance depends on the
ultimate goals desired from the Federal investment. In past years, when
budgets could be expected to grow every year, the question of
appropriate balance between the intramural and extramural parts of the
portfolio was not a major issue. With the prospect that the
agricultural research budget will remain flat for the foreseeable
future, it is of growing significance. The Administration has already
expressed its preference for increases in university-based,
competitive, merit-reviewed research to ensure that the Nation receives
the highest quality return on its investment while maximizing the ties
between research and higher education. The President's budget requests
have consistently reflected this position. At present, we have little
in the way of program evaluation to guide an assessment of the optimal
proportions of extramural and intramural effort, but we look to GPRA as
a way to introduce greater rigor into this much-needed analysis.
Intramural research conducted by the ARS addresses critical
national issues requiring long-term commitments and specialized
facilities, supports the research needs of action and regulatory
agencies, and provides research required to support national or
international policies and to meet international standards and
certifications. This research is subject to an internal peer review
process, which is currently under review. ARS research provides a
critical resource base so USDA can rapidly respond to new problems and
emergencies as they arise and supports long-term, high-risk research,
in which the private sector is not likely to invest.
Federal laboratories contribute to our science and technology base
in support of national goals and are an important part of our national
science investment and infrastructure. It is a resource that must be
continually renewed and renovated. Given the government-wide
constraints on discretionary program funding and the priority this
Administration places on strengthening support for research funding,
careful consideration of the design of an infrastructure and its
renewal is critical. We expect the Strategic Planning Task Force
authorized in the 1996 Farm Bill to put forward significant
recommendations regarding the best and most efficient use of future
Federal investments in public agricultural research facilities.
Federal funds are currently distributed to the 1862, 1890, 1994,
and Hispanic-serving institutions. In September 1996, President Clinton
announced a Presidential Review Directive (PRD) to examine university-
government partnerships. In cooperation with the National Association
of State Universities and Land Grant Colleges (NASULGC), REE has begun
to evaluate these partnerships. This will be a wide-ranging review,
which we anticipate will be completed by late Fall 1997, containing
recommendations that may be implemented using existing administrative
authority. We will keep the Committee informed of our progress.
Mr. Chairman, Federal investment in research, education, and
extension for the achievement of national goals has never been more
critical to the success of the agricultural sector. While our system
has served us well, clearly it is time to assess current programs,
policies, and funding mechanisms to ensure those national goals are
effectively met. The appendix accompanying this letter provides you
with salient facts about the Nation's agriculture research and
development, education and extension system. We expect to communicate
to you our specific proposals for administrative and legislative change
at the earliest opportunity. We look forward to the coming important
debate about the future of the research, education, and extension
system, and we look forward to working with you and members of the
committee to strengthen the capacity of the research, education, and
extension system.
Sincerely
Dan Glickman,
Secretary.
______
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Letter from Senator Lugar
U.S. Senate,
Committee on Agriculture, Nutrition, and Forestry,
Washington, DC, January 10, 1997.
Hon. Dan Glickman,
Secretary, U.S. Department of Agriculture,
Washington, DC.
Dear Secretary Glickman: Research is vital to the future of
agriculture. As you know, agricultural research, extension and
education programs must be reauthorized by Congress in 1997. In
preparation for review of the current programs and structure, I have
prepared a list of questions for consideration. These questions will
serve as the basis for a thorough and thoughtful review of the current
research system structure, funding mechanisms, coordination, priority
setting, and accountability. It is my hope that these questions will be
given serious consideration. Your answers and views will be helpful as
we formulate legislation to reauthorize these important programs.
I will appreciate your review of these questions and would value
your answers to as many as you feel able to address. I would appreciate
hearing back from you by March 14. Please feel free to share these
questions with others who have an interest in agricultural research,
extension and education. I look forward to hearing from you soon.
Sincerely,
Richard G. Lugar,
Chairman.
______
Agricultural Research, Extension and Education
Questions for Consideration for 1997 Reauthorization
research system structure
If the U.S. agricultural research, education, and extension system
was created today, how would it be structured to maximize the social
rate of return on federal funds committed to the system? How would such
a system compare to the current system, which traces its roots back to
the Morrill Act of 1862?
USDA's research budget for in-house research is more than twice the
average for all government agencies. What type of research should be
conducted in-house by ARS and what research can be done as well and
more cost effectively by nonfederal institutions?
Is there a need for a college of agriculture in every state or
should there be a greater effort to regionalize agricultural research
(such as develop regional centers of excellence that link researchers
from various states to work on research of regional importance)? What
would be the impact of such a change on states with smaller colleges of
agriculture that may end up closing or losing resources?
How should the more than 100 ARS laboratories be consolidated to
increase efficiencies, reduce duplication with land grant research, and
maintain the ``critical mass'' of scientists and equipment needed to
ensure quality science?
Should limited federal funds be spent to construct research
facilities at and for land grant and other universities?
How should our research system structure and delivery be changed to
be prepared to meet the challenges of the agriculture sector in the
next century?
funding mechanisms and issues
In federal funding of agricultural research, what would be the
ideal allocation of funds for basic and applied research? What has
historically been the allocation and what is it today?
Federally funded agricultural research is allocated among
intramural funds, formula funds, competitive grants, and special
grants. Are these the most effective methods of allocating funds? If
not, what is a more effective method? If they are, what is the proper
balance between intramural funds, formula funds, competitive grants,
and special grants?
Should receipt by land grant universities of federally-funded
agricultural research and extension funds be contingent on their
ability to demonstrate that a wide variety of stakeholders have
dedicated to public goods in which the private sector is unlikely to
invest?
What percentage of ag research funding is attributable to non-
competitive funding sources, including special grants? What is the
corresponding percentage for other major federal research entities
including NIH, NSF, NASA, etc.? If there are significant differences,
why do they exist?
The U.S. Department of Agriculture (USDA) differs from other
federal agencies that support science in that the majority of
agricultural research--more than 60 percent--is done in-house, by the
Agriculture Research Service (ARS). (Other major federal research
agencies, such as the National Institutes of Health and National
Science Foundation, award more than 80 percent of their research funds
competitively to scientists at a wide range of extramural
laboratories.) What would be the costs and benefits of initiating a
transition to a more NIH-like approach (with competitive grants as the
main delivery system of federal funding) to federal agricultural
research? Would this approach provide greater public return on the
investment?
There is widespread support for increasing the percentage of
federal agricultural research funding that is awarded competitively, as
well as increasing the amount of dollars available for such grants.
Assuming continued fiscal constraints, the options for meeting this
demand are 1) to use savings stemming from changes in mandatory
spending programs; 2) to redirect a portion of formula funds and
special research grants to the current competitive grants program; or
3) to redirect a portion of ARS funding to this purpose. What would be
the costs and benefits of implementing any one or a combination of
these approaches?
Should the formulas by which food and agricultural research and
extension funds are allocated within the land grant system be revised
to better reflect changing state demographics and the increasingly
diverse food and agricultural research community? Are these formulas
appropriate for the research and extension needs of the 1990's and
beyond? Would a regionally based (rather than state) formula approach
better serve or provide a greater return to agriculture? What impact
would changes in these formulas have on land grant universities?
How do smaller universities fare in the competitive grant process?
Is it appropriate for the federal government to ``set aside'' a portion
of the grant for these smaller universities?
extension service issues
In the absence of federal funds for the Extension Service, would
states and localities continue to provide the service? Could the
federal funding role be replaced with a memorandum of agreement elicit
increased state or private funding for agricultural research?
coordination and priority setting process
Are there overlapping missions and duplication of effort between
federally conducted research and research conducted by universities and
the private sector? Is there duplication with research funded through
research and promotion programs (check-offs)? How can the mission and
focus of USDA's and land grant universities' agricultural research
program be more clearly defined to better complement one another and
avoid unnecessary duplication?
Since the private sector accounts for the preponderance of total
agricultural research spending, what processes exist to ensure that
public research does not unnecessarily duplicate efforts already
underway among private researchers? If no or few processes exist, is it
desirable to develop them? If so, how could they be reconciled with the
need to protect confidential business information?
What is the best process to use to set priorities for research,
extension and education? Should additional guidance be given to the
newly authorized National Agricultural Research, Extension, Education
and Economics Board regarding how it is to function? What priority
setting process should be used to ensure that recommendations reflect
the needs of those who benefit from and utilize agricultural research
conducted by or funded by the federal government? Is it important to
evaluate whether priorities have been followed when research funds have
been awarded?
accountability
What is the American public getting for its $1.8 billion annual
investment in agricultural research? I For example, how much funding
goes to scientists versus administration and facilities, how many USDA
and land grant universities are doing research in similar areas, and
how many prestigious scientific awards for agricultural research go to
USDA, university and private sector scientists respectively.) What is
the best criteria to Judge whether the federal government is getting
the most for its agricultural research dollars?
With growing accountability in government (for example, GPRA), how
should federally-funded agricultural research results be measured and
their impacts evaluated? Is there a body of science that can be used to
measure research results and impacts? If so, is it currently being
used?
Children's Hospital Nutrition Center
Senator Bumpers. When I first came here Bill Proxmire was
the keeper of research money, and he came down 180 degrees. I
voted against him every time I got a chance, because he always
wanted everything to go on a competitive basis, which meant MIT
and Harvard, and Stanford, and Cal Tech, and places like that,
and other places who are capable of doing an awful lot of
research never got considered because they did not have
prestige and certainly they did not have the reputation some of
these others did.
As I say, the proof is in the pudding. If you go look at
some of these research centers that some of us on this
committee have fought to get for our States you will find they
are doing really excellent work.
Which brings me, Dr. Horn, to the nutrition center at
Children's Hospital. I understand you visited that, is that
correct?
Dr. Horn. I have been to that center and the other several
times, including the one that I am sorry to say has got a
basement full of water this week at Grand Forks, ND.
Senator Bumpers. There are six of those in the country.
Dr. Horn. That is correct. That is a very important program
for us. You will note in the President's budget request that we
have a human nutrition initiative which, although it does not
say it, is intended to make stronger the linkage between
agriculture and human nutrition.
A good bit of the research that would be done under the
auspices of that increase is to identify phytoactive compounds
in foods that, in fact, can promote health and prevent disease.
USDA, of course, has the mandate to do nutrition work on
behalf of healthy Americans as opposed to sick ones, and our
intent is to develop a program that will prevent illness
through this initiative.
The time is right. There are new technologies available to
us that allow us, we think, to make some major breakthroughs in
health care and prevention, and we are hopeful that this will
be a real shot in the arm for those six centers.
Senator Bumpers. Incidentally, Dr. Horn, I want to come
back to nutrition in just a moment, but did you know that the
rice-growing States are now producing more and more rice for
Japan? It is a species developed by the Japanese, but we are
growing it, and growing it very successfully, and we are
exporting it to Japan. Are you familiar with that?
Dr. Horn. Yes; I am. In fact, one of the great achievements
of the Department is to open up that market. And although I
would say that U.S. long grain rice has always been world class
standard, this rice that we are growing for Japan is a major
addition for our international trade.
Senator Bumpers. Our farmers love it because they get more
for it than they do on the domestic market.
Dr. Horn. Yes, they do.
Senator Bumpers. Back to nutrition. Mr. Chairman, I will
yield. I just want to make this point. For those of us who have
had chest pains in our life and still go for stress tests, the
question is always first are you working out? Answer, yes. And
what is your dietary habits, and so we go through that.
Now, that is an adult question, and I am talking about
really the pediatric nutrition center at Children's Hospital in
Little Rock, but I can tell you that so many of the health
problems in this country, an unbelievable number of the amount
of health costs in this country is directly related to poor
nutrition.
I watched--you know, I have watched the Children's Hospital
and Medical Center wrestle with these nutrition problems for a
long time, and we have done quite a bit of research, but we
still really--I consider that to almost be in its infancy,
because we still do not really know--we know fat is bad for
you, but we do not know how much of it, where the threshold
changes, and when it comes to infants, you know, you saw the
conference over at the White House the other day where the
first 3 years of a child's life is absolutely critical to the
very life of that child, and a large part of that deals with
nutrition.
Now, we learned a long time ago that a good protein diet
during the fetal period as well as during the neonatal period--
we learned a long time ago that protein builds brain cells, and
if you do not have a decent protein diet for both the fetus and
the infant, that child's brain is not going to develop right.
That is the reason we started the WIC Program, to make sure
that poor pregnant women get a decent diet, get a good protein
diet.
And I must say, we had all these people come and testify
the other day for another subcommittee on appropriations. Rob
Reiner, who has a program of his own--but in any event a couple
of Governors and a psychiatrist from Houston, Baylor University
Hospital there, and they were all honed in on this research
which has determined, and as far as I know--I didn't know this
was new. I thought this was old information, how critical the
first 3 years of an infant's life is.
But it goes to a lot of things. It goes to how much
attention they get, how tenderly they are handled, a whole host
of things, their environment, but at the top of the list is
nutrition, what kind of diet they get, so, I think these
pediatric nutrition centers serve a great purpose, and I am
convinced we are just in the infancy of deciding what we really
need to be doing now.
I might say--this has nothing to do with agriculture, but I
asked those people the other day, if you know that, then the
next question is, what are we doing here in Congress? First of
all you have to have a decent home for that child's first 3
years. Second, you have to have decent health care for that
child's first 3 years, and you have to have devoted, caring
parents.
I have said many times that talking about family values is
a wonderful thing. I do not like for people to lecture me on
family values. I have got the greatest family anybody could
have. That is why I do not like for people to tell me about
family values. I know that.
But I can tell you one thing, there are a lot of children
in this country that would be better off anywhere than where
they are, so to say that does not conflict with family values.
Some people ought to be taken out of the environment they live
in, and as I say, that has nothing to do with agriculture.
Coming back, it is a whole host of things that make a
healthy, bright child, and to say that it all happens in the
first 3 years is one thing, but the really basic question is,
How do you determine how that child is going to get all that
tender loving care during the first 3 years? I chose my parents
well. A lot of people do not.
Do you have any comments on what I just said, or did I say
it all? [Laughter.]
Dr. Woteki. I think definitely we would agree with you that
the first 3 years of life are extremely important for children
and that nutrition plays a very critical role both in a
successful pregnancy, a healthy baby at birth, and in that
child's development.
I mentioned in my opening statement the fact that we have
been involved with some strategic planning over the last year
and a half to respond to the Government Performance and Results
Act, and as part of that we have identified some major goals
for our research program.
One of them is a healthy, well-nourished population. That
planning activity has given us a lot more insight into how we
can transfer the findings of research from places like the
Children's Hospital in Arkansas and our research center in
Houston, which also focuses on the nutritional needs of women
during pregnancy and of their children in their most formative
years, very quickly to the public, and to educators who are
working with the public.
We have, on a trial basis, had an extension educator
located at the Human Nutrition Research Center in Houston, and
that person has taken the primary responsibility for taking
those research results and getting them out quickly to the
extension community so that they can be helping parents such as
you have just described, and also so that that information can
be folded into some of our other education programs like the
Expanded Food and Nutrition Education Program, which provides
information on good nutrition and how to make food purchases on
a limited budget to families that are of limited means.
So, this reorganization that has occurred within the
Department within the last couple of years that created this
organization that sits before you, research, education, and
economics, gives us the opportunity to move the research
results into the applications much quicker and address some of
your concerns about healthy mothers, healthy babies, and
maximizing their growth.
Senator Bumpers. You are asking for a $6 million increase
in that program. I applaud that. It ought to be a lot more than
that, but Senator Cochran has the responsibility of making the
money fit here, and the committee has additional
responsibility.
Mr. Chairman, that is the end of my story.
Senator Cochran. Thank you very much, Senator.
Dr. Woteki, I have a number of questions on various
subjects that I am going to submit, one of which involves this
integrated pest management.
I am going to ask some specific questions to Dr. Horn and
his staff on that subject, but I know that one of the goals of
the integrated pest management initiative is to bring much of
the Nation's farmland under integrated pest management
practices by the year 2000.
Can you give us a status report as to what has been
accomplished in that regard to date, and what the additional
funds you are requesting for 1998 for this project will
achieve?
Integrated Pest Management
Dr. Woteki. Yes, Senator; I can. I am fumbling here. I had
put aside some special notes which I cannot seem to put my
hands on immediately with respect to IPM, but we do within our
budget request have an increase for IPM that involves actually
three different agencies within this area, the Agricultural
Research Service, CSREES, as well as the Economic Research
Service.
You are correct in identifying that the Department has a
goal of bringing 75 percent of crop acreage under IPM practices
by the year 2000, and the initiative that is included in our
budget this year addresses not only research in support of
meeting that objective, but also extension education programs,
as well as monitoring programs or surveys, essentially, to
monitor our progress toward meeting those goals.
I would like to start with ARS, since your question was
immediately addressed toward ARS, but as far as IPM activities
go there are two other agencies within the mission area that
are also included within this initiative.
So, Dr. Knipling, would you like to address the ARS part?
Dr. Knipling. Well, Mr. Chairman, IPM is, of course, a very
important part of the ARS program. It literally touches just
about everything we do at most of our laboratories.
Our proposal for 1998 does call for a $4 million increase
in this area, and that is on top of about an $18.5 million
program at the present time.
Specifically for next year we want to emphasize the
areawide pest management program. That is, to try to pull
together many of the things we have learned in past programs
and to actually apply it on an areawide basis, perhaps in
almost a validation demonstration mode, working with the
growers, the extension people, and many other parties, private
industry as well.
Senator Cochran. Where will you undertake this research?
Dr. Knipling. Funding for this program is slated to be
allocated on a competitive basis that we will manage.
Senator Cochran. Are you spending money in this way in this
fiscal year?
Dr. Knipling. We have that program underway now.
Senator Cochran. Where is the research being undertaken
now?
Dr. Knipling. Three programs are underway now, one in the
Pacific Northwest oriented toward codling moth in apples and in
pears, in the upper Midwest on the corn rootworm, and in the
Midsouth on cotton insects. Those are the three main programs
currently in place.
Senator Cochran. Where is the research being undertaken?
Dr. Knipling. In the Pacific Northwest it is based out of
our Wapato, WA, laboratory. In the upper Midwest, there are
several locations, with Brookings, SD, administering the
program and then in the Midsouth, the program is based out of
Stoneville, MS.
Senator Cochran. Can you give us for the record what the
exact projects are and where they are being undertaken?
Dr. Knipling. Yes; we can provide that for the record.
Senator Cochran. And where the money, the $4 million for
IPM research will be spent next year under your program?
Dr. Knipling. Yes; we can provide that for the record.
[The information follows:]
Areawide IPM Program
Of the $4 million requested, $1 million will be used for Areawide
IPM and pilot test programs; $2 million will be used for augmentation
biocontrol and biologically-based IPM in field, horticultural and
vegetable crops; and $1 million will be used for host-plant resistance
and related pest management strategies.
The current location of the ARS Areawide IPM test sites are as
follows:
1. Southern Insect Management Research Laboratory, Stoneville,
Mississippi
Cotton Bollworm/Corn Earworm/Tobacco Budworm Research Sites:
--Washington County, Leland/Stoneville, MS
2. Fruit and Vegetable Insects Research Laboratory, Wapato, Washington
Codling Moth Research Sites:
--Progressive Flat, Obanogan, WA
--Brewster Flat, Brewster, WA
--Manson, WA
--West Wapato, WA
--Lake Osoyoos, Oroville, WA
--West Parker Heights, WA
--Howard Flat, Chelan, WA
--Ukiah, CA
--Randall Island, CA
--Medford, OR
3. Crop and Entomology Research Laboratory, Brookings, South Dakota
Corn Rootworm Research Sites:
--North Central IL/IN (on the border) in Eastern Iroquois County,
IL (near Sheldon); and Western Benton County, IN (near
Sheldon, IL)
--Northeastern IA, Jackson County, Preston, IA
--North Central KS, Republic County, KS (near Scandia)
--Southeastern SD, Brookings County, Brookings, SD
Areawide Pest Management Projects
1. Research Project on Cotton Bollworm/Corn Earworm:
--Control Strategies for Heliothis/Helicoverpa SPP. and Other Field
Crop Insects in Cotton Agroecosystem, Stoneville, MS
2. Research Projects on Codling Moth:
--Areawide Pest Management of Corn Rootworm in Maize Production
Systems conducted at Progressive Flat, Okanogan, WA; West
Wapato, WA; Lake Osoyoos, Oroville, WA; and West Parker
Heights, WA
--Codling Moth Areawide Management Project, Brewster Flat, Brewster
Heights, WA; Hanson, WA
--Areawide Codling Moth Pilot Test Project, Howard Flat, Chelan, WA
--Codling Moth Areawide Management Project, Mendocino County, Ukiah,
CA
--Areawide Management of Codling Moth Using Mating Disruption, The
Randall Island Project, Randall Island, CA
--Areawide Suppression Program for Codling Moth in Oregon, Medford,
OR
3. Research Projects on Corn Rootworm:
--Development of a Corn Rootworm Areawide Management Program, North
Central IL/IN (on the border) in Eastern Iroquois County, IL
(near Sheldon); and Western Benton County, IN (near Sheldon,
IL)
--Development of a Corn Rootworm Areawide Management Program in Iowa,
Northeastern IA, Jackson County, Preston, IA
--Development of a Corn Rootworm Areawide Management Program in
Kansas, North Central KS, Republic County, KS (near Scandia)
--Areawide Pest Management of Corn Rootworm in Maize Production
Systems, Southeastern SD, Brookings County, Brookings, SD
Integrated and Areawide Pest Management--$4,000,000
Areawide IPM and Pilot Test Programs--$1,000,000.--Headquarters.
Augmentative and Biologically-based IPM in Field, Horticultural and
Vegetable Crops--$2,000,000.--Stoneville, MS, Orlando, FL, Beltsville,
MD, Gainesville, FL, and Weslaco, TX.
Host-Plant Resistance and Pest Management Strategies--$1,000,000.--
Stoneville, MS, Ames, IA, and Raleigh, NC.
Chemical/Nonchemical Research
Senator Cochran. Is there any way for you to break down
your chemical and nonchemical research components that fall
within the general area of integrated pest management?
Dr. Knipling. Yes; we have that data. The vast majority is
actually oriented toward nonchemical research, employing
biological control and genetic mechanisms. Certainly when we
get into the integrated pest management arena, that implicitly
embodies all types of approaches in some combination. So, we
probably could not discretely break out the pesticide part of
IPM, but we can for other parts of our pest control program.
[The information follows:]
ARS Chemical/Nonchemical Pest Control Research
Of the $134 million ARS spends on pest control research in
fiscal year 1997, $106,799,000 is devoted to non-chemical pest
control and $27,437,000 is devoted to chemical pest control.
The $134 million total can also be subdivided into other
categories: $53,770,000 is allocated to biocontrol, $18,544,000
to integrated pest management, and $61,922,000 to other pest
control programs.
ARS research on non-chemical means of pest management
includes fundamental studies of the taxonomy, biology, ecology,
physiology, pathology, metabolism, and nutrition of pests and
host plants and animals; as well as development of non-chemical
means through natural enemies such as predators, parasites, and
pathogens of pests, pest resistance, sterile insect technology,
naturally-derived attractants and repellents, and cultural and
physical control practices.
ARS research on chemical means of pest management deals
with technologies and systems to reduce chemical pesticides and
improve upon the timing, safety, and efficiency of their use in
concert with environmental and economic goals. ARS does not
devote any resources to the development of new chemical
pesticides, but does evaluate new ones developed by industry
and other cooperators. More specifically, our efforts on
chemical means is largely directed at improving pesticide use
patterns, including development of safer, more effective ways
to use chemical pesticides in pest management schemes by
timing, formulations, and modes of application; improved
detection and measurements of pesticides and metabolites; and
ways to eliminate or minimize chemical residues.
National Research Initiative
Senator Cochran. Dr. Woteki, the National Research
Initiative is another major goal for research, and it is, I
understand, going to get under your budget an increase of $36
million, a 38-percent increase from this current year level of
funding if we approve the request. We understand from your
statement that the research is primarily in three areas, food
safety, genetic enhancement of plants, and environmental
quality.
Could you tell us anything about the results that the
national research initiative has produced in terms of direct,
quantitative benefits or anecdotal successes to date?
Dr. Woteki. Well, I am going to call on Dr. Bob Robinson to
give you some anecdotal evidence of success for the National
Research Initiative, but before I ask him to do that I want to
indicate to you that we are intending to do a review of the NRI
to essentially assess its performance over the first 6 years or
so of its life. It seems like it is an appropriate time to
begin such a review.
The current chief scientist for the National Research
Initiative, Dr. Ron Phillips, is actually the person who
recommended that it is appropriate to do such a review at this
point in time, and those of us in leadership within the mission
area and who sit on the NRI's board very heartily endorse that
idea.
He has as well collected some information about the NRI and
the specific achievements of research that is funded under it,
and is planning to make that more generally available so in the
near future you need to be looking for some information we will
be providing to you on a rather routine basis about the NRI's
accomplishments.
Having said that, I would like to ask Dr. Robinson to
highlight some specifics for you.
Dr. Robinson. Thank you, Dr. Woteki. The question that you
have posed really has very many nice things to report, and I am
certainly not going to be able to get them all here. What I
would like to do perhaps, Senator, is to give you a few and
then send you a brief which has a rather significant array.
Senator Cochran. That would be helpful.
[The information follows:]
Cooperative State Research, Education, and Extension Service National
Research Initiative Accomplishments
In the summer of 1996, about 400,000 of Bt corn was grown
in the U.S. Bt corn has a bacterial gene incorporated into the
corn genome that produces a toxin extremely effective against
the European Corn Borer. Estimates are that 3.4 million acres
will be grown in 1997. Although this product is viewed as
developed by industry, public research laid the groundwork for
its development. The National Research Initiative (NRI) has
funded considerable work on Bacillus thurengiensis (1) for
determining the way Bt toxin destroys its insect host so that
the most effective Bt genes can be incorporated into the
engineered plant, and (2) for understanding the biochemical and
ecological basis of insect resistance to Bt so that resistance
problems can be avoided or delayed with the engineered crop.
Other NRI funding has allowed the molecular genetic mapping of
corn leading to efficient means for crossing the transgene into
various elite lines, documentation of the genetic behavior of
tissue cultures facilitating the regeneration of corn plants
with the Bt gene, etc.
The safe handling of food has been enhanced through NRI
funded projects. One of the outcomes is the isolation of
protein--invisible when applied to food preparation surfaces
such as cutting boards--that binds firmly to the surface but
does not allow harmful bacteria to bind. If they do bind, the
protein kills the cells. This product is called Nisin,
developed by researchers at Oregon State University. The
medical field is considering Nisin's value in treating
mechanical devises used in medicine.
The Spider Lamb Syndrome--SLS--is a congenital skeletal
defect controlled by a single recessive gene. Lambs that carry
the gene in heterozygous condition--carriers--are perfectly
normal--but matings between two carriers produce defective
lambs in about 25 percent of the progeny. Knowing that breeding
stock carries this gene reduces their value by about 70
percent. The gene is becoming more and more prevalent in the
Sulfolk and Hampshire breeds. In 1994, the NRI published a
``Research Highlights'' publication page indicating that
research had been funded to discover a marker gene that might
allow farmers to know when a ewe or ram carried the gene. In
the ensuing years, a maker was found that would allow the
identification of such carriers with 92 percent accuracy. Using
the chromosome map position of this marker gene in sheep as a
guide, Utah State University researchers looked for the marker
on the human molecular genetic map. At about the same distance
from this marker gene as found between it and the SLS trait in
sheep, the researchers noticed that a human trait had been
mapped that also influenced skeletal development. Using the
human gene as a probe onto the DNA from progeny segregating for
the SLS, the researchers found that this gene was 100 percent
associated with the trait. By this series of discoveries, we
now have available not only a perfect molecular genetic tag to
know when a lamb is a carrier, but the exact gene causing the
biochemical defect is now known.
Several wild species of tomatoes produce seemingly
worthless small--\1/2\-inch diameter--green fruit. It is not
surprising to find that these wild tomato species furnish genes
for cold tolerance, virus resistance, insect resistance and
increased solids. What is surprising is that a Cornell
University researcher, through NRI funding, found that these
green tomatoes possess genes that will make our normal red
tomato even redder. The researcher has found that the use of
the molecular genetic map of tomato, also developed in part
through NRI funding, allowed him to detect genes in the green
wild tomato that have an effect directly opposite to what one
would expect. The researcher also found that these tiny fruited
tomatoes have genes that will increase yield in our normally
cultivated types.
Researchers at Purdue University have developed a system to
use corn grits--ground corn kernels--to take the water out of
ethanol produced from corn, a system now used to process 750
million gallons of ethanol per year at a significant cost
savings over other methods. Through NRI support, the technology
is being extended to new applications. For example, modified
grits are being examined as a replacement for expensive
inorganic desiccants in pressure swing dryers to provide dry
air or other gases for use in paint spraying, ozone generation,
and pressurization of power and communication cables. In
addition, corn grits are being examined as a low-cost, natural
desiccant for air conditioners based evaporative cooling; in
this application, the grits can help displace ozone-depleting
chlorofluorocarbons and tap into a $26 billion global market.
Soybean Nematode Research
Dr. Robinson. Let me begin with one that I have used before
which I find absolutely intriguing from the point of view of
using fundamental science for a really basic problem, the
really basic problem being nematodes with soybeans. The
fundamental question is, How does it happen? How does the
nematode actually destroy the soybean's productivity?
Scientists from North Carolina State University have
discovered, it does it by exuding an enzyme which triggers a
genetic trigger inside the soybean plant that says divert food
to the nematode, and with some manipulation and fundamental
biological science, scientists at North Carolina State
University have been able to change that coding structure in a
way that the plant now ignores the enzyme's messages to the
genetic structure, and the nematode starves--very basic science
applied to a very real problem.
We actually find that when we can go across the country and
really look at developments all the way around, improving crop
yield and disease resistance--for example, many plants have
evolved very sophisticated systems to prevent inbreeding and
promote outcrosses.
One mechanism is self-incompatibility, a genetic barrier to
self-fertilization. For example, pollen of one genotype is not
able to fertilize the ovule of the same genotype. In many
plants this is controlled by a protein which rejects its own
pollen.
Senator Cochran. A protein?
Dr. Robinson. A protein. Using the petunia, a very simple
plant, scientists at Penn State University were able to use an
approach in which they turned that protein around and actually,
then, by turning the protein around they prevent the petunia
from rejecting its own pollen and allow a cross, and what this
is able to do in the future in terms of productive agricultural
crops opens a wide array of possibilities.
New Vaccines
NRI funds have supported the development of new vaccines
that deal with the viral diseases of pigs, for example.
According to the National Pork Producers Council the porcine
reproductive and respiratory syndrome is the most important
animal health problem facing pigs, and researchers at South
Dakota University, using funds from the NRI, have identified
and characterized the agent that causes this very significant
disease, and the work subsequently led to the development of
the first vaccine, which is currently used by swine producers
throughout the United States.
Similarly, tests have been developed to save new chicks.
Researchers at Ohio State, Mississippi State, and Purdue
University have developed tests that quickly and accurately
detect a highly contagious viral infection of new chicks in
order to prevent tremendous losses.
Aquaculture Research
From your State, saving catfish, one of the worst diseases
affecting the catfish industry is a winter disease that I
cannot even pronounce, but basically----
Senator Burns. Give it a shot.
Dr. Robinson. Saprolegniosis. About 10 percent of catfish
die from this disease each year, and it creates enormous
economic losses, between $20 and $40 million in the catfish
industry alone, and until recently there was no treatment for
the disease, until a discovery was made as a result of research
funded again under the NRI program, and scientists at the
University of Mississippi, while studying the disease
mechanisms and immunity, discovered that it could be prevented
by adding formula or diquat to the water at concentrations
presently approved already by the Food and Drug Administration
in the catfish ponds.
These are just a few of the examples, and one of the
reasons I picked the ones that I did is it addresses a question
that Senator Bumpers asked earlier, and that is, do just the
large prestigious universities, or do all universities
participate, and I picked an array of them, because a number of
universities participate in the NRI.
Senator Cochran. I did have a chance to visit Mississippi
State University and see firsthand some of the research being
done on catfish diseases, and was impressed with the hard work
and the commitment of the scientists there and their prospects
for success, and saw photographs of just what you were talking
about, whole catfish ponds almost just full of dead fish, and
so it is a devastating problem to the industry.
This has become one of the largest single employers in the
State of Mississippi. It is a big, big industry now, and
somebody told me the other day that if you buy a filet of farm-
raised catfish in a supermarket, the probability is that it
came from Mississippi, that it was produced, processed, and
marketed from there. Eighty-five percent of the total fish
being sold--this includes value-added catfish products--are
coming from the State of Mississippi now, so it has had a very
big economic impact in our State.
The potential for other kinds of aquaculture, too, we are
seeing developed. The so-called cold water aquaculture, I am
now finding out--Senator Byrd has explained that to me
recently--has great prospects as well.
There is another facility I visited recently, too, I wanted
to ask you about--the National Center for the Development of
Natural Products which is in Oxford, MS. To support the ARS
scientists at the facility, does your budget request additional
funding?
Funds also are still needed to complete that facility, and
I was worried about the comments that were made about cutting
out some of these funds in the President's budget.
I hope the committee will approve funds for completion of
that facility as well as provide additional support for the
research program so these scientists will be able to carry out
their mission. I note that funding is included in the budget
request to support the ARS natural products research program at
the Center, so I hope we can work out maybe getting your
support too for providing the additional resources I just
indicated are needed for fiscal year 1998.
Dr. Woteki. Certainly, Senator, as part of the approach we
are taking to facilities, given that this review is going to be
ongoing for the next 2 years, projects that are in construction
at this point in time will be completed.
Senator Cochran. The funding request which you have
submitted also talks about the Government Performance and
Results Act, and I remember from my service on the Governmental
Affairs Committee the development of that legislation, and I
know that you are conducting work to develop strategic plans.
You have had regional listening sessions on the plans, and you
are drafting a performance plan at the Department to implement
this act.
My question is can you tell us, or maybe submit for our
record, what funding has been necessary and the number of
staff-years which have been utilized by the agencies under your
jurisdiction for this fiscal year for activities related to the
implementation of the Government Performance and Results Act?
Since no funding is specifically provided for these activities,
I am curious about where the money is coming from, which
activities are supporting the funding and staff for this
project. You may know that.
Dr. Woteki. Actually, Senator, I do not off the top of my
head, and I doubt that any of my colleagues do, either. But we
would be happy to submit for the record information on the
number of staff-years that we are currently using and funding
out of this year that is going in support of our strategic
planning activities.
Senator Cochran. Thank you for that.
[The information follows:]
GPRA-Related Costs
The Government Performance and Results Act (GPRA) related
activities in which the REE agencies have been engaged is built
on a sound foundation of previous program planning. And much of
the REE mission area GPRA-related activity would have taken
place, perhaps in a somewhat different form, even in the
absence of GPRA, making it difficult to estimate the marginal
costs resulting from the passage of GPRA. For example, ARS's
current plan, ``The 6 Year implementation Plan 1992 to 1998,''
is nearing expiration. With or without GPRA, ARS would be
devoting resources to develop a new plan covering the next 5 or
6 fiscal years. The REE agencies activities focused
specifically on meeting GPRA requirements include management
training on GPRA and results-oriented planning and management
approaches, preparation of strategic plans and performance
plans, and extensive consultation with partners and
stakeholders. The costs associated with these activities
include staff time, travel expenses, expenses associated with
training and stakeholder meetings and some training costs. In
fiscal year 1997 the agencies estimate they will spend
approximately $750,000 in GPRA-related activities. Staff years
devoted to GPRA activities are estimated to be approximately 7
for the four REE agencies.
Dr. Woteki. I might indicate to you, though sir, that my
sense is that it has been a very positive experience for all of
the agencies in helping to more clearly delineate what the
future directions are for our research programs, how they
interrelate with our commitments for extension education and
higher education, and more general information provision to the
public and to those who rely very much on our research programs
for their livelihoods and their businesses.
It has also helped us to identify the complementarity among
the programs. We touched on that issue a bit through the other
questions that have been asked this morning.
So my general sense is that whatever expenditures have been
put into this planning activity are going to have a long-term
payoff.
Senator Cochran. Thank you.
ARS Small Fruits Laboratory, Poplarville, MS
One other parochial question I am going to ask is about a
facility that ARS maintains at Poplarville, MS, another
laboratory which I have visited in the past. I know it is doing
research important to the blueberry industry. It is the only
small fruit research station in the South, I am told, that is
involved in this kind of research. Reports I get from those in
the industry and from State officials who have an interest in
agriculture activity in our State is that this is important to
the future of many small farm industries, small landowners who
raise blueberries, blackberries, strawberries, muscadine
grapes, vegetables, and other horticulture crops. These
producers all benefit from the research done at this facility.
So I am putting in a plug for the facility. I hope it is not on
anybody's list to close. I do not know that it is, but I hope
it is not.
I am curious to know for the record what the funding and
staffing is that is proposed for 1998, and the work that is
being done there. I would like to just have a special report to
bring me up to date on what is occurring there. You may know
that off the top of your head.
Dr. Knipling. Well, I can give you a very quick overview.
We consider that as one of our very important locations. It is
a small activity, and different from a lot of ARS activities.
We are not addressing a particular problem, but we are trying
to exploit an economic opportunity. And as you pointed out, it
has had, over the past 10 years, impact on creating new
opportunities, new businesses, and so forth.
We have three scientists there, a total staff of about 14.
There are no proposed changes for next year. We would continue
that activity.
In addition to blueberries, they are also working on other
small fruits, strawberries and grapes. The program is capable
of doing more. That facility at one point housed a larger
number of scientists. It was originally started for tung oil
research, but that industry, of course, went with the hurricane
back in the 1970's, I believe.
Senator Cochran. I am told that that is coming back.
Dr. Knipling. Yes; we have heard that, too. There has been
some interest in our Poplarville activity to get back in that
research. We still maintain some germplasm of the old tung oil
plantings there.
Polymer Science Center
Senator Cochran. And I will tell you why. There is an
investment that CSREES made in the Polymer Science Center at
the University of Southern Mississippi a few years ago, and in
the development of polymers, which you scientists know all
about. Chemists know all about it anyway. They have developed a
new use for this tung oil that used to be produced and
virtually disappeared as a commercial crop or product in our
State, but now we understand that it is being encouraged by
some of the new products that have been developed as a result
of research at that University of Southern Mississippi Polymer
Science Center.
You may have something on that, Dr. Robinson. I do not
know.
Dr. Robinson. I am aware of it, but I do not have anything
specific on it. I will be glad to do a review and get you
something.
Senator Cochran. That is fine. I remember that from a
recent visit to that facility too.
Well, I would appreciate having that report, and if there
is any additional information the committee ought to have in
support of funding for the facility and the staffing of it at
current levels or whatever you think appropriate levels are. It
would be good for us to have that.
Dr. Robinson. We will provide that for the record, some of
the information I gave you, plus a little bit more.
[The information follows:]
ARS Small Fruits Research Laboratory, Poplarville, MS
Local and regional growers/interests groups have indicated
strong support for expansion of the current ARS Poplarville
research program on blueberries to include research on other
small fruits, vegetables, ornamentals, and new products from
tung oil. In order to fully implement new programs in these
areas ARS would need to add four new research scientist
positions supported by $1.2 million annually. The current
allocation to this laboratory totals $784,700 which provide
support for four research scientists.
Cooperative State Research, Education, and Extension Service Polymer
Science Center
The University of Southern Mississippi's Department of
Polymer Sciences is one of the top two polymer science programs
in America and focuses research on utilizing agricultural
materials as feedstocks for new and/or potentially valuable
polymer industry products that replace or substitute for those
traditionally derived from petroleum. The Polymer Sciences
group maintains long-term, high-level interest and expertise in
agriculture and, through its significant industrial ties,
pursues development and commercialization of products such as
foams, adhesives, coatings, elastomers, and high performance
thin films.
The Polymer Sciences group is specifically developing new,
advanced uses for tung oil, a drying oil used in many coatings
such as enamels and varnishes. In particular, tung oil
derivatives and polymers have many potential applications in
the coatings industry. For example, siliconized tung oil, when
used as an additive, provides property enhancements to latex or
water borne coatings. Property enhancements can include:
improved gloss, improved water resistance, gloss retention,
corrosion resistance, better adhesion, and reduced foaming.
Working with a national coatings firm, the Polymer Sciences
group is confident that this product will become commercially
available.
As the commercial viability of new tung oil products has
become more opportune, there are also efforts in Mississippi to
reestablish tung tree agroforestry. Private companies
specializing in vegetable oil products and farmers are starting
tung tree plantations and intend to harvest the nuts and
extract the oil for use by the coatings industry.
The Polymer Sciences group also works to develop many other
industrial products from plant materials. They are completing
characterization of Chinese melon oil, an oil known to be
similar to tung oil. They have been developing novel
applications of castor and lesquerella oils for structural
foams of interest to the military. In cooperation with a
private company, they have explored incorporation of
bioactivity from guayule resin in antifoulant paints.
Special Grants for Independent Research
Senator Cochran. I know there are other facilities around
the country, some of which are listed for suggested closing.
Dr. Woteki mentioned that. We will review all those requests
very carefully.
One thing I also hope that we will review too are special
grants that we have made for independent research in a number
of different areas. I know in the economic research area, Mr.
White may want to comment on this, we do have some special
grants that are made. I know of one particular fairly
substantial grant for economic research outside the Economic
Research Service. My question to you is do you review or use in
any way or find helpful research that is being done by any
grant recipients that you know about in developing economic
analysis under your mission?
Mr. White. Yes, Senator; we do collaborate with
universities that get special grants--Iowa State University,
University of Missouri. We find that research helpful.
We feel that it is important that we have a role in
reviewing requests for grant funding of this type so that we
can help to ensure that we do not get duplication of
responsibilities assigned to the grant-receiving agencies and
ERS. But we think it can be very productive and very
complementary to have this kind of funding complement our in-
house research.
Senator Cochran. Thank you.
Aquaculture Research
I have questions about aquaculture research, too. Senator
Bumpers made a point that is very important, about the
significance of aquaculture research, and I have a number of
questions which I will submit. I know, Dr. Horn, you came to
Mississippi, to the facility there, to help at the
groundbreaking, to celebrate the development of the National
Warmwater Aquaculture Research Center at Stoneville, MS. That
was a great day, and we understand that work on that facility
is proceeding on schedule. Is that your information, and do you
continue to support the efforts and the research that will be
undertaken there?
Dr. Horn. That is correct. In fact, I must admit that
aquaculture is one of the most rapidly growing interests in our
research, education, and economics mission area. The USDA is
the leader in aquaculture by any account, and the big picture
includes much more than warmwater or even freshwater
aquaculture. We are beginning to look at the effects of
agriculture on watersheds, on estuaries, and on saltwater fish,
as well. We have the Oceanic Institute in Hawaii dealing with
shrimp. The Stoneville facility is central to our program and
extremely important to our activities, particularly, of course,
to catfish disease, genetics, and production research.
Senator Cochran. Thank you very much.
We have systems research units in Pine Bluff, AR, and in
New Orleans. I have not visited that facility. I ran into
somebody from the Department of Agriculture that used to be up
here in one of these jobs who is now down in the New Orleans
facility. And he invited me to come down and look at that, and
I think I will.
The Southern Regional Research Center, it is called, in New
Orleans.
Dr. Horn. Yes; it may be of interest to you, this is a case
where we have brought some of our very fundamental science to
bear on a specific problem, and in this case we are using a
variety of sophisticated equipment, physicists, and chemists,
to look at the nature of off-flavor in catfish. And if this
research can deal with both the off-flavor in fish and the
algae that seemingly cause it, then the results will be
applicable to the catfish industry.
Assessing the Contribution of Fundamental Research
Senator Cochran. There may be additional questions along
this line dealing with this subject that we will submit for
further amplification.
I am also interested in the performance goals. The ARS
talks about long-term benefits to agriculture and American
citizens as performance goals. I made a talk not too long ago
down at Georgia Tech, or at a facility next door to the campus.
It was a regional collection of industry, government, academia,
talking about how we do a better job of allocating resources
for research. And I think they wanted me there to persuade me
to do what you all are asking us to do in your budget request,
and that is to let you decide where the research dollars are
spent rather than our making those decisions. But I do not
think we are going to change the mix. We have an interesting
mix now that I think works pretty well.
But the point is in this competition between basic research
and applied research or goal-driven research, it is really
impossible to quantify the practical benefits of basic
research. I think Dr. Robinson did a good job of pointing out
practical benefits from basic research in agriculture,
nematodes and soybeans and other items of evidence, but there
are no indicators as to how the agency could determine the
contribution from its research. Is it realistic to even expect
that?
I know I asked at the Natural Products Center. I said, can
you tell me something that you have accomplished? That is a
tough question to ask any scientist who is doing basic
research, what have you accomplished? Well, I have come to
work. I have gotten here on time every day for the whole year.
How is a question like that answered, or should we even ask
that question? If we do not ask that question, what question do
we ask of the basic research scientists, and why do we spend
money on it?
Dr. Woteki.
Dr. Woteki. Senator, we have been asking ourselves how do
we tell you the story of what the investment in the fundamental
research buys for this country. And we think we have some
indicators that can be used to tell that story.
If you are going to be evaluating fundamental or basic
research on an annual basis, I think that the main criteria
that is going to have to be used for the work that is done
within a relatively short period of time, like a year, is the
quality of the science. And in that, we have got mechanisms of
peer review where experts come in, look at the program, and say
this is a quality program or this is an area in which there are
other units, other centers, other investigators that we feel
are doing better work. So that kind of merit review by peers is
going to be something that we are going to use not only for the
selection of grant proposals under competitive grants programs
for the future, but we are also going to increasingly build
into our intramural research programs.
We also have got economic means for doing evaluations of a
portfolio of research that look at the return on the investment
that is made. But that takes a longer period of time in which
to do that type of evaluation. We are planning, under GPRA, to
continue to do that type of economic analysis, but it is not
going to tell you every year how this program is going to do.
It has to be done over a 5- or 10-year period of time.
The other way that I think that we can tell the story about
what the benefit of an investment in basic research has been is
by essentially tracing a story, to start with a fundamental
discovery like the nematode example that Dr. Robinson cited
earlier, funded out of the NRI and trace how that is
incorporated into agricultural programs and practices.
As part of our annual reporting to the Congress under GPRA,
we are going to choose some of those success stories that
illustrate how investment in some very basic research does have
a long-term payoff. They do not perhaps have a direct payoff.
They may have gone down some blind alleys and some side
streets; however, they tell how the investments have paid off
in some practical applications.
Assessing fundamental research under GPRA is perhaps the
hardest task that any Government organization has to do. It is
a problem not only facing us within agriculture research, but
the other science agencies are facing the same kind of problem.
And we have been consulting with each other as we have gone
about developing the metrics that we are going to be using, and
we are all, I think, going to be putting forward some
variations on these same kind of criteria that I have described
that we are considering.
Fund for Rural America
Senator Cochran. The Fund for Rural America was mentioned
by you in terms of the reduction in funding in the supplemental
that the House has approved. The farm bill authorized $100
million for this fiscal year. You mentioned in your statement
that you are allocating $46 million of that for research,
education, and extension activities. I am interested in the
research programs that will be funded by those dollars.
You have got $33 million earmarked for competitive
research, and I assume that you are inviting or have invited
requests for proposals to be submitted, or you have received
proposals for funding. It would be interesting to know what
research you have approved and where it is being done and what
the research is that is being done under this new program.
Could you submit that for the record for us? Or if you know,
you can tell us.
Dr. Woteki. What we can provide to you at this point is the
request for proposals that went out.
Senator Cochran. So we have not done anything with it yet.
Dr. Woteki. We have at this point received over 400
proposals for center grants, and we are expecting proposals--
the due date is the 28th, next week--for the project proposals.
So those center proposals and project proposals will then be
reviewed by peer panels; they will be ranked; and the decisions
upon awards will be made. It is going to take several months
till we get to that point. Then we would be happy to share with
you the portfolio of activities.
We will also be involving our Advisory Board in reviewing
the relevance of that portfolio of activities to the original
intent of the fund for rural America. So we could share with
you at this point the overall framework for the program, but it
will be several months until we can get you the list of
approved projects.
Sustainable Agriculture
Senator Cochran. I am told that the current year's funding
level for sustainable agriculture programs is $8 million. Do
you know how that money is being spent?
Dr. Woteki. I would like to ask Dr. Robinson to respond to
that. I think he also had a comment he wanted to make on the
fund for rural America question that you posed.
Senator Cochran. OK. Dr. Robinson.
Dr. Robinson. Thank you, Senator Cochran.
Fund for Rural America
The Fund for Rural America RFP, which is out and the
proposals are due back in the last of this month, did have
three major areas in it that I thought might address to some
extent your question. Proposals were solicited under three
broad areas. One is international competitiveness,
profitability, and efficiency. So there are a whole array of
proposals that could come from an extension point of view, a
research point of view, some combination of those, and problem-
solving approaches were encouraged under the fund.
The second broad area is environmental stewardship, which
covers the broad array of activities that interface between
agricultural production and the environment in the natural
resource base.
The third broad array of proposals were under the heading
of rural community enhancement, which covered a number of
activities dealing with rural economic development and social
development that are part of the overall purpose of the fund.
But they do address and repeat Dr. Woteki's point, which is
something that the fund very specifically has as part of its
mechanisms, a review for relevance by the National Advisory
Board, and that is one of the additional elements, I think,
that is involved with the proposition of trying to assess the
benefits from investments in research. In addition to having
peer review to ensure good science, it is a way to ensure that
the scientists are considering what the industries or interest
groups think are some of the most significant problems.
Sustainable Agriculture
With regard to the sustainable agricultural research
program, these projects or this program is actually conducted
through regional sustainability consortia. These consortia of
universities consider both scientists and producers when
reviewed proposals that are submitted for funding under the
sustainable agriculture program. Funds are competitively
awarded as well as allocation to various regions for projects
in sustainable agriculture research and education.
But one of the interesting and I think innovative factors
in this particular program, and it is in part also harking back
to the IPM question you asked earlier, and the distribution of
some of the competitive funds, is that farmers or producers are
participating in the early panels to look at the relevance of
the proposals that are being submitted for funding for
sustainable agriculture.
Just as an example of some of the output, a project in New
York has helped farmers use rotations to boost corn profits by
$30 to $115 an acre, while at the same time protecting the
environment. And we have, from each of these regions, and I
will be most happy to provide your office a copy of an annual
report of the types of projects, the types of investments of
these funds, and the results of those projects.
Rangeland Research
Senator Cochran. I appreciate that very much.
There is another area, and this is going to get Senator
Burns' attention, I think. But I noticed that the funding for
rangeland research is proposed to be terminated or sharply
reduced in this budget request. This concerns me because this
is one of the biggest industries in the country. We were
talking about how the aquaculture industry is growing. Well,
beef cattle and related industries, dairy as well, are huge in
terms of total dollar volume in our economy. I wonder why we
see these proposals to cut back this area of research. Do we
already know all we need to know about grasses and nutritional
values and the economics of range management?
Dr. Robinson. No, sir; we do not know all we need to know
in those areas. In keeping with the effort to increase the
budget in some areas that were believed critical, and still
maintain a budget that did not show so much exposure for
deficit reduction purposes, the President's budget contains
both some increases and some decreases. Rangeland research was
one of the areas that could be part of the National Research
Initiative, under the environmental component of the national
research initiative, as well as under the plant component. In
addition, the formula funds that are allocated to universities
can also be allocated to rangeland research.
So it is certainly not a matter of suggesting that we know
all that we should in those areas, but rather it is a matter of
trying to set some priorities.
Senator Cochran. In the Economic Research Service area, I
notice that there are some increases. I had that part of the
original statement identified, but I do not see it now. Did I
read that right, there is an increase in total number of
researchers? How is the money being spent?
Mr. White. There are three components, to the increase. One
part would cover approximately 50 percent of the increase in
salary costs to the agency for the year. The second component
has to do with our participation in a joint effort involving
eight of the statistical agencies of the Federal Government in
coming up with better measures of contribution of our programs
to the outcomes that we are seeking. And the third component
has to do with improving our data and our ability to analyze
that data on the practices adopted on farms. So it would help
us to understand better adoption of IPM and other kinds of
practices, not only the rate at which they are being adopted,
but also why are farmers adopting some practices and not
others. We will be looking at profitability as well as
demographic and other factors that might affect the adoption of
these practices.
Senator Cochran. I have been told that we have made some
very impressive new discoveries in the use of satellite imaging
or aerial photography and measuring in new and innovative ways
the need for the application of pesticides or herbicides in
production agriculture. You can isolate different areas in a
plot of land that you may have planted to soybeans, for
example, and identify that only a small portion of that may
require an application of chemical sprays or whatever is being
used. Is this something that is being advertised or extended to
those who are in production agriculture, either through the
Extension Service or the Economic Research Service, by data and
reports, and how could this affect the profitability of a
farmer's operation if he or she is able to utilize these new
technologies? Dr. Woteki.
Precision Agriculture
Dr. Woteki. Senator, I might start this off. There are many
applications of remote sensing in agriculture. There is a lot
of enthusiasm about what is called precision agriculture, and
we have an active research program ongoing within the
Agricultural Research Service that specifically focuses on
remote sensing applications in production agriculture. There
are some successes to talk about, and Dr. Knipling can identify
those.
We also support university-based researchers, both through
the formula funds and through the competitive grants programs,
and Dr. Robinson can point out some of the successes in that
area.
We also, within the National Agricultural Statistics
Service, have been relying increasingly on satellite-generated
images as the basis for the statistical sampling that NASS
undertakes in its surveys. So we have a third application in
that area, and among those, which one would you like to start
with for more information?
Senator Cochran. Well, I am familiar with the work that is
being done. I am just interested, from an economic standpoint,
in whether the USDA agencies are involved in that too.
Mr. White. Thank you.
We have done some preliminary analysis of precision
agriculture. One of the difficulties that we have in analyzing
precision agriculture is that it is a very microapplication of
remote sensing. It really improves the ability to get correct
applications of nutrients in very small geographic areas.
Therefore, it is the kind of analysis that has to be done on
parts of a field, and it is very difficult to generalize to the
overall profitability of the program. But we are following that
trend, and we will undertake research activities to look at the
aggregate implications of precision agriculture when data are
available.
Senator Cochran. That is one of the reasons for my
question. These things sometimes look good, sound good; they
are exciting; they do great in a presentation when you put up
charts to talk about everything. Then, you find out it costs
five times as much to generate these charts and everything as
it does the money that you save in utilizing the research or
trying to put it to some practical use. That is why I asked the
economics guy, because I think that is what you all are for, is
it not? In part, you try to help production agriculture figure
out ways to translate economic theory into practical uses. Or
am I missing something?
Mr. White. You are absolutely right, Senator.
Census of Agriculture
Senator Cochran. There is another question I wanted to ask,
too. You mentioned the National Agricultural Statistics
Service, and I wanted Mr. Bay to know that I was not going to
leave him out. I am going to ask him something.
I am curious to know about the new undertaking that has
been shifted from the Department of Commerce to the Department
of Agriculture to conduct the census of agriculture. There has
been the suggestion that legislation may be needed to clarify
the authorities of the Department of Agriculture to proceed in
this area. Is that really necessary, or is that just something
that the lawyers tell you you would like to have if you could?
Can we get along without having legislative changes?
You have asked for some additional money to do this. If we
do not get the legislative changes, can we take the money back?
[Laughter.]
Mr. Bay. Mr. Chairman, thank you. I guess I would like to
answer the last part of that question first. No. [Laughter.]
If we want to have the census of Agriculture conducted, we
would need the resources to do that.
The first part of the question was regarding the
legislation. The legislation is needed, and it is not to
satisfy just what the lawyers say we have to have. We do have
to have the authority in the Department of Agriculture. It is
just a matter of shifting the authority that is now in the
Department of Commerce Census Bureau to Agriculture, which is
the same legislation that authorized it in the Department of
Commerce, and that gives us the authority to collect the data.
It is on a mandatory basis, and without that legislation we
do not have that authority. And if you do not have that
authority, the costs for doing the census go sky high on a
voluntary basis, and the coverage of the census is not as good,
and therefore the quality of the data is compromised.
We had to go ahead and print the questionnaires, and we
have printed them on the assumption that we would have the
authority. So we really need the authority of the legislation.
Senator Cochran. Thank you very much.
Senator Burns, and then Senator Gorton.
Senator Burns. I have got a couple. Refresh my memory. Why
did the Commerce Department want to move the census part over
to the Agriculture Department?
Mr. Bay. Well, the Census Bureau went through strategic
planning, like we all are, and agriculture was one of the lower
priority items in their prioritizing of programs. And the
Department of Agriculture was supportive of the continuation of
the census of agriculture, and therefore it seemed appropriate
that since we had the interest in it that it should be
transferred to the Department of Agriculture.
Also, there is a savings you will notice in my budget for
fiscal year 1998 of $1 million because of the duplication that
existed between what the Department of Commerce did and what
the Department of Agriculture did in the way of surveying
farmers, and there was a feeling that this was an opportunity
to bring together two programs that overlapped.
Senator Burns. Well, the money that the Commerce Department
used to spend on agriculture, did it come with the program?
Mr. Bay. That is a committee problem. [Laughter.]
Senator Burns. It sounds like one of yours, too, is getting
the money. You know, it always just unravels my mind whenever
we say the Commerce Department had such a low priority on
agriculture. It is the largest contributor to the GDP in this
country, and they say they represent the commerce of this
country. And I just find that very, very strange, and I agree
with what they did and I think you ought to be doing it.
I just have an overall--I am excited about the range
management, too, and range research. I will tell you right now
that I do not disagree with the science and the research that
we do in agriculture, and maybe you do not get enough money. I
will argue with you sometimes on priorities, but not the
necessity of it. And right now I am saying that we have got
some areas that we have to do a lot more work.
I have a daughter that told me the other night in a
conversation, says you can talk about all this other stuff that
we do on nutrition. If you want to tell your story about
research, look at the American people and compare them to any
other people in the world. They live longer, buy better food,
more nutritional--that is the result of agriculture research.
You cannot get specific about it, but just look at us. We live
longer than anybody else in the world.
Now, the medical community can only claim a very small part
for the increase of longevity and our lifetime in this country
since World War II. Did you know that? Do you know what the
rest of it is contributed to? How we handle our water. More
life-threatening and life-shortening diseases are waterborne
than any other way.
Dr. Woteki. Well, it is actually three factors, Mr. Burns.
One is sanitation, as you pointed out; one is a health-
promoting, easily accessible, affordable food supply; the third
component is the decrease in childhood deaths through better
prenatal and immediate postnatal care, and vaccination of
children. That is the health component that has helped.
Senator Burns. But that has not had any impact like it has
on how we handle our water, ground water.
Now, I think Dr. Horn and some of this thing, we have got
to take a look at nonpoint-source solution and agriculture's
role in that. That will require research as far as irrigated
farming, everything that we do in the handling of our water. I
think that is our most important challenge that is in front of
us. We can talk about all this other stuff, and I understand
that when I came to town I wanted more dollars to control
noxious weeds. I found out in this town that you cannot go to
the gray poupon and white wine parties and talk about weeds
because pretty soon you are standing there talking all by
yourself, because they are not a high priority in this town, is
weeds.
But to us in agriculture who understand agriculture they
are damned important. So what I am saying is that you folks
should be congratulated on the science that you have done, that
you are doing. Maybe we are going to have to change our focus a
little more, because water is pretty important, how we handle
it, to Senator Cochran's State and aquaculture, because that
all goes hand in hand. It is the very basic of things that we
do.
And I also want to remind you that we do well in garnering
Nobel Prizes for science, both in agriculture and over in other
areas, too. But somebody else gets our market. So that tells me
we had better be doing some research on how to sell the darn
stuff. We had better get a better trader whenever we go in
dickering for these international agreements on trade. We had
better have a better cow trader up there than we have had in
the last 10 or 15 years, because I will tell you, they have
dickered away all of our market out there, and that is where we
had better get sharp.
So do not be afraid to say, whenever somebody asks you on
our research, do not be afraid to say let us just look at
America and compare it to any other nation in the world, and I
think you have got a great story to tell, and I know you can
tell it.
So congratulations, and before it is all over I will have
some questions I want to submit, and before it is all over I
want to talk very seriously about our priorities where we
should be doing most of our research.
And thank you very much for coming today. I was very much
interested in your questions.
Senator Cochran. Thank you, Senator.
Senator Gorton.
Senator Gorton. Thank you, Mr. Chairman.
I have for you, Dr. Woteki, and perhaps for Dr. Knipling, a
couple of rather parochial questions. We were startled, to say
the least, to see that the President's budget was going to
close down a more than 40-year history of cooperative research
with Washington State University at Pullman, and I would like
to hear your justification for doing so. Excuse me, not
Pullman, but Prosser.
Proposed Closure of Prosser
Dr. Woteki. Yes; you threw me for a loop there for a minute
because I expected you to say Prosser.
We have had a very difficult budget year this year and had
to make some very difficult decisions about priorities. Within
the Agricultural Research Service, as you know, there are over
100 research laboratories, and there are multiple projects
within those laboratories.
When we were planning our 1998 budget request we had a
number of new initiatives. They involve either emerging
problems or major new areas of research that we wanted to
accommodate and be able to address within the Agricultural
Research Service, things like food safety, emerging diseases
that affect both crops and livestock. Within ARS we also wanted
to be able to address some of the grazinglands research issues
that Senator Burns has been asking about, as well as integrated
pest management biocontrols and human nutrition research as
major new emphases or increasing emphases within ARS.
We had a process that we used to rank all of the projects
within the Agricultural Research Service that related to their
relevance to the mission and the priorities of the agency, the
capacity of the agency to continue that research, and the
overall impact, the effect on American agriculture. The senior
staff within the Agricultural Research Service reviewed all of
the projects against those criteria, and then ranked them. On
the basis of that ranking the lowest ranked projects were
identified as being ones for either major reduction or
elimination, and then based on that project ranking we looked
at which facilities had most of their projects ranking in this
lowest quartile.
In that ranking there were 71 projects that were found to
be in that lowest tier, and on the basis, then, of that
programmatic and quality, essentially, review, we made the
decision to close the Prosser facility.
Senator Gorton. And the Mandan facility falls into the same
category?
Dr. Woteki. And the Mandan facility, as well.
Senator Gorton. Are those rankings and the facts and
judgments that went into them available to the committee?
Dr. Woteki. We can make available to you information about
the process that was used, as well as the overall rankings.
Senator Gorton. I would greatly appreciate your doing so.
We understand that those projects that you propose to transfer
both the Washington State University and to Idaho, that the
facilities to which you propose to transfer them have no room
for the people or for the projects without a capital investment
in new facilities. Was that considered?
Dr. Woteki. I am not aware of that discussion. I am going
to ask Dr. Knipling to respond.
Dr. Knipling. The Prosser laboratory has seven research
projects. Three of those are proposed for retention, while four
are proposed for termination. One of the projects proposed for
retention is really part of our minor uses pesticide evaluation
activity, which would come back to headquarters for
reallocation to other locations where we do that type of work.
The two projects that you are probably speaking of is the
potato project which is proposed to go to Aberdeen, ID. This is
not an issue of space. We do recognize, however, in retrospect
that there was an oversight. Some of that work is dealing with
potato virus-free certification. We are going to have to decide
on an alternative location, probably Corvallis, OR, where we
have a similar activity, or perhaps in the State of Washington
at our Yakima laboratory. So it is not a matter of space at
Aberdeen, but rather this virus-free certification issue.
The pea and lentil project at Prosser is scheduled to be
moved intact as it is now to Pullman, where we have similar
work. That was one of our original objectives, to consolidate
similar work so as to get more of a critical mass of scientists
working on the problem. We are aware that there are some space
limitations there at the university. We are exploring several
options which would not involve significant capital investment,
such as utilizing some temporary space or perhaps even a rental
space from a private source.
We really do not consider that as an overwhelming
limitation to the movement of the pea and lentil project to
Pullman.
Senator Gorton. Thank you. Thank you both for your answers.
I would appreciate as much background information on the way in
which these priority determinations have been made as you have
available so that I and we can determine whether or not we
agree.
Thank you, Mr. Chairman.
Senator Cochran. Thank you, Senator.
[The information follows:]
Project Evaluation Process
All research projects in the ARS portfolio were evaluated by the
Agency's senior management team using the ARS Project Evaluation Guide.
A copy of the Guide is available. There are three primary factors in
the evaluation process. These are: I Relevance, II Capacity, III
Impact. A careful analysis of the Federal role is also conducted.
Relevance deals with the nature, scope, and characteristics of a
project. Capacity deals with the resource capability and capacity of a
project to meet the stated objectives. Impact is concerned with the
changes that have or are anticipated to occur as a result of the impact
of ARS research on the scientific community, the Nation's economy,
society, and on policy issues of the Nation. Possible scores for each
of the three factors range from a low of 2 to a high of 14 in 2-point
increments, so that the maximum consensus score possible for any one
project would be 14 x 3 or 42.
The purpose of these ratings was to develop an initial grouping of
projects for further consideration. Those projects that fell into the
lower quartile were the ones that were further scrutinized. These
ratings represented the first step in the overall decisionmaking
process to guide further discussions of the ARS senior management team,
and therefore were not retained. In reconstructing the process, I
recall the consensus scores for all the Agency's projects evaluated as
part of the fiscal year 1998 budget process ranged from a low of 6 to a
high of 38. Over 90 percent of the Agency's projects received scores in
excess of 22. All of the 71 projects proposed for termination and
reallocation in the fiscal year 1998 budget scored in the range of 6 to
22. In regard specifically to the Prosser location, the four projects
proposed for termination scored in the range of 16 to 20. Because
termination of those projects would jeopardize the capacity of the
remaining three projects to support the Prosser facility, the decision
was made to move the remaining projects to other locations.
Specifically, the pea and lentil project will be relocated to the
Pullman location and the potato project will likely be relocated to
Aberdeen, Idaho or Corvallis, Oregon.
We are aware that there are no ``good'' ways to close ARS
laboratories. However, it is important to note that earlier attempts to
close facilities resulted in the identification of resources as cost
savings and resulted in the loss of funds to the Agency. Under the
current budget, funds are retained by the Agency and redirected to high
priority research. In many instances, ARS utilizes the same scientists
to carry out the newly proposed research at other nearby facilities.
Submitted Questions
Senator Cochran. I appreciate very much the attendance and
cooperation of all of our witnesses, and for your testimony.
Additional questions will be submitted in writing, and we hope
you will be able to respond to them in a timely fashion.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]
Agricultural Research Service
Questions Submitted by Senator Cochran
location closures
Question. Please update the status of ARS laboratories closed in
fiscal year 1995 and fiscal year 1996? Have these locations been turned
over to GSA for disposal? Describe the disposition of these facilities.
Answer. Of the ten (10) ARS locations closed in fiscal year 1995,
all disposal actions have been completed at eight (8) of these sites.
These eight locations and the new owners of the land and buildings,
where appropriate, are as follows: Delaware, OH, buildings transferred
to USDA, Forest Service; Fairbanks, AK, (No federally owned land or
buildings involved); Georgetown, DE, buildings transferred to the
Department of Education for use by the University of Delaware;
Lewisburg, TN, land and buildings transferred to the University of
Tennessee; Lexington, KY, (No Federally-owned land or buildings
involved); Oxford, NC, land and buildings transferred to USDA, Animal
and Plant Health Inspection Services; Suffolk, VA, buildings
transferred to the Department of Education for use by Virginia
Polytechnic Institute and State University; Rotterdam the Netherlands
(No federally owned land or buildings involved).
The land and facilities at Pasadena, CA, have been reported to GSA
for disposal. The facilities at Savannah, GA, will be reported upon
completion of environmental cleanup activities.
In fiscal year 1996, the facilities at three ARS locations were
identified for transfer to non-federal entities. The land and buildings
at two (2) locations have been reported to GSA for disposition. In
fiscal year 1997, Houma, LA, will be transferred to the American Sugar
Cane League Foundation and Brawley, CA, will be transferred to Imperial
County, CA. The transfer of the facilities at Brownwood, TX, is on hold
pending continuing negotiations with Texas A&M.
Question. What is the status of the closures at Bozeman, Montana
and Durant, Oklahoma?
Answer. Bozeman, Montana-Research programs and personnel have been
transferred to Sidney, Montana. All ARS-owned buildings, with the
exception of three greenhouses, were offered to the University of
Montana. The greenhouses are being used by USDA, Forest Service through
September 20, 1997, then will be demolished by ARS. Durant, Oklahoma,
research programs and personnel have been transferred to El Reno,
Oklahoma. Completion of the real property disposal is pending
resolution of environmental issues.
location closures
Question. What criteria was used to decide closure of ARS locations
at Mandan, North Dakota and Prosser, Washington?
Answer. The criteria imposed included relevance, capacity, and
impact. A careful analysis of the Federal role was also conducted.
Relevance deals with the nature, scope, and characteristics of research
projects being carried out. Capacity deals with the resource capability
and capacity of the laboratory to meet the stated objective(s). Impact
is concerned with the change(s) that have or are anticipated to occur
as a result of the impact of ARS research on the scientific community,
the Nation's economy, on society, and on policy issues of the Nation.
Question. How many people and scientists would be impacted by the
closure of Prosser, Washington; Mandan, North Dakota; Orono, Maine; and
Brawley, California? What are the operating costs for these
laboratories?
Answer. The number of people and scientists impacted by closures
and the operating costs for these laboratories are provided below.
------------------------------------------------------------------------
Number of-- Fiscal year
Location/worksite* ----------------------- 1997 operating
People Scientists costs
------------------------------------------------------------------------
Prosser, Washington.............. \1\ 37 8 \1\ $2,721,500
Mandan, North Dakota............. \2\ 38 9 \2\ 2,886,300
Orono, Maine*.................... 6 1 135,500
Brawley, California*............. 8 1 321,000
------------------------------------------------------------------------
\1\ Includes 4 scientists and $1,284,800 proposed for redirection as
follows: Pullman, WA 2 scientists/$550,000; Headquarters $88,600; and
Aberdeen, ID 2 scientists/$646,200.
\2\ Includes 2 scientists and $551,100 proposed for redirection to Miles
City, MT.
requested increases for fiscal year 1998
Question. ARS is proposing to finance most of its proposed
increases through reductions of current research. Did the Agency
recommend this approach or was this a department or OMB decision?
Answer. Decisions on reductions/termination of all projects are
based on agency assessments and recommendations that are subsequently
reviewed at the Department level and at OMB. The decisions on funding
levels and targets were made at the Department and OMB levels in
response to the need to balance competing agriculture priorities for
limited resources and to identify savings from existing resources as a
means of carrying out increased research needs to address high priority
emerging research issues.
Question. Provide for the record, agency, department and OMB
recommendations for the 1998 budget.
Answer. The ARS budget recommendations for the 1998 budget will be
provided for the record.
FISCAL YEAR 1998 APPROPRIATION HISTORY
----------------------------------------------------------------------------------------------------------------
Agency Department President's
Item estimate estimate budget
----------------------------------------------------------------------------------------------------------------
Base Level \1\.................................................. $728,853,000 $716,826,000 $716,797,000
PROGRAM INCREASES
Animal Sciences................................................. 15,000,000 3,800,000 ..............
Food Safety..................................................... 10,000,000 5,000,000 4,114,000
Emerging Diseases/Exotic Pests.................................. 15,000,000 9,374,000 5,000,000
Grazinglands.................................................... 11,000,000 1,700,000 1,000,000
Genetic Resources............................................... 6,000,000 3,900,000 2,000,000
IPM/Biocontrol 15,000,000 5,700,000 4,000,000
NAL............................................................. 4,000,000 2,000,000 ..............
Aquaculture..................................................... 8,000,000 .............. ..............
Floral/Nursery Crops............................................ 2,000,000 .............. ..............
Lower Delta Initiative.......................................... 4,000,000 .............. ..............
Everglades Initiative........................................... .............. .............. 2,000,000
Human Nutrition................................................. .............. .............. 12,000,000
-----------------------------------------------
Subtotal, Program Increases............................... 90,000,000 31,474,000 30,114,000
===============================================
OTHER INCREASES
Pay Costs (3 percent)........................................... 17,021,000 6,409,000 6,409,000
Increased Operating Costs....................................... 8,314,000 .............. ..............
Increased CSRS Costs (1.51 percent)............................. 2,767,000 .............. ..............
-----------------------------------------------
Subtotal, Other Increases................................. 28,102,000 6,409,000 6,409,000
===============================================
DECREASES
General Reductions/Termination of Less-Critical Projects/Admin.
O/H............................................................ .............. -8,023,000 -23,023,000
Streamline Reductions in Staff-Years............................ -3,553,000 -3,500,000 -3,500,000
-----------------------------------------------
Subtotal, Decreases....................................... -3,553,000 -11,523,000 -26,523,000
-----------------------------------------------
Total..................................................... 114,549,000 26,360,000 10,000,000
===============================================
Total, ARS................................................ 843,402,000 743,186,000 726,797,000
===============================================
Buildings and Facilities
Beltsville Agricultural Research Center, Beltsville, MD
(Modernization)................................................ 20,000,000 3,200,000 3,200,000
ARS Regional Research Centers:
Philadelphia, PA............................................ 5,200,000 5,200,000 5,200,000
New Orleans, LA............................................. 1,100,000 1,100,000 1,100,000
Peoria, IL.................................................. 8,000,000 8,000,000 8,000,000
-----------------------------------------------
(Modernization)........................................... 14,300,000 14,300,000 14,300,000
Plum Island Animal Disease Center, Greenport, NY (Modernization) 8,400,000 5,000,000 5,000,000
U.S. Horticultural Crops and Water Management Research
Laboratory, Parlier, CA (Construction)......................... 23,400,000 23,400,000 23,400,000
Western Human Nutrition Research Center, Davis, CA (Planning/
Design)........................................................ 3,200,000 3,200,000 ..............
National Agricultural Library, Beltsville, MD (Modernization)... 6,000,000 6,000,000 6,000,000
European Biological Control Laboratory, Montpellier, France
(Construction)................................................. 3,800,000 3,400,000 3,400,000
Subtropical Agricultural Research Laboratory, Weslaco, TX
(Modernization)................................................ 4,600,000 .............. ..............
U.S. Grain Marketing and Research Laboratory, Manhattan, KS
(Modernization)................................................ 2,250,000 .............. ..............
Quarantine Facility, Ft. Lauderdale, FL (Construction).......... .............. .............. 4,000,000
Entomological Laboratories, Gainesville, FL (Construction)...... 6,200,000 .............. ..............
U.S. Vegetable Laboratory, Charleston, SC (Planning/Design/
Construction).................................................. 7,630,000 .............. ..............
National Coldwater Aquaculture Research Center, Leetown, WV
(Construction)................................................. 4,000,000 .............. ..............
National Animal Disease Center, Ames, IA (Modernization)........ 8,400,000 .............. ..............
Southeast Poultry Research Laboratory, Athens, GA (Construction) 5,100,000 .............. ..............
Plant and Natural Resources Laboratory, Maricopa, AZ (Planning
and Design).................................................... 5,500,000 .............. ..............
North Central Soil Conservation Research Laboratory, Morris, MN
(Construction)................................................. 3,800,000 .............. ..............
Rearing and Genetics Laboratory, Waimanalo and Tropical Fruits
and Vegetables Laboratory, Hilo, HI (Planning/Design).......... 1,750,000 .............. ..............
Plant Physiology and Genetics Research Laboratory, Urbana, IL
(Planning/Design/Construction)................................. 1,800,000 .............. ..............
Avian Disease and Oncology Laboratory, East Lansing, MI (Design) 1,900,000 .............. ..............
Sugar Beet, Bean and Cereal Research Laboratory, East Lansing,
MI (Planning/Design/Construction).............................. 870,000 .............. ..............
Insect Rearing Facility, Stoneville, MS (Planning/Design)....... 1,000,000 .............. ..............
Energy Audits of ARS Facilities (Planning)...................... 2,000,000 .............. ..............
Inventory of CFC Chillers (Planning)............................ 2,000,000 .............. ..............
Seismic Studies of ARS Facilities (Planning).................... 1,000,000 .............. ..............
-----------------------------------------------
Total..................................................... 138,900,000 58,500,000 59,300,000
----------------------------------------------------------------------------------------------------------------
\1\ For the agency estimate, the base was the fiscal year 1997 President's budget. For Department Estimate, the
base was the fiscal year 1997 Appropriations, and for the President's budget, the base was adjusted fiscal
year 1997 appropriations.
Question. Provide for each of the requested increases, how and
where the new funding will be allotted.
Answer. The new funding proposed will be allotted as follows:
emerging diseases and exotic pests--$5,000,000
Emerging Plant Diseases--$2,500,000
Frederick, $900,000.--Develop improved techniques for karnal bunt
pathogen detection, identification, and characterization; develop
methods to decontaminate infested commodities, equipment, and handling
facilities; and characterize factor affecting host-pathogen
interactions.
Aberdeen, $300,000.--Develop system for evaluating germplasm for
resistance to karnal bunt, and establish program for systematic
screening of new and existing crop varieties for resistance.
St. Paul, $500,000.--Characterize karnal bunt disease and wheat
scab epidemiology and fungal ecology, including factors affecting
disease establishment and potential points of control.
Manhattan, $500,000.--Improve resistance of wheat varieties to
karnal bunt by developing and utilizing genetic methods for
incorporating disease resistance from related and unrelated species.
Albany, $300,000.--Improve the genetic resistance of wheat
varieties to karnal bunt by determining the number and map position of
resistance genes; describing the regulation of resistance gene
expression; and determining the mechanisms operating in resistant
hosts.
Emerging Exotic Diseases of Livestock--$1,100,000
Ames, $500,000.--Develop diagnostic tests to detect Transmissible
Spongiform Encephalopathies in live animals, i.e. Scrapies, Chronic
Wasting Disease of Cervids, and Bovine Spongiform Encephalopathy-like
Encephalopathies.
Athens, $300,000.--Develop novel genetic vaccines and immune
modulatory strategies to prevent outbreaks of exotic poultry diseases
such as highly pathogenic Avian Influenza and velogenic Newcastle
Disease.
Greenport, $300,000.--Develop diagnostic tests and vaccines for
emerging foreign animal diseases of livestock such as Foot and Mouth
disease and African Swine Fever.
Emerging Domestic and Zoonotic Diseases of Livestock--$1,400,000
Ames, $400,000.--Develop methods to control porcine reproductive
and respiratory syndrome (PRRS), an emerging disease problem for the
swine industry.
Ames, $300,000.--Develop a vaccine for a newly recognized variant
of Bovine Viral Diarrhea.
Ames, $400,000.--Improve diagnostic tests for the detection of
Johne's disease and investigate the role of genetic resistance in this
disease which has recently been suggested to be associated with Crohn's
disease in human beings.
Beltsville, $300,000.--Identify animal reservoirs, life-cycle, and
intervention methods for newly recognized microsporidial protozoan
parasites (Cryptosporidium and Cyclospora) both animals and people.
integrated and areawide pest management-$4,000,000
Area-wide IPM and Pilot-test Programs--$1,000,000
Headquarters, $1,000,000.--Conduct scale-up pest management pilot
tests in support of the ARS Area-wide program and the USDA IPM
Initiative.
Augmentative and Biologically-based IPM in Field, Horticultural and
Vegetable Crops--$2,000,000
Stoneville, $600,000.--Develop mechanical and process engineering
procedures for diet handling and mass propagation of insect and weed
natural enemies, with emphasis on pests such as boll weevil, Heliothis,
and leafy spurge.
Orlando, $600,000.--Develop biological control and other
biorational technologies for control of silverleaf whitefly, Egyptian
mealybug, Thrips palmi, brown citrus aphid, and other emerging pests of
horticultural and nursery crops in the Southeast U.S.
Beltsville, $300,000.--Develop semiochemical-based IPM suppression
systems for Colorado potato beetle and other insect pests of field and
vegetable crops.
Gainesville, $250,000.--Improve diets for mass rearing of parasites
and predators for augmentation biological control of the diamondback
moth, sweetpotato whitefly, and other vegetable pests.
Weslaco, $250,000.--Develop IPM technologies for control of aphids,
beet armyworm, and other secondary pests that limit cotton production
during boll weevil suppression and eradication programs.
Host-Plant Resistance and Pest Management Strategies--$1,000,000
Stoneville, $400,000.--Develop and evaluate management strategies
for resistance of corn earworm and tobacco budworm to Bt in cotton, and
to new transgenic crop resistance factors that may be introduced.
Ames, $300,000.--Develop integrated management strategies for
control of corn insect pests, emphasizing management of resistance of
the European corn borer to Bt and to new transgenic crop resistance
factors that may be introduced.
Raleigh, $300,000.--Develop host-plant resistance strategies for
the management of pathogens in southeastern small grain production
systems.
grazinglands thrust, utilization and conservation--$1,000,000
Systems to Optimize Production & Resource Improvement--$1,000,000
El Reno, $400,000.--Determine impact of pasture design and grazing
animals on quality of water emerging from watersheds, and develop
pasture management systems that will optimize water quality and
productivity in the semi-arid U.S.
Las Cruces, $300,000.--Develop low-input technology for seeding
native grasses and shrubs on rangelands and riparian areas after
control of introduced weeds.
University Park, $300,000.--Determine impact of pasture design and
grazing animals and grazing animals on quality of water emerging from
watersheds and develop pasture management systems that will optimize
water quality and productivity in the humid U.S.
food safety--preharvest and postharvest--$4,114,000
Food Safety--Preharvest--$1,614,000
Ames, $300,000.--Monitor Salmonella isolates from cattle and swine
for S. Typhinurium DT104 and characterize the epidemiology,
transmission and nature of antibiotic resistance of the organism.
Clay Center, $500,000.--Correlate production practices for cattle
and swine with post processing contamination of food products.
College Station, $500,000.--Develop competitive colonization
systems, as have been successfully accomplished for broilers, to
prevent Salmonella and E. Coli 0157:H7 in swine and cattle.
Athens, $314,000.--Delineate the dynamics of campylobactor
transmission in production in order to identify control points and
strategies to limit contamination in poultry.
Food Safety--Postharvest--$2,500,000
Wyndmoor, $400,000.--Develop quantitative data on food pathogen
inactivation and survival needed to evaluate adequacy of processing and
process controls in the production of meat and poultry products and
validate risk assessment.
Wyndmoor, $300,000.--Develop pasteurization requirements for the
thermal destruction of Listeria monocytogenes, Salmonella spp., and
other pathogens in commercially produced egg product blends containing
non-egg products.
Beltsville, $300,000.--Develop advanced inspection methods
utilizing machine vision and electronic databases to increase the
thoroughness and rapidity of individual carcass inspection.
Athens, $600,000.--Develop the necessary detection and enumeration
methods and delineate the dynamics of pathogen transmission in order to
identify control points and strategies to prevent spread of
campylobactor in poultry.
Wyndmoor, $300,000.--Evaluate and optimize various intervention
technologies for use solely, and in combination, to reduce pathogens in
food products of plant origin while retaining their fresh appearance
and high consumer acceptance.
Albany, $300,000.--Evaluate and optimize various intervention
technologies for use solely, and in combination, to reduce pathogens in
food products of plant origin while retaining their fresh appearance
and high consumer acceptance.
Pullman, $300,000.--Prevent production of vomitoxin (DON) in wheat
and barley by developing control strategies utilizing bioengineering to
enhance natural resistance in crops.
genetic resources--$2,000,000
Preservation of Plant and Microbial Genetic Resources--$2,000,000
Ft. Collins, $500,000.--Preservation and methodologies for plant
germplasm.
Beltsville, $400,000.--Research in quarantine, databases, and
ecogeographic studies of plants.
Fresno/Parlier, $400,000.--Regeneration of plant germplasm for the
National Plant Germplasm System (NPGS).
Ft. Collins, $500,000.--Preservation of base collection of
microbial germplasm.
Hilo, $50,000.--Support for Clonal Repository.
Riverside, $50,000.--Support for Clonal Repository.
Davis, $50,000.--Support for Clonal Repository.
Corvallis, $50,000.--Support for Clonal Repository.
human nutrition--$12,000,000
Survey--$6,000,000
Headquarters, $6,000,000.--Survey with EPA, DHHS on food
consumption patterns of infants and children.
Dietary Research--$6,000,000
Beltsville, $1,000,000.--Support Human Nutrition Initiative.
Boston, $1,000,000.--Support Human Nutrition Initiative.
San Francisco, $1,000,000.--Support Human Nutrition Initiative.
Grand Forks, $1,000,000.--Support Human Nutrition Initiative.
Houston, $1,000,000.--Support Human Nutrition Initiative.
Little Rock, $1,000,000.--Support Human Nutrition Initiative.
south florida ecosystem restoration--$2,000,000
Sustainable Agricultural Production Systems of Sugarcane and Other
Crops in South Florida--$1,000,000
Canal Point, FL, $1,000,000.--Identify sugarcane germplasm aimed at
improving sugarcane tolerance to high water tables and determine
agronomic practices that control soil subsidence without reducing
yield; evaluate water quality and quantity effects from producing
sugarcane and other crops under high water table conditions; and
develop hydrologic models that evaluate the operation of agricultural
water management control systems in south Florida.
Biological Control of Melaleuca and Other Exotic Plant Species of
Consequences to Agriculture and the Everglades--$1,000,000
Ft. Lauderdale, $1,000,000.--Accelerate research to identify
biological agents that control melaleuca and other exotic plant
species.
human nutrition research
The largest increase proposed is for Human Nutrition research. Half
the money is to fund a survey of food consumption by infants and
children to be used by EPA to assess dietary exposures and the other
half to support research at ARS' six nutrition centers.
Question. Is the survey of food consumption mandated by law?
Answer. The Food Quality Protection Act of 1996 (FQPA) requires the
Environmental Protection Agency (EPA) to set regulations on the limits
of safe exposure of children to pesticide residues in food based on
statistically valid estimates of dietary intakes as obtained from
nutrition surveys conducted by the Department of Agriculture and the
Department of Health and Human Services. The Department of Agriculture,
through the Agricultural Research Service, conducts the Continuing
Survey of Food Intakes by Individuals (CSFII) that collects dietary
information from respondents of all ages. The current CSFII covers the
period 1994 to 1996 and contains data on dietary intakes of
approximately 5,700 children. The EPA estimates that data from
approximately 10,000 children are needed to predict a safe exposure
limit. Thus, a supplemental survey consisting only of children is
required to meet the requirements of the EPA in response to the FQPA.
Question. Isn't this the same survey that the Congress eliminated
funding for a few years ago because the cost per participant was
excessive?
Answer. Prior to the passage of the FQPA, previous requests for a
dietary survey of children by the former Human Nutrition Information
Service, in response to issues raised by the National Academy of
Science in a report raising concerns about pesticide residues in the
food of children, were not funded by Congress. The difference between
those requests and the current one is the requested survey is a
supplemental survey that provides the EPA with a statistically valid
number of children in each age group when the data are combined with
the funded 1994-1996 Continuing Survey of Food Intakes by Individuals
(CSFII) that was just completed.
Question. What is the justification for increasing support for ARS
research at its six nutrition centers, particularly when it is coming
at the expense of reducing existing agriculture production research?
Answer. The Human Nutrition Research Initiative is intended to
enhance the capacity of the six USDA/ARS Human Nutrition Research
Centers to complement ongoing research with new research approaches to:
(1) define the relationship between diet and the risk of chronic
disease; (2) improve resistance to acute infections and immune
disorders by investigating the interaction between nutrition and immune
function; (3) enhance capacity to promote changes in dietary habits by
basic research; (4) improve the scientific basis for more effective
Federal food assistance programs; (5) extend dietary guidance to
nutritionally-vulnerable groups, such as children, within the U.S.; and
(6) generate a more nutritious food supply by defining the basis for
modifying the health promoting properties of foods and to make
beneficial changes in the consumption of foods. The knowledge to be
obtained from the initiative will enable ARS to better conduct research
related to production agriculture leading to the development of
products that meet the demands of consumers for foods that are health
promoting and nutritious. A major area of ongoing research is product
quality; certainly, for foods and food products, nutritional quality is
an area of increasing emphasis. Furthermore, the much needed
supplemental dietary intake survey of children will provide the EPA
with information upon which sound and responsible regulations
concerning the levels of pesticide residues in foods can be developed.
It is essential to the agricultural producers and processors that the
regulations to be developed are based on accurate dietary intake data
so that the regulations protect the best interests of the consuming
public and at the same time maintain the competitiveness of American
agriculture.
Question. The human nutrition increase is described as the first
year of a multi-year initiative. What increases are contemplated in
each year of this initiative? Do you expect these increases also to
come at the expense of ARS' existing research programs?
Answer. The fiscal year 1998 budget includes a $12M proposed
increase. Follow-up increases of $6M in fiscal year 1999, $12M in
fiscal year 2000, $12M in fiscal year 2001 and $11M in fiscal year 2002
are needed for a total of $53M for the initiative. It is not expected
that the increase will come at the expense of ARS's existing research
programs but will come through increases in appropriations.
emerging diseases
Question. The requested increase for emerging diseases and exotic
pests is for both plant and animal diseases and pests. You are not
specific as to which disease or pest you will allot these funds. Do you
plan to use these funds as flexible or contingency basis or will you
allot them permanently? Please explain.
Answer. ARS plans to allot these funds permanently because
developing adequate control measures for both plant and animal diseases
and pests will require long-term research efforts. The plant diseases
included are: Karnal bunt and head blight (scab) of wheat and the
animal diseases included are: Transmissible Spongiform Encephalopathies
including scrapie, chronic wasting disease and Bovine spongiform
encephalopathy or BSE-type encephalopathies, Avian Influenza, and
velogenic Newcastle disease, hog cholera, porcine reproduction and
respiratory syndrome, Bovine Viral Diarrhea, Johne's disease, and
cryptosporidium and cyclospora. Increased attention to these problems
now will also serve the very important purpose to increase our
scientific capacity and base of expertise to enable us to respond on an
emergency basis to other crop and livestock disease problems that may
arise in the future.
germplasm
Question. Please identify your resources committed to maintaining
plant germplasm repositories. How much is committed to the collection
of plant germplasm and how much is committed to evaluation of your
germplasm?
Answer. The estimated funding for maintaining the ARS plant
germplasm system repositories for fiscal year 1997 is $20,057,900.
Included in this total are: $3,951,700 for collection activities to
include acquisition, quarantine, and taxonomy; and $16,106,200 for
preservation activities, to include germplasm maintenance,
characterization, documentation, storage, and distribution.
Evaluation of germplasm is an activity conducted outside of the
repositories by breeders and other users of germplasm. ARS commits
$19,625,100 to evaluation activities.
Question. What are the State resources committed to the
repositories? Provide a listing of your germplasm repositories.
Answer. State resources committed to the repositories include both
direct commitments and in-kind support to Regional Plant Introduction
Stations (RPIS) and the Interregional (IR) Potato Station. The direct
commitments can be identified and reported more accurately as off-the-
top funding from formula funding through the Regional Directors'
Associations and direct contributions from the host agricultural
experiment stations. Those resources are identified:
------------------------------------------------------------------------
Formula
Location/repository funds Local funds
------------------------------------------------------------------------
Griffin, GA, Southern RPIS.................... $234,800 $350,000
Ames, IA, North Central RPIS.................. 479,000 319,000
Geneva, NY, Northeastern RPIS................. 142,000 156,000
Pullman, WA, Western RPIS..................... 352,000 250,000
Sturgeon Bay, WI, IR Potato Station........... 153,500 118,700
-------------------------
Total................................... 1,371,300 1,193,700
------------------------------------------------------------------------
A listing of the major ARS germplasm repositories is provided for
the record: Davis, CA; Fresno, CA; Riverside, CA; Ft. Collins, CO;
Washington, DC; Miami, FL; Griffin, GA; Hilo, HI; Ames, IA; Aberdeen,
ID; Urbana, IL; Beltsville, MD; Stoneville, MS; Fargo, ND; Geneva, NY;
Corvallis, OR; Mayaguez, PR; College Station, TX; Logan, UT; Pullman,
WA; Madison, WI; and Headquarters.
biocontrol
Question. How much is ARS currently allocating to the biocontrol of
pests?
Answer. Currently, ARS spends $53,769,900 on biologically-based
pest control technologies which includes research on host plant
resistance, classical and augmentative biological control, pheromone
mating disruption, sterile insect release, and other related pest
control strategies.
Question. What is the justification for the $3 million increase
proposed?
Answer. The proposed increase of $3 million for biocontrol of pests
is part of the $4 million requested for research in support of the USDA
Integrated Pest Management (IPM) initiative and will fund additional
research to meet the Department's goal of having 75 percent of the crop
acreage under IPM by the year 2000.
Question. The testimony indicates that of the requested increase,
$1 million is to permit ARS to conduct area-wide and pilot test
programs on ARS-developed technology ready for large-area
demonstrations. What area-wide and pilot test programs are planned?
Answer. Several area-wide pest management programs have already
been initiated by ARS in partnership with the State Agricultural
Experiment Stations. These programs currently address the corn earworm
in the southeast, the codling moth in the pacific west, and corn
rootworm in the Midwest United States. Because of the high success of
these programs thus far, ARS plans to conduct additional programs in
fiscal year 1997 and fiscal year 1998 as a part of the USDA IPM
initiative. A peer review panel met on April 28-29, 1997, to evaluate
and prioritize eight area-wide proposals that were submitted to the
agency in March of 1997. At least one of these proposals will be funded
in fiscal year 1997, with up to two additional proposals planned for
implementation in fiscal year 1998, if new funding is appropriated.
Targets of the eight area-wide pest management candidate programs
include leafy spurge, stored grain insects, corn earworm/tobacco
budworm, Russian wheat aphid, Colorado potato beetle, boll weevil,
silverleaf whitefly, and fruit flies.
Question. What ARS-developed technology will be tested?
Answer. ARS has developed a number of environmentally-friendly pest
control technologies that will be tested against one or more of these
pests. These technologies include traditional biological control with
parasites, predators, and microbial agents; host-plant resistance;
behavior-modifying chemicals, such as pheromone mating disruptors and
attractants; sterile insect release techniques; and cultural practices.
Question. Where will these demonstrations be carried out and what
is the cost of each?
Answer. A final decision as to which program and how many of these
programs ARS will be able to implement has yet to be made. Once this
final decision is made, then candidate sites for demonstration and the
cost of each program will be evaluated. Generally speaking, each of the
5-year area-wide pest management programs cost $1-2 million per year.
food safety research
Question. You are again requesting an increase for food safety
research. How much does ARS currently commit for pre- and post-harvest
food safety research? How are you assisting FSIS?
Answer. ARS currently commits $29,381,200 for pre-harvest and
$20,266,100 for post-harvest food safety research related to the
microbiological contamination of meat and poultry products, for a total
of $49,647,300.
The ARS is assisting the Food Safety and Inspection Service (FSIS)
by conducting research that (1) provides screening or confirmatory
methods for use in FSIS laboratories, such as the development of a
screening and confirmatory method for Campylobacter jejuni, and a rapid
and sensitive PCR molecular biology method for identification of E.
coli 0157:H7, (2) provides information for FSIS use in making
regulatory decisions, such as (a) the modeling of bacterial growth or
thermal death times to help set standards for processed meat products
and (b) the comparison of the use of sponging vs. excision and one vs.
three carcass sites for industry process control of cow/bull and hog
carcasses and (3) provides and/or evaluates technology which can be
approved by FSIS for use in inspected establishments to lower
contamination of meat and poultry, such as steam sterilization of beef
carcasses.
Question. Please identify the current and proposed funding for
pathogen reduction research. Where is this research carried out? What
is the nature of this research?
Answer. Current funding for pathogen reduction research is
$24,952,100. Proposed funding is $28,737,000. This research is carried
out at Albany, CA; Ames, IA; Athens, GA; Beltsville, MD; Clay Center,
NE; College Station, TX; Fayetteville, AR; and Wyndmoor, PA. This
research determines the presence and numbers of specific pathogens in
various environments both on the farm and during slaughter and
processing; develops predictive models of bacterial growth rates and
survival; develops specific pre-harvest and post-harvest controls for
reducing pathogens during production and processing, such as
competitive exclusion, vaccines, isolation rearing and new
antimicrobial agents and processes; determines the attachment
characteristics of various pathogens and develops more rapid methods to
identify infected animals and animal products.
Question. Where will the recommended increase be implemented? How
many scientists will be recruited for this research? How will these
funds be used?
Answer. The recommended increase of $4.1 million will be
implemented at Albany, CA; Ames, IA; Athens, GA; Beltsville, MD; Clay
Center, NE; College Station, TX; Wyndmoor, PA; and Pullman, WA.
Fifteen scientists requiring about $4 million will be recruited for
this effort. The remainder of the funds will be used to supplement and
accelerate existing programs.
These funds will be used to develop: production systems to reduce
human pathogens in food producing animals and poultry, in particular,
Salmonella and Campylobacter; pre-/postharvest intervention strategies
for animal and plant based products; pathogen-reducing slaughter
processes; food pathogen risk assessment technologies; rapid pathogen
diagnostic and detection; advanced inspection methods utilizing machine
vision, pasteurization requirements to destroy pathogen in egg
products; and also to characterize the antibiotic resistance of
specific pathogens found in food producing animals.
Question. Provide the Committee with actual obligations your Agency
incurred in fiscal year 1996 for research on E. coli; salmonella;
listeria and campylobacter. How many scientists were involved in this
research?
Answer. Twenty-six scientists were involved in this research in
fiscal year 1996. The actual obligations ARS incurred are as follows:
Actual obligation
E. coli................................................. $1,226,606
Salmonella.............................................. 5,674,131
Listeria................................................ 33,435
Campylobacter........................................... 869,069
integrated pest management (ipm)
Question. ARS is requesting an increase of $4,000,000 for IPM
research. What research is currently undertaken by ARS and by location?
Provide funding and scientist effort.
Answer. In support of the Department's IPM Initiative, ARS
currently conducts pest control research which includes projects to
develop environmentally-friendly pest control technologies that
emphasize classical and augmentation biological control, host-plant
resistance, behavior modifying chemicals (e.g. pheromone mating
disruptors and attracticides), sterile insect release techniques,
autocidal control technologies, resistance management, cultural
practices, and other related pest control tactics. ARS scientists are
not only working to develop these component IPM technologies but are
also involved with State, regional and local IPM teams in a variety of
action-oriented implementation programs that demonstrate biologically-
based pest control in on-farm situations. In addition, ARS has taken
the lead in demonstrating the use of area-wide IPM tactics. The
information on the location, funding and scientist effort for
consolidated IPM projects currently undertaken by ARS is provided for
the record.
------------------------------------------------------------------------
Fiscal year 1997--
Location ---------------------------
Funds Scientists
------------------------------------------------------------------------
Fresno, CA.................................. $1,009,200 3.4
Salinas, CA................................. 545,600 1.0
Shaftner, CA................................ 230,800 0.8
Ft. Lauderdale, FL.......................... 657,500 3.0
Gainesville, FL............................. 1,338,400 4.8
Miami, FL................................... 460,000 1.3
Byron, GA................................... 123,900 0.3
Tifton, GA.................................. 865,200 2.5
Ames, IA.................................... 56,200 0.3
West Lafayette, IN.......................... 86,400 0.4
Manhattan, KS............................... 193,800 0.8
New Orleans, LA............................. 142,500 0.8
Beltsville, MD.............................. 169,500 0.5
Morris, MN.................................. 265,200 1.0
Stoneville, MS.............................. 2,481,800 8.0
Columbia, MO................................ 90,000 0.4
Lincoln, NE................................. 279,900 1.3
Ithaca, NY.................................. 315,700 1.3
Raleigh, NC................................. 48,300 0.2
Stillwater, OK.............................. 198,100 0.9
Charleston, SC.............................. 534,400 1.5
Brookings, SD............................... 1,101,100 4.5
College Station, TX......................... 898,500 3.7
Kerrville, TX............................... 417,300 1.4
Weslaco, TX................................. 691,300 1.8
Prosser, WA................................. 144,600 0.5
Pullmann, WA................................ 213,100 1.1
Yakima, WA.................................. 2,379,200 3.4
Headquarters................................ 2,606,800 ..........
---------------------------
Total................................. 18,544,300 50.9
------------------------------------------------------------------------
Question. How will the requested funds be implemented?
Answer. Of the $4,000,000 requested, $1,000,000 will be used for
area-wide IPM and pilot-test programs; $2,000,000 will be used for
augmentation biocontrol and biologically-based IPM in field,
horticultural and vegetable crops; and $1,000,000 will be used for
host-plant resistance and related pest management strategies.
Question. Please provide a breakdown of your chemical and non-
chemical research components that fall within the general area of IPM.
Answer. Of the overall figure of $134,236,000, $106,798,700 (80
percent) is devoted to non-chemical research while $27,437,300 (20
percent) is associated with research on chemical pest control
technology. Our research related to chemical technology focuses on
reducing chemical usages and substituting currently used chemicals with
ones that are safer and more environmentally friendly.
contingency fund
Question. You report that you spent $51,967 in 1995 for drydock,
maintenance, marine vessel upgrade. How many vessels does ARS maintain
to support the Plum Island operation? What is the annual cost of
operating these vessels? What has been the cost of maintenance and
upgrade for those vessels since 1990?
Answer. ARS presently maintains three vessels to support the Plum
Island Animal Disease Center. The annual operating costs for these
vessels are $475,000 for staff and $220,000 for fuel.
The cost of repairs and maintenance for fiscal years 1993 to 1997
are as follows:
Fiscal year Funding
1993.......................................................... $215,284
1994.......................................................... 329,783
1995.......................................................... 241,336
1996.......................................................... 403,334
1997.........................................................\1\ 300,000
\1\ Estimate.
The contingency fund expenditure in fiscal year 1995 is included in
the reported total cost for the year. Agency financial records are only
maintained for five years therefore data for 1990-1991 is not
available. In fiscal year 1992, the operations and maintenance contract
under which the boats are operated did not provide these specific
costs.
Question. Contingency Fund releases were provided to Frederick,
Maryland, for TCK Smut and Karnal Bunt. How were these funds used?
Answer. In fiscal year 1996, $187,164 was released to Frederick,
Maryland, and $79,592 was released to Raleigh, North Carolina, for an
ARS/Grain Inspection, Packers, and Stockyards Administration
cooperative study to determine how TCK spores are distributed in wheat
shipments and how that distribution affects reliability of sampling for
TCK smut on wheat detection. Frederick Maryland received $370,893 for
research on karnal bunt disease and to purchase the necessary research
equipment.
performance goals
Question. The most important performance goal listed by ARS is that
dealing with potential long-term benefits to agriculture and American
citizens. However, you provide no indicators or how the Agency could
determine such contributions from its research. Is this a realistic
goal? If so, how will the Agency capture this data and identify it as
an outcome of its research?
Answer. ARS' mission is to conduct research to address and solve
agricultural problems of high national priority. As the ARS Strategic
Planning Team (SPT) worked on the task of identifying measurements for
research outcomes and impacts, they decided to include a measure that
addressed the Agency's central mission by identifying ways for ARS to
capture and report on ``. . . research accomplishments with significant
potential long-term benefits to U.S. agricultural industry and American
society.'' The agency believes that this is a realistic objective. The
mechanism for identifying and reporting these accomplishments will be
an annual review by Research Leaders, the National Program Staff, and
Area Directors in an effort to identify the research products with the
greatest probability of making an important contribution to American
agriculture. This process will be as objective as possible, but it is
not always possible to immediately determine the value, application or
longer term impact of research. ARS intends to identify and report
accomplishments each year in the Agency's annual performance plan.
Question. It appears that numbers of published papers and
presentations are the only goals that ARS could express that lend
themselves to tracking and quantifying. This is similar to tracking the
number of assets and scientists the Agency employs--but not very
meaningful in terms of measurable contributions. Given the effort
involved in the GPRA program, have you concluded that this represents
the only goals and measurements available to judge the merits of your
agency's contributions?
Answer. Shortly after GPRA was enacted, ARS established an agency-
wide Work Group that sought to apply these new programmatic
accountability principals in a research environment. To ascertain how
other research agencies were responding to GPRA, ARS helped initiate
and co-chair the Research Round Table, an ad hoc committee consisting
of the major Federal research agencies. This group met monthly for 18
months in an effort to define and resolve the issues posed in this
question. ARS and its colleagues in REE also met with the research
directors from the food and agricultural industry to learn how these
issues are handled in the private sector. From these discussions, ARS
developed a draft strategic plan that mixed broad qualitative goals and
output measures such as the number of papers published or the number of
new patent applications. Qualitative performance goals can be found
under each Specific Goal and Initiative in the ARS plan. One example of
a qualitative performance goal, taken from Specific Goal 1.2.2 ``New
Uses and Products,'' states that ARS will ``experimentally demonstrate
genetically improved crops with potential for successful
introduction.'' While refereed papers and other outputs are important
measures of productivity, quality, and substance in the scientific
community, they do not, as you indicated in your question meaningfully
measure the contributions of the Agency's research.
What emerged from all these activities and the comments we received
on our draft plans was a clearer picture of just how difficult, if not
impossible, it is to apply metrics to research, especially basic
research. The key points that emerged from this entire process include:
(1) the outcomes and impacts of research are difficult to identify and
quantify in advance, (2) the value and potential application of
knowledge gained is not always immediately recognized and understood,
(3) results are not always predictable, (4) there is a high percentage
of negative determinations or findings, and (5) the unknown cannot be
measured. After much deliberation, we have concluded that the best
approach is to abandon the numerical measures of outputs and rely
instead on qualitative measures in each annual performance plan
describing what the agency expects to produce in a given fiscal year.
This new approach is reflected in the most recent draft of the ARS
strategic plan dated April 21, 1997.
selected examples of progress
Question. Drip irrigation in the Southeast can be profitable. How
new is this technology?
Answer. With the development of plastics during and after World War
II, the idea of drip irrigation became feasible. After a small
irrigation manufacturing firm in New York began to supply the first
drip irrigation equipment to water plants in greenhouses, researchers
in Israel and the United States began to expand their efforts in the
early 1960's. The first commercial-scale, demonstration study occurred
on a grower's avocado orchard in San Diego, California, in 1969.
Question. Isn't this technology being utilized in other regions of
the U.S.?
Answer. Yes. Drip irrigation is used in the Southeast, Southwest,
and West, primarily, to irrigate vegetable, fruit, and vine crops. The
largest usage of drip irrigation systems is in Florida and California,
and about 4 percent of the irrigated land in the United States is
currently being irrigated by this technology.
Question. Explain the potential use of this technology and the
benefit to be derived.
Answer. Historically, the use of drip irrigation technology has
been associated with irrigating high-value crops where soils are
marginal, terrain is steep, and water costs are high. Potential
benefits include reduced water use and cost, improved yields, product
quality, salinity control, and nutrient management; and reduced
evaporative losses and weed growth. Drip irrigation's potential use
becomes an economics decision, balancing the above-noted benefits
against the relatively high initial cost of the hardware, significant
maintenance costs, and increased management requirements.
Question. ARS scientists at Orlando, Weslaco, and Beltsville have
utilized a parasitic wasp to control the brown citrus aphid, boll
weevils, and whiteflies. Is the same wasp being employed in the
research studies at three ARS locations? Explain.
Answer. ARS scientists in Orlando, Weslaco, and Beltsville are each
using different wasp species to respectively control the brown citrus
aphid, boll weevils, and whiteflies. Biological control is the science
of using natural enemies (parasites, pathogens and predators) to
control insect pests using biological rather than chemical means.
Beneficial parasitic wasps, are highly specialized and generally attack
only a single or very few species of insects. This specialization makes
them safe to use as they do not affect humans or most other nontarget
species (including other insects) that are important to agriculture and
the natural environment. Although this is a positive trait for
environmental safety, it also means that research must be conducted on
different parasitic wasps for each major insect pest. ARS scientists
work closely together across geographic locations to identify, develop,
implement and test new biological control technologies. Thus, the
research at Orlando, Weslaco and Beltsville, although unique in some
ways, employ integrated information and activities to assist one
another in solving severe pest problems such as the brown citrus aphid,
boll weevil and silverleaf whitefly.
Question. What is the relationship between the scientific studies
on the parasitic wasp on whitefly and the irrigation work on whiteflies
in cotton at Phoenix, Arizona?
Answer. ARS scientists at Phoenix, Arizona, have determined that
irrigation patterns affect the attractiveness of the cotton crop to
adult whiteflies. Water stressed plants are more attractive to these
adults and thus receive more eggs than greener more highly irrigated
plants. Although no direct effects have yet been measured on parasitic
wasps, ARS scientists in Phoenix believe that the more highly irrigated
cotton would have lower whitefly numbers and thus would be sprayed less
with chemical insecticides. Fewer chemical insecticides mean a more
positive environment for parasitic wasps allowing wasp numbers to
increase more than in similar pesticide treated areas. ARS scientists
studying parasitic wasps in other locations have found that increased
nitrogen fertilizer which stimulates plant growth also affects the
attractiveness of these plants to whitefly adults. ARS scientists are
linking these findings together through an ARS led ``Silverleaf
Whitefly: 5-Year National Research and Action Plan''.
Question. What is the coordination and relationship of these
studies and the studies on cotton insects at your Gainesville
laboratory investigating plant emissions to attract beneficial insects?
Answer. ARS conducts research on parasitic wasps affecting
whiteflies at several different locations including, Beltsville, MD;
Montpellier, France; Orlando, FL; Phoenix, AZ; and Weslaco, TX. These
programs are coordinated within the Agency by the ARS National Program
Staff, and with other state and federal institutions through an ARS led
``Silverleaf Whitefly: 5-Year Research and Action Plan''. Although the
ARS scientists in Gainesville, FL are investigating parasitic wasps
that attack caterpillars rather than whiteflies, they have found that
plants under stress by defoliating caterpillars cause cotton to produce
volatile chemicals that attract certain parasitic wasps that then
search these plants for damaging caterpillar pests. Currently, this
research is investigating basic aspects of plant, pest and parasite
interactions. The long term goal of this work is the manipulation of
these interactions to better manage parasitic wasps by controlling
their behavior through plant characteristics that may be enhanced
through plant breeding or genetic engineering. Through the ARS National
Program on ``Crop and Commodity Pest Biology, Control and Quarantine'',
studies of this type are integrated by the ARS National Program Staff
into sets of nationally organized activities to accelerate the
development and application of many different types of biologically-
based pest control efforts.
Question. ARS has discovered a new class of insect repellent,
Piperidine. Does ARS have a CRADA for commercial development?
Answer. ARS does not have a CRADA for the commercial development of
Piperidine. Piperidine, a natural repellent of insects, is being
evaluated as a component of fire ant baits. It is expected that by
incorporating Piperidine into our proprietary fire ant baits, ant
species we do not want attracted to the bait will be repelled. It seems
that fire ants themselves use Piperidine to repel other ant species
from their food and nests. ARS has a Memorandum of Understanding with
the University of Brussels, Belgium, to produce Piperidine, which must
be synthesized in a laboratory, for ARS' use. Additional studies are
rapidly progressing and ARS hopes to identify a commercial partner
before the end of the year.
Question. Irradiation of blueberries is a proposed alternative to
methyl bromide. How will acceptance of this quarantine treatment
enhance U.S. and foreign markets? Is this procedure acceptable to the
market place? Is this an effective substitute for methyl bromide? What
other commodities are subject to this treatment?
Answer. Some countries that import U.S.-produced blueberries
require a methyl bromide fumigation treatment to kill quarantined
insect pests that might be present in the commodity. Methyl bromide
will not be available for use in the U.S. after January 1, 2001. The
short shelf life and delicate nature of blueberries limits options for
replacing methyl bromide. Irradiation is a promising methyl bromide
alternative to disinfest blueberries with minimal phytotoxic effects.
Acceptance of this treatment will allow continued shipment of
blueberries to countries currently requiring methyl bromide fumigation.
Radiation is approved for food use in many countries. Recent tests
of Hawaiian commodities and Florida strawberries marketed in the U.S.
showed wide acceptance by consumers. Consumers are likely to become
even more comfortable with this technology with the publication of new
regulations allowing radiation to treat chicken and other meats and as
a fruit fly quarantine treatment.
Many commodities, including spices and grains are irradiated in
many countries. The U.S. is publishing regulations to allow irradiation
of various animal products to ensure microbial decontamination and of
fruits and vegetables to disinfest fruit flies. As methyl bromide is
phased out in many countries around the world in the next several
years, there will be an increased reliance on radiation as a quarantine
treatment to replace methyl bromide for many commodities.
Question. Describe the utilization and cost benefits U.S. cotton
farmers are realizing through the use of the GOSSYM-COMAX cotton model.
How many farmers are employing this model and what are the total
estimated savings from its application?
Answer. Over 500 producers have licensed GOSSYM-COMAX since 1986
and over 200 growers have recently renewed their licenses or are new
buyers of licenses, while the number of producers currently using old
versions of the model are unknown. In addition to individual farmers,
about 50 consultants use GC. They consider the number of clients
serviced to be proprietary information. According to a commissioned
report by Dr. Howard Ladewig, Texas A&M University, farmers across the
cotton belt who have not licensed GOSSYM-COMAX (GC) are benefiting from
this technology's principles in a number of ways:
--60 percent of all cotton growers are using plant mapping, a
practice that was introduced by GC.
--54 percent of GC users have modified their irrigation schedules.
--76 percent of GC users have modified their nitrogen fertilization
rates.
--47 percent of GC users pay more attention to early-season insect
damage.
--29 percent of GC users have reduced their production costs.
--57 percent of GC users have increased cotton yields.
Net income increase was found by Dr. Ladewig to average $45 per
acre per year, as determined by the growers.
Dr. Ladewig also estimated that about $187 million has been the
total financial benefit of GC to date.
national agricultural library
Question. The National Agricultural Library supports information
centers including the Rural Information Center, Water Quality
Information Center, Animal Welfare Information Center, Technology
Transfer Information Center, Plant Genome Information Center, Food and
Nutrition Information Center, and the Biotechnology Information Center.
What are the resources currently committed to these programs in each of
fiscal years 1996-98?
Answer. The appropriated resources committed for the Information
Centers for the three fiscal years are provided below.
----------------------------------------------------------------------------------------------------------------
Fiscal year--
-----------------------------------------------
Information center 1997 1998
1996 (actual) (budgeted) (estimated)
----------------------------------------------------------------------------------------------------------------
Rural........................................................... $411,540 $393,000 $403,485
Water quality................................................... 233,708 232,000 237,107
Animal welfare.................................................. 708,076 711,000 720,825
Technology transfer............................................. 245,096 230,000 231,636
Plant Genome.................................................... 1,448,668 1,383,000 1,383,000
Food and Nutrition.............................................. 705,466 688,000 680,331
Biotechnology................................................... 182,340 165,000 130,748
----------------------------------------------------------------------------------------------------------------
Question. Provide the NAL appropriations and staff year levels for
fiscal years 1996, 1997, and 1998.
Answer. The NAL appropriations levels for fiscal years 1996, 1997,
and 1998 are $19,464,000, $19,319,000, and $19,394,000 respectively.
The staff year levels for fiscal years 1996, 1997, and 1998 are 209,
201, and 196 respectively.
organization of nal
Question. Briefly describe the major organizational components of
the NAL and provide respective funding and staffing levels in each of
fiscal years 1996-1998.
Answer. NAL has 4 major organizational components:
The Office of the Director (OD) provides leadership, general
support, and building services.
The Technical Services Division (TSD) selects and acquires
information resources for the collection and provides bibliographic and
subject access to that literature.
The Public Services Division (PSD) facilitates access to the
information and materials needed by researchers, scientists, educators,
administrators and the general public through a variety of general and
specialized information services, document delivery services, and
instructional programs.
The Information Systems Division (ISD) is responsible for the
automation activities of NAL.
The funding and staffing levels for each component (including
repair and maintenance funding) follow:
----------------------------------------------------------------------------------------------------------------
Fiscal year 1996 (actual) Fiscal year 1997 Fiscal year 1998
--------------------------- (budgeted) (estimated)
-----------------------------------------------------
Funding Staffing Funding Staffing Funding Staffing
----------------------------------------------------------------------------------------------------------------
OD............................. $4,310,701 13 $3,074,000 15 $3,086,000 13
TSD............................ 6,629,073 82 6,971,000 82 6,998,000 82
PSD............................ 6,114,802 76 6,457,000 74 6,482,000 72
ISD............................ 3,831,919 24 2,817,000 30 2,828,000 29
--------------------------------------------------------------------------------
Total.................... 20,886,495 195 19,319,000 201 19,394,000 196
----------------------------------------------------------------------------------------------------------------
national agricultural library object classification
Question. Provide a breakdown of NAL's 1996 obligations by object
classification for fiscal years 1996-98.
Answer. The object classification table for the National
Agricultural Library for fiscal years 1996-98 is provided for the
record.
------------------------------------------------------------------------
Fiscal year--
Object ----------------------------------------
classification 1997 1998 budget
1996 actual appropriation estimate
------------------------------------------------------------------------
Personnel Compensation
1Permanent positions $7,782 $8,162 $8,192
1Positions other than 258 270 271
permanent
1Other personnel 88 92 92
compensation
------------------------------------------
Total, Personnel 8,128 8,524 8,555
Compensation
1Personnel benefits: 1,619 1,699 1,706
civilian retirement
1Former employees 18 ............. ...........
------------------------------------------
Total, Object 9,765 10,223 10,261
Classes 11-13
==========================================
Other Obligations
2Travel and 132 108 108
transportation of
persons
2Transportation of things 91 75 75
2Comm., util, other rents 739 605 605
2Printing and 110 90 90
reproduction
2Other services 2,163 1,768 1,805
2Purchases of goods and 62 51 51
services
2Operations and 1,928 1,577 1,577
maintenance of facil
2Research and development 1,310 1,072 1,072
contracts
2Operations and 150 122 122
maintenance of equip
2Subsistence and support 6 5 5
of persons
2Supplies and materials 1,259 1,030 1,030
3Equipment 2,481 2,029 2,029
4Grants, subsidies and 690 564 564
contributions
------------------------------------------
Subtotal, All 11,121 9,096 9,133
Other
------------------------------------------
Total 20,886 19,319 19,394
------------------------------------------------------------------------
Question. What is the annual maintenance cost of the Beltsville NAL
facility for each of fiscal years 1996-1998?
Answer. The annual maintenance costs include NAL's Repair and
Maintenance budget as well as contracts for building maintenance
activities such as cleaning, an elevator repair contract, and other
similar activities. The total maintenance costs for fiscal years 1996-
98 were: 1996--$1,358,700 (actual); 1997--$1,333,000 (budgeted); and
1998--$1,346,000 (estimated).
Question. Identify funding by agency that NAL receives from Federal
and non-federal sources.
Answer. The funding by agency that NAL receives from Federal and
non-federal sources is provided in the table below:
NAL Federal funding:
Office of the Secretary................................... $32,114
Agricultural Marketing Service............................ 45,195
Animal Plant Health Inspection Service.................... 65,862
Cooperative State Research, Education, and Extension
Service................................................. 270,157
Economic Research Service................................. 76,500
Food and Consumer Service................................. 405,950
Forest Service............................................ 40,805
Office of Operations...................................... 2,103
Natural Resources Conservation Service.................... 53,387
Foreign Agricultural Service.............................. 23,857
Grain, Inspection, Packers and Stockyards Administration.. 4,106
Rural Development......................................... 125,053
Office of the Inspector General........................... 1,949
Food Safety and Inspection Service........................ 107,647
Farm Service Agency....................................... 65,689
National Bureau of Standards.............................. 6,000
Food and Drug Administration.............................. 30,000
National Institutes of Health............................. 692,370
National Institute of Mental Health....................... 12,500
Department of Justice..................................... 30,000
National Finance Center................................... 2,147
National Agricultural Statistics Services................. 12,500
--------------------------------------------------------------
____________________________________________________
Total, NAL Federal funding.............................. 2,105,891
==============================================================
____________________________________________________
NAL non-Federal funding:
University of Mississippi................................. 43,000
Virginia Polytechnic Institute and State University....... 16,000
National Rural Electric Cooperative Association........... 7,028
--------------------------------------------------------------
____________________________________________________
Total, NAL non-Federal funding.......................... 66,028
==============================================================
____________________________________________________
Total, NAL funding...................................... 2,171,919
Question. Identify the services NAL provides other agencies through
reimbursable agreements.
Answer. NAL provides three types of services that other agencies
fund via reimbursable agreements. (1) Through the Current Awareness
Literature Services (CALS), NAL provides USDA researchers ongoing
literature searches through a centralized electronic database. (2) NAL
also arranges Dunn and Bradstreet financial database services that
provide USDA agencies with business and financial reports. (3)
Additional reimbursable arrangements make it possible for NAL to
provide specialized information services that support other agencies.
The Rural Information Center, for example, provides information and
referral services to local government officials, community
organizations, health professionals and organizations, rural electric
and telephone cooperatives, libraries, businesses, and rural citizens
working to maintain the vitality of America's rural areas. Through a
separate reimbursable agreement, the Alternative Farming Systems
Information Center operates the Sustainable Agricultural Network which
fosters the exchange of scientific and practical information on
sustainable agricultural systems.
Question. Agricultural Genomes Information System. ARS also
maintains the GRIN system. How do these two systems differ? Why are
they managed separately?
Answer. The Agricultural Genomes Information System (AGIS) and the
Germplasm Resources Information Network (GRIN) differ by being
designed, at least initially, to serve somewhat different groups of
users, to play different information management roles, and to address
different objectives. Because of the generally substantial differences
in the preceding factors, the databases were developed and are managed
separately but contain appropriate links between the genomic and
germplasm data.
The GRIN was developed primarily to play two central roles in
managing germplasm and associated information. First, it is the means
whereby germplasm managers of the National Plant Germplasm System
(NPGS) manage the local inventory of information, seeds, and plants
conserved at various NPGS sites. For example, it is used to record
requests for germplasm accessions, to keep a running tally of the
number of seeds, clones, available per accession, etc. It also serves
as an archive for the results of seed quality assays, the ambient
experimental conditions during germplasm production, and similar
information. The preceding uses require that a variety of standard and
nonstandard reports be generated periodically from the GRIN database by
a variety of germplasm managers. In general, the segments of GRIN
devoted to inventory management are only accessible to NPGS germplasm
managers.
Second, GRIN is designed to help encourage the use of genetic
diversity, in the form of germplasm, in crop improvement and in
scientific research. An extremely wide variety of information is
available on GRIN for germplasm accessions, because the user community
is extremely broad, ranging from plant scientists and breeders, to
educators and students, to crop producers. The information entered into
GRIN emphasizes traits that are often immediately useful for crop
production and improvement, such as yield, adaptation, and resistance
to biotic or abiotic stresses. Often, the genetic basis of the
preceding traits is unknown, or may be irrelevant for effectively
deploying the traits for certain applications.
In contrast to GRIN, AGIS is designed primarily to make information
relevant to plant genome research readily available in useful formats.
The primary clientele for AGIS is the biological research community,
especially plant geneticists.
There are also substantial technical differences between the
systems. For example, they were constructed with somewhat different
software, with the GRIN now being based on the industry-standard
Oracle. AGIS is Unix-based, and constituent crop-specific genome
databases in AGIS have been constructed with ACeDB or with Sybase (the
maize genome database) software. The database structures of GRIN and
AGIS--the electronic arrangement of the data--are different, with GRIN
generally arranged around the germplasm accession as the central,
unifying element, with accession attributes, such as physical location,
being extremely important descriptors. In contrast, the constituent
crop-specific databases of AGIS focus on specific genes and their
locations on the genome as the unifying database structural elements.
Despite their differences, various elements of the two separate
database systems are now linked electronically via the World-Wide-Web
(WWW). In the future, it is anticipated that additional components of
the two systems will be similarly linked. Nonetheless, it is likely
that the two database systems will remain separate entities in the
future, because of the intrinsic factors noted above.
national preservation program
Question. NAL established a Preservation Officer position. How many
staff years are employed in this effort?
Answer. The equivalent of four staff years are employed in the NAL
preservation effort.
Question. How much money does NAL spend in contracting for
preservation workload?
Answer. NAL is spending $215,000 in fiscal year 1997 on contracts
and cooperative agreements to obtain a variety of preservation services
and products.
Question. What does the Agency envision this effort costing on an
annual basis?
Answer. NAL envisions that a fully implemented ongoing preservation
effort would cost more than $2 million per year.
Question. Please explain, in more detail, the National Preservation
Program for Agricultural Sciences.
Answer. NAL has established a national preservation program for
agricultural sciences in conjunction with the United States
Agricultural Information Network. The National Preservation Plan for
Agricultural Literature is a discipline-based approach to creating a
distributed system for preserving agricultural literature. The Plan
calls for each state in the U.S. to take responsibility for
preservation of its own state and local agricultural literature. This
will result in the systematic identification of the universe of state
and local level published literature. NAL's role in the Plan is to
focus on federal publications, rare books, manuscripts and other
uniquely held materials.
performance measures and goals
Under the outcomes listed by ARS, NAL will receive and handle
customer requests within established timeframes: deliver of documents,
95 percent; and library research (references), 95 percent.
Question. Who are the clientele of the Library?
Answer. The clientele of the Library includes members of Congress
and their staff; Federal administrators and managers; state and local
officials of government; agricultural program administrators,
scientists, engineers, and researchers; extension personnel; educators;
employees of agriculturally-related businesses and industries; students
and scholars; consumers and the general public.
Question. How many types of electronic and hard copy delivery
systems are in place?
Answer. NAL delivers both publications and reference services, and
different delivery systems are appropriate in each case. For
distributing publications, two electronic systems are used. One system
is via telefacsimile, and the other utilizes the Ariel System. Ariel
involves the use of a document delivery software to deliver
publications over the Internet. Hardcopy documents are generally sent
by U.S. mail, although rush delivery is sometimes arranged by other
carriers.
For the delivery of reference services, all the common methods of
communication are employed. Electronic means include electronic mail,
telefacsimile and telephone. Other reference requests are answered via
the U.S. mail. Reference information of general use to NAL clientele
are available 24 hours a day via the World Wide Web on the Internet.
Question. How will you document efforts to achieve these goals?
Answer. NAL periodically samples workflow to ensure prompt document
delivery and reference services for customers. Based on a comparison of
data from before and after the designated period we will be able to
document progress toward these goals.
Question. How will you distinguish performance achievement among
these goals?
Answer. NAL will distinguish performance achievement among these
goals by comparing data from before and after the designated period.
buildings and facilities
NAL completed a facility study in 1991 that identified numerous
code, mechanical, electrical and architectural deficiencies estimated
at $18 million.
Question. Please list the deficiencies and costs identified in this
study.
Answer. In general the deficiencies and costs can be categorized
into three major areas of work: architectural, mechanical/plumbing, and
electrical. The types of deficiencies and associated estimated costs
are as follows:
Architectural deficiencies include items such as deteriorating
brick; exterior glazing leaks; egress requirements; fire code
deficiencies; accessibility issues; and other items of this type. The
estimated cost to correct these deficiencies is $4.7 million.
Mechanical/plumbing deficiencies include items such as lack of
sprinkler system; insufficient cooling capacity; lack of temperature
and humidity control; poor air circulation; lack of vacuum breakers on
hose bibbs; worn out water control valves; and other miscellaneous
items. The estimated cost to correct these deficiencies is $10.2
million.
Electrical deficiencies include items such as improper lighting
levels; insufficient emergency power system; branch circuit wiring
devices in disrepair; insufficient lightning protection system; and
other miscellaneous items. The estimated cost to correct these
deficiencies is $3.1 million.
The $18 million estimate is based on constant 1998 dollars. The
total program cost will increase depending on how much is appropriated
each year and the corresponding rate of inflation.
Question. Why has NAL waited until fiscal year 1998 to request
funding for these deficiencies?
Answer. When the facility study was completed in late fiscal year
1991, the NAL Director worked with USDA building engineers to analyze
and prioritize the recommendations. Some existing funds were used to
begin addressing the highest priority deficiencies, and the 1991 study
has been used since its receipt as justification for increased
building-related appropriations. In fiscal year 1992, NAL did receive a
small increase in its annual Repair and Maintenance budget.
Question. How many phases will be involved in correcting facility
deficiencies and adding storage space?
Answer. The number of phases to correct facility deficiencies and
add storage space is dependent on both funding and impact to library
services.
Question. How much will each phase cost and what work will be
accomplished?
Answer. Due to uncertainty regarding future funding levels, the
Agency has not developed a firm phasing plan beyond Phase 1. Phase 1
will address the replacement of boilers, renovations to the first,
third, fourth, and fifth floors, and installation of sprinklers. It is
estimated at $6 million.
Question. You state that in addition to these facility
deficiencies, NAL needs to acquire additional storage space. How do you
plan to do this?
Answer. NAL plans to acquire additional storage space through more
efficient use of its existing space. Current plans call for returning
the fifth floor to a stack floor and relocating the staff currently
located on the fifth floor to floors one, three, and four.
Question. What is the cost involved for added space?
Answer. It is not expected that there will be any significant cost
increase for this work since most of the work required would have been
needed to address the facility deficiencies.
Question. Is this cost part of the original study?
Answer. The cost for added space was not directly identified in the
original study, however, addressing the architectural, mechanical/
plumbing, and electrical deficiencies will require extensive tear out
of existing finishes. It will be during the repair of these disturbed
areas that staff consolidation can be accommodated.
In addition to the Facility Condition Study, the NAL also
commissioned a space utilization study in 1990/1991 to investigate how
best to meet competing space needs for the staff, the collection, and
library users. As a result of that study, it became clear that NAL
needed more space for collections.
Question. NAL has annual funding appropriated for building repairs.
How will these funds be used in defraying these costs?
Answer. NAL has available $900,000 per year in repair and
maintenance funds. Much of this funding goes to immediate repair and
maintenance needs not necessarily related to the major facility
deficiencies being addressed in this effort. An additional problem is
the repair and maintenance funds are annual appropriations, therefore,
they cannot be used to supplement the Buildings and Facilities
appropriations.
Question. Detail your plans and costs in conjunction with the
overall $18 million.
Answer. Because of the uncertainty regarding what immediate repair
and maintenance demands may be made on the annual repair and
maintenance account from year to year, and the difference in type of
funds, no plans have been developed addressing how these repair and
maintenance funds could supplement the Building and Facility request.
The $18 million cost estimate is based on 1998 dollars. The total
program cost will increase depending on how much is appropriated each
year and the corresponding rate of inflation.
Question. The justification for $18 million ``in 1998 dollars'' is
tied to the comprehensive Facility Condition Study. This study refers
to deficiencies. The request for 1998 includes First Floor Alterations.
Were these alterations also included in this study?
Answer. These alterations were not specifically included in the
Facility Condition Study.
Question. Are alterations requested outside this study, and if so,
please detail for the Committee your request?
Answer. In addition to the Facility Condition Study, the NAL also
commissioned a space utilization study in 1990/1991 to investigate how
best to meet competing space needs for the staff, the collection, and
library users. As a result of that study, it became clear that NAL
needed more space for collections. It was determined that the most
cost-effective approach to the storage issue was to return the fifth
floor, originally designed for book storage and subsequently modified
for staff use, back to book storage and relocate the personnel
currently occupying the fifth floor to floors one, three, and four.
Question. How much of the $18 million is planned for alterations?
Answer. Correcting the numerous facility deficiencies will require
demolishing existing facility components to access the underlying
utilities. The additional cost of alterations required to accommodate
personnel displaced from the fifth floor is not expected to
significantly increase the cost of correcting facility deficiencies
beyond the $18 million estimate.
Question. Funds are requested to alter existing space. Please
provide for the Committee the current utilization of NAL space and
planned use for this space.
Answer. The current and planned utilization of NAL space (exclusive
of mechanical areas) is as follows:
------------------------------------------------------------------------
Approximate percent of
space usage
Purpose -------------------------
Current Planned
------------------------------------------------------------------------
Office space.................................. 38 33
Collections................................... 53 59
Public areas.................................. 9 8
------------------------------------------------------------------------
Question. What areas need to be modified?
Answer. In order to increase the space available for collection
growth, it is necessary to reduce slightly the office space and public
areas.
object class
Question. The actual full-time equivalents for 1994, 1995 and 1996
are well below the Agency's authorized ceiling for those years. What is
the cause for underutilization of your work force?
Answer. The fiscal year 1995 budget proposed closure of 20 research
locations. Hiring during fiscal year 1994 was curtailed and vacancies
were held open to provide maximum placement opportunities for affected
employees. Although final congressional action directed the closure of
only 10 locations and 2 programs, the locations which did not close
began the year with a significant number of vacancies. In addition, in
fiscal year 1995 there was a freeze placed on all hires outside of USDA
and personnel actions were frozen on grade 13-15 positions. These
actions caused the agency to begin fiscal year 1995 with a large number
of vacancies. Early retirement was also offered to eligible employees
in fiscal years 1994 and 1995 to comply with the Administration's
streamlining initiatives. This action produced additional vacancies and
further reduced full-time equivalents (FTE) usage below ceiling levels.
ARS is now moving toward aggressively to recruit new personnel to fill
existing vacancies but is experiencing a significant lag problem and
new offsets due to continuing retirement attrition.
Question. Please provide a detailed breakdown of your equipment
purchases in fiscal year 1996. Please distinguish scientific or
laboratory equipment purchases, computer and related costs and other
major purchases for the Committee.
Answer. A detailed breakdown of ARS equipment purchases for fiscal
year 1996 is provided for the record. The information follows:
Fiscal year 1996
Object Class 31 Equipment actual
Research Equipment such as: Atomicabsorbtion
Spectrophotometer, Bicemek 2000 Laboratory
Automatic, Accelerated Solvent Extractor, Gas
Chromatograph Laboratory Casework and Fumehoods,
Hewlett Packard Benchton, 6 Incubators, Near Infra
Red Instruments, and other scientific equipment..... $6,871,545
Furniture and Fixtures.................................. 303,735
Laboratory Equipment such as: Laboratory Casework and
Fumehoods, Autoclaves, Columns, High Pressure Liquid
Chromatograph Ultracentrocentrafuses, and other
similar lab equipment............................... 13,097,007
Snow Telemetry Equipment................................ 1,376
Engineering Equipment................................... 58,788
Radio and Communications................................ 110,672
Agricultural Machinery and Equipment (includes heavy
vehicles such as pickup trucks and tractors)........ 622,954
--------------------------------------------------------
____________________________________________________
Subtotal.......................................... 21,066,077
ADP Software, Personal Computers........................ 4,451,225
Motor Vehicles, Working Capital Fund Fleet Equipment.... 1,264,115
All Other Equipment: Telephone, office machines,
reproduction machines, etc.......................... 9,878,830
--------------------------------------------------------
____________________________________________________
Subtotal.......................................... 36,660,247
Buildings and Facilities Account........................ 400,000
--------------------------------------------------------
____________________________________________________
Total............................................. 37,060,247
Question. How much money was obligated for consultant services in
fiscal year 1996?
Answer. There were no funds obligated for consultant services under
5 U.S.C. 3109 in fiscal year 1996.
Question. Please provide a detailed breakdown of obligations
incurred in fiscal year 1996 in the area of ``Other Services'':
contracts for research services, contracts for administrative services,
etc.
Answer. Provided is a detailed breakdown of obligations incurred in
fiscal year 1996 in the area of ``Other Services'': contracts for
research services, contracts for administrative services, etc.
Other services
Fiscal year 1996
Research and Development Contracts:
Service Contracts................................... $26,705,209
Research Contracts.................................. 17,577,024
Research Support Agreements......................... 26,494,290
Interagency Agreements.............................. 7,356,339
Specific Cooperative Agreements w/State Institutions 20,246,792
Specific Cooperative Agreements w/Private
Corporations and Institutions..................... 2,391,926
General Cooperative Agreements...................... 11,491,518
Advisory and Assistance Services from Non-
Governmental Sources.............................. 1,192,000
Contractual Services for: Auditing, Stenographic
Services, Training, Reimbursable Details, Fees,
Health Units and Related Activities................. 6,523,126
Purchase of Services from USDA Account: NFC Processing/
Greenbook Costs, Video and Film Services, ADP Data
Processing Services and Related Services............ 2,916,194
Operation and Maintenance of Facilities: Contracts,
Including Government-Owned Contractor-Operated
Facilities, and Services Contracts and Routine
Repair, Upkeep of Land, and Maintenance of
Facilities, and A-76 Contractual Services........... 20,828,308
Operation and Maintenance of Equipment: Maintenance of
Motor Vehicles, Office Equipment, Telephones, ADP
Software, Other General Type Equipment.............. 9,121,296
Subsistence and Support of Persons...................... 923,936
Medical Care (Clinical/Services)........................ 185,592
--------------------------------------------------------
____________________________________________________
Subtotal, Other Services.......................... 153,953,550
Building and Facilities Contracts....................... 20,985,000
--------------------------------------------------------
____________________________________________________
Total, All Other Services......................... 174,938,550
Question. Provide a breakdown of the costs associated with
``Personnel Benefits'' in fiscal year 1996.
Answer. A breakdown of costs associated with ``Personnel Benefits''
in fiscal year 1996 is provided for the record. The information
follows:
Fiscal year
1996 actual
Personnel benefits (In thousands)
Contribution to CSRS.......................................... $12,313
(Number of Employees)..................................... (3,127)
Contribution to FERS (Includes Thrift Savings Plan)........... 29,498
(Number of Employees)..................................... (4,186)
Health Insurance.............................................. 17,368
Life Insurance................................................ 618
Workmen's Compensation........................................ 2,790
Quarters Allowance............................................ 1,021
Other costs, e.g. FICA, Medicare.............................. 6,780
--------------------------------------------------------------
____________________________________________________
Subtotal Benefits....................................... 70,388
Former employees.............................................. 434
--------------------------------------------------------------
____________________________________________________
Total, Personnel Benefits............................... 70,822
funds and research management
Question. Again in fiscal year 1996 as in fiscal year 1995, ARS was
under its personnel ceiling by a significant 300 full-time equivalents.
How much money budgeted for compensation for these positions was saved
by your Agency?
Answer. A total of $12.4 million was saved due to ARS being below
ceiling.
Question. What was done with these savings?
Answer. A portion of these savings accrued to Headquarters and were
reallocated as follows:
Fiscal year
1996 funds
Use of funds (In thousands)
Area-Wide Priorities(Research Equipment and Other High Cost
Needs).................................................... $2,193.9
Location Closures, Conversions, and Transfers................. 2,299.5
Remedial Investigation and Feasibility Study (Beltsville, MD). 1,400.2
ADP and Other Infrastructure Upgrades......................... 1,147.9
Removal Actions (Hazardous Waste Material).................... 436.9
RCRA Closure Sites (Greenport, NY)............................ 360.0
SES Relocations............................................... 309.5
Roof Repairs (Beltsville, MD)................................. 275.8
Oil Spill (Orient Point, NY).................................. 164.6
Summer Intern Program......................................... 118.0
USDA Liaison Program.......................................... 100.0
ESA Phase II Sampling (El Reno, OK)........................... 70.0
Agency-Wide Hazardous Waste Cleanup........................... 68.4
--------------------------------------------------------------
____________________________________________________
Subtotal...............................................\1\ 8,944.7
\1\ The balance of accrued lapsed salaries was retained at ARS field
locations for locally-based spending decision. The primary uses of these
funds were for research equipment, employee relocations, facilities
repair and maintenance, safety and health improvements, and
unanticipated operating needs.
Question. To what extent were these funds obligated at the
locations where they were saved?
Answer. Approximately, 40 percent of the funds saved were obligated
at the locations where they were saved. The remaining 60 percent was
used for Agency priorities not necessarily at the location where the
funds were saved. An example of this would be the funding provided for
location closures; no savings occurred at these locations, however,
funds were obligated at these sites for closure costs.
Question. How many active projects does ARS currently engage?
Answer. 1200 individual research projects are in progress at this
time.
Question. How many scientists are currently on-board?
Answer. There are currently 1,810 permanent scientists on-board in
ARS as of April 29, 1997. Additionally, ARS employs a variable number
of temporary scientists or post-docs on 2 to 4 year appointments. The
current number of post-doctoral scientists is 312.
extramural funding
Question. Please list the funding ARS commits to Land Grant
Universities. Please identify these amounts by recipient.
Answer. A list of funding committed to 1890 Land Grant Universities
follows:
School Fiscal year 1996
Alabama Agri and Mech College........................... $12,500
Alcorn State (MS)....................................... 488,300
Auburn University....................................... 71,000
Clemson University...................................... 41,000
Colorado State University............................... 609,500
Cornell University...................................... 734,400
Florida Agri and Mech University........................ 5,100
Iowa State University................................... 143,000
Kansas State University................................. 274,700
Louisiana State University.............................. 146,700
Michigan State University............................... 250,700
Mississippi State University............................ 1,080,700
Montana State University................................ 874,500
New Mexico State University............................. 687,400
North Carolina State University......................... 976,300
North Dakota State University........................... 215,600
Ohio State University................................... 343,800
Oklahoma State University............................... 144,500
Oregon State University................................. 479,400
Pennsylvania State University........................... 87,600
Purdue University....................................... 708,800
Rutgers University...................................... 98,200
Southern University..................................... 340,900
Texas A&M University.................................... 1,064,500
Univ of Alaska.......................................... 6,000
Univ of Arizona......................................... 309,100
Univ of Arkansas........................................ 456,700
Univ of California...................................... 2,247,000
Univ of Connecticut..................................... 80,000
Univ of Delaware........................................ 4,500
Univ of Florida......................................... 1,603,700
Univ of Georgia......................................... 377,500
Univ of Hawaii.......................................... 1,507,300
Univ of Idaho........................................... 162,400
Univ of Illinois........................................ 470,700
Univ of Maryland........................................ 784,200
Univ of Massachusetts................................... 10,000
Univ of Minnesota....................................... 435,200
Univ of Missouri........................................ 685,800
Univ of Nebraska........................................ 749,500
Univ of Tennessee....................................... 149,900
Univ of Vermont......................................... 45,000
Univ of Wisconsin....................................... 720,900
Univ of Wyoming......................................... 48,700
Utah State University................................... 156,000
Virginia Polytechnic Institute and State Univ........... 100,000
Washington State University............................. 859,300
--------------------------------------------------------
____________________________________________________
Totals............................................ 21,848,500
Question. Please identify other extramural recipients of ARS
research contracts.
Answer. In fiscal year 1996 ARS committed $11.77 million to Tufts
University and $4.22 million to Westat Inc. for research contracts.
Question. In fiscal year 1997, the Committee directed that general
reductions be taken across each program, project and activity. What was
the magnitude of the fiscal year 1997 general reduction and explain how
this was implemented?
Answer. As directed by the Congress, the agency applied general
reductions totaling $4.8 million in fiscal year 1997. This was
implemented through an across-the-board reduction of all research
specific projects.
obligations for new crops and pests
Question. Provide for the record fiscal year 1996 obligations
incurred and your current fiscal year 1997 funding estimates for the
following areas of research: canola, hops, kenaf, guayale, Lesquerella,
and sunflowers. Similarly, provide the Committee with information on
the pests: bollworm, boll weevil, whitefly, karnal bunt, fire ant, and
gypsy moth.
Answer. Obligations incurred for fiscal year 1996 and fiscal year
1997 estimated funding for crops and pest research are provided as
follows:
CROPS AND PEST RESEARCH
------------------------------------------------------------------------
Fiscal year--
-------------------------------
1996
obligations 1997 funding
------------------------------------------------------------------------
Crops:
Canola.............................. $188,867 $147,400
Hops................................ 374,114 388,200
Kenaf............................... 1,328,338 1,391,700
Guayule............................. 621,617 567,700
Lesquerella......................... 589,801 584,900
Sunflower........................... 2,788,706 2,483,600
Pests:
Boll Worm/Corn Earworm.............. 5,242,793 4,532,100
Boll Weevil......................... 1,897,062 1,758,300
Whitefly............................ 5,480,163 5,276,500
Karnal Bunt......................... 348,267 218,100
Fire Ant............................ 1,194,834 1,159,400
Gypsy Moth.......................... 2,353,078 1,620,600
------------------------------------------------------------------------
contracts
Question. What are the total obligations for contractual services
in fiscal years 1995 and 1996 and what is estimated in fiscal year
1997? Please specify amounts in support of research and those in
support of management.
Answer. The total obligations for contractual services in fiscal
year 1995 was $60,269,044. Of this total, $59,970,486 was obligated in
support of research and $298,558 was obligated in support of
management.
The total obligations for contractual services in fiscal year 1996
was $61,377,791. Of this total, $61,191,791 was obligated in support of
research and $186,000 was obligated in support of management.
The total estimated obligations for contractual services in fiscal
year 1997 is $53,000,000. Of this total, $52,820,000 is estimated for
support of research and $180,000 is estimated in support of management.
Question. Please indicate A-76 contract agreements in effect, by
location, the funding, and when they were implemented.
Answer. This information is detailed as follows:
------------------------------------------------------------------------
Fiscal year
Location 1997 funding When implemented
------------------------------------------------------------------------
Philadelphia, PA............... $2,286,857 May 1982.
New Orleans, LA................ 1,557,458 July 1982.
Peoria, IL..................... 2,400,000 September 1982.
Athens, GA..................... 1,570,705 July 1983.
Beltsville, MD................. 500,000 April 1985.
Albany, CA..................... 1,823,358 June 1988.
Orient Pt., NY................. 5,491,132 February 1991.
------------------------------------------------------------------------
Question. How many full-time equivalents are represented through
contractual services in ARS?
Answer. This information is detailed as follows:
----------------------------------------------------------------------------------------------------------------
Facility Scientist Research
Location support FTE support FTE support FTE
----------------------------------------------------------------------------------------------------------------
San Francisco, CA............................................... 22.0 .............. ..............
Philadelphia, PA................................................ 38.0 .............. ..............
Orient Point, NY (Plum Island).................................. 87.0 .............. ..............
Boston, MA...................................................... 15.0 39 171
Athens, GA...................................................... 34.0 .............. ..............
New Orleans, LA................................................. 40.2 .............. ..............
Albany, CA...................................................... 28.0 .............. ..............
Peoria, IL...................................................... 43.6 .............. ..............
-----------------------------------------------
Total..................................................... 307.8 39 171
----------------------------------------------------------------------------------------------------------------
Question. Identify the research contracts and agreements entered
into by ARS for fiscal year 1996 by recipient and funding.
Answer. Research contracts for fiscal year 1996 were:
Contract amount
Contractor (annual)
Tufts University, Boston, MA............................ $11,771,000
Westat, Inc., Rockville, MD............................. 4,220,000
Answer. Agreements for fiscal year 1996 were:
Cooperator Amount
A. Duda & Sons, Inc., Salinas, CA............................. $3,000
Agriculture and Agri-Food Canada Research Station, Summerland,
Canada.................................................... 20,000
Alabama Agri and Mech College, Normal, AL..................... 12,500
Alcorn State University, Lorman, MS........................... 488,262
Arkansas Children's Hosp., (Univ of AR) Little Rock, AR....... 1,646,400
Auburn University, Auburn, AL................................. 71,000
Baylor University, Waco, TX................................... 15,000
Bringham Young University, Provo, UT.......................... 25,440
Carrington Agri Expt Station, Carrington, ND.................. 6,375
Catholic University, Washington, DC........................... 65,000
Central Oregon Expt Station, Redmond, OR...................... 27,425
Clemson University, Clemson, SC............................... 41,000
Colorado State University, Ft. Collins, CO.................... 609,500
Conservation Technology Information Center, W. Lafayette, IN.. 6,500
Cornell University, Ithaca, NY................................ 734,435
Crow Valley Livestock Coop. Inc., Fort Collins, CO............ 18,000
Delta State College, Cleveland, MS............................ 25,000
Drexel University, Philadelphia, PA........................... 20,000
Duke University, Durham, NC................................... 70,721
East Carolina University, Greenville, NC...................... 4,884
East Central State College, Ada, OK........................... 11,500
East Tennessee State University, Johnson City, TN............. 5,000
Farm Service Cooperative, Council Bluffs, IA.................. 16,065
Florida Agri and Mech University, Tallahassee, FL............. 5,125
GA Federal State Inspection, Service, Albany, GA.............. 139,069
Gail G. Harrison, Thousand Oaks, CA........................... 10,000
George Washington University, Washington, DC.................. 2,640
Georgia Coastal Plain Expt, Station, Tifton, GA............... 60,000
Hawaiian Sugar Planter's Assn., Aiea, HI...................... 569,587
Heartland Co-op, Slater, IA................................... 70,955
Howard University, Washington, DC............................. 37,000
Illinois Agricultural Expt Station, Urbana, IL................ 57,000
Institute of Microbiology and Virology, Almaty, Kazakhstan.... 5,000
Institute for Technical Development, NSTL, MS................. 70,000
Instituto De Ecologia, Xalapa, MX............................. 20,000
Inta--Insectario de Invest., Castellar, AR.................... 12,500
International Inst. of Biological Control, Ascot, England..... 30,000
International Maize and Wheat Improv Ctr, Mexico City, MX..... 77,000
Iowa State University, Ames, IA............................... 142,960
John Hopkins University, Baltimore, MD........................ 94,084
Kansas State University, Manhattan, KS........................ 274,667
Lake Chelan Producer Association, Chelan, WA.................. 130,000
Louisiana State University, Baton Rouge, LA................... 146,650
LSU Medical Center, Shreveport, LA............................ 20,000
Maryland Dept. of Agriculture, Annapolis, MD.................. 50,000
Memphis State University, Memphis, TN......................... 12,000
Mercer University, Atlanta, GA................................ 3,000
Michigan State University, East Lansing, MI................... 250,650
Ministry of Agriculture, British Columbia..................... 2,000
Miss Agri and Forestry Exp Station, Mississippi State, MS..... 879,006
Mississippi State University, Mississippi State, MS........... 1,080,650
Missouri Botanical Garden, St. Louis, MO...................... 5,960
Montana State University, Bozeman, MT......................... 874,500
New Mexico State University, Las Cruces, NM................... 687,384
New York Agriculture Expt Station, Geneva, NY................. 111,292
North Carolina State University, Raleigh, NC.................. 976,305
North Central Agri Expt Station, Grand Rapids, MN............. 132,353
North Dakota State University, Fargo, ND...................... 215,606
Ohio State University, Wooster/Columbus, OH................... 343,790
Oklahoma State University, Stillwater, OK..................... 144,500
Oregon State University, Corvallis, OR........................ 479,375
Pennington Biomed Res Ctr (LSU), Baton Rouge, LA.............. 340,909
Pennsylvania State University, University Park/Biglerville, PA 87,596
Purdue University, West Layafette, IN......................... 708,795
Rio Farms, Inc., Edcough, TX.................................. 17,500
Rodale Institute Research Ctr (PSU), Kutztown, PA............. 324,523
Rutgers University, New Brunswick, NJ......................... 98,228
Sam Houston State University, Huntsville, TX.................. 108,000
Southeastern University, Durant, OK........................... 5,000
Southern Univ and A&M College, Baton Rouge, LA................ 340,909
Texas A&M University, College Station, TX..................... 1,064,549
Texas Tech University, Lubbock, TX............................ 160,500
The Holden Arboretum, Mentor, OH.............................. 20,726
Tulane University, New Orleans, LA............................ 25,000
Tuskegee University, Tuskegee, AL............................. 15,000
Universidad Nacional De La Plata, La Plata, AR................ 12,000
University of Alaska, Palmer, AK.............................. 6,000
University of Arizona, Tucson/Yuma, AZ........................ 309,129
University of Arkansas, Fayetteville/Pine Bluff, AR........... 456,683
University of California, Davis/Berk/Parlier/Riverside, CA.... 2,246,984
University of Connecticut, Storrs, CT......................... 80,000
University of Delaware, Newark, DE............................ 4,500
University of Florida, Gainesville/Lake Alfred, FL............ 1,603,712
University of Georgia, Athens/Tifton, GA...................... 377,516
University of Hawaii, Honolulu, HI............................ 1,507,317
University of Houston, Houston, TX............................ 15,168
University of Idaho, Moscow/Aberdeen, ID...................... 162,369
University of Illinois, Urbana/Champaign, IL.................. 470,691
University of Maine, Orono, ME................................ 35,721
University of Maryland, College Park, MD...................... 778,207
University of Maryland, Eastern Shore, Princess Anne, MD...... 6,000
University of Massachusetts, Amherst, MA...................... 10,000
University of Michigan, Flint, MI............................. 9,000
University of Minnesota, St. Paul, MN......................... 435,182
University of Mississippi, University, MS..................... 1,568,227
University of Missouri, Columbia, MO.......................... 685,754
University of Nebraska, Lincoln/Scotts Bluff, NE.............. 749,500
University of Nebraska East C, Lincoln, NE.................... 12,000
University of New Orleans, New Orleans, LA.................... 18,700
University of North Carolina, Chapel Hill, NC................. 38,000
University of North Dakota, Grand Forks, ND................... 28,850
University of Oklahoma, Norman, OK............................ 27,000
University of S W Louisiana, Lafayette, LA.................... 37,449
University of South Carolina, Columbia, SC.................... 10,000
University of Southern Mississippi, Hattiesburg, MS........... 340,909
University of Tennessee, Knoxville, TN........................ 149,863
University of Texas, Houston, TX.............................. 38,852
University of Vermont, Burlington, VT......................... 45,000
University of Wisconsin, Madison, WI.......................... 720,934
University of Wyoming, Laramie, WY............................ 48,747
Utah State University, Logan, UT.............................. 156,000
Virginia Military Institute, Lexington, VA.................... 54,000
Virginia Poly Inst and State University, Blacksburg, VA....... 100,000
Washington State University, MtVm/Prosser/Pullman/Wenatchee,
WA........................................................ 859,293
Yale University, New Haven, CT................................ 384,485
contracts
Question. ARS receives significant reimbursements from APHIS,
CSREES, ERS, NASS, and FSIS. Explain the use of the funds.
Answer. The reimbursements from APHIS are for the support agreement
at Plum Island Animal Disease Center. Research is also conducted on
silverleaf whitefly and water quality program activities. Funds
received from FSIS are used to develop dosimetry standards for
radiation processing of food and mathematical models to predict levels
of bacterial pathogens in food. ARS reimbursable agreements with
CSREES, ERS and NASS are primarily for support of the Administrative
and Financial Management unit which provides personnel, contractual and
financial management services to the Research, Education and Economics
agencies.
Question. ARS receives significant reimbursements from other
Federal agencies: HHS, EPA, DOE, and DOI. Explain the research
performed for these agencies.
Answer. The research performed for HHS includes anti-microbial
susceptibility testing of veterinary origin salmonella isolates; effect
of nitrofurazone in dairy cattle; nutrient content of foods in the
American diet; methods for food components associated with reduced
cardiovascular disease risk and fumonisin exposure, serum sphingolipids
and esophageal cancer relationships. The research performed for EPA
includes the comparison of remediation and assessment of contaminated
soils, water and air in agricultural watersheds and the development and
evaluation of an aerial video imaging system for natural resource
assessment. The research performed for DOE includes the metabolic
regulation of plant hormones; investigation of heavy bioaccumulation in
plants grown on metal-polluted soils; genetic variation among
switchgrasses for agronomic traits; forage quality and biomass fuel
production; and control of sucrose biosynthesis in plants by protein
phosphorylation. The research performed for DOI includes the
application of modeling technology in rangeland resource management and
improved water quality in Mississippi Delta watersheds and lakes.
Question. ARS received funding from State and other sources:
California; Cotton Incorporated; International Life Science; Florida
and North Carolina. Explain the use of these funds.
Answer. ARS funding received from the State of California were used
to develop a means for controlling aquatic weeds in the Sacramento
Delta, and to manage aquatic weeds in California waterways. Research
was also performed to develop systems and sprays for monitoring and
suppressing fruit fly populations, as well as mex and medfly. The
funding that ARS received from Cotton Incorporated were used in the
identification and chemical characterization of insect honeydews on
sticky cotton; development of an integrated resistance management
program for the silver leaf whitefly in AZ and CA; and methods for
improving the handling characteristics of fuzzy cottonseed. The funding
that ARS received from International Life Science Institute were used
in the controlled diet human studies assessing dietary fatty acid
impact on blood lipids and hemostasis. The funding that ARS received
from Florida were used in the study of biological control agent
development for the Australian Malaleuca and the management of bio-
agents for hydrilla, pista and water hyacinth. The funding that ARS
received from North Carolina were used in the evaluation of alternative
constructed wetland systems for swine wastewater treatment and
management practices to reduce nonpoint source pollution.
ars appropriations law
Please describe your activities and funding obligations in fiscal
year 1996 under the provisions limiting construction, alteration,
repair and improvements of buildings in the ARS appropriation language:
Question. The cost of constructing any one building shall not
exceed $250,000.
Answer. No obligations were made by ARS in fiscal year 1996 under
this unlimited building program limitations.
Question. Head houses and greenhouses which shall be limited to
$1,000,000.
Answer. No obligations were made by ARS in fiscal year 1996 under
the headhouse and greenhouse building program limitations.
Question. Ten buildings to be constructed or improved at a cost not
to exceed $500,000 each.
Answer. No obligations were made by ARS in fiscal year 1996 under
the ten buildings program limitations.
Question. How were these activities funded?
Answer. No projects required funding by ARS under these provisions
in fiscal year 1996.
national arboretum
Question. Please describe the projects and programs conducted at
the National Arboretum.
Answer. The National Arboretum has a diversified program that
includes Research, Gardens, and Education functions. The Research
program develops new and improved trees, shrubs and flowers to meet the
needs of a rapidly expanding market for floral and nursery products and
to satisfy public demand. The Gardens program is responsible for
developing and maintaining public display gardens on the 440 acre site
in Washington, D.C. The Education program conducts a wide ranging
program of public education in plant conservation, environmental
stewardship and the application of principles of integrated pest
management in public and private gardens.
Question. What is the resource distribution to these programs?
Answer. The National Arboretum budget in fiscal year 1997 is $7.274
million. Resources are distributed as follows: Research program--$4.616
million; Garden program--$1.976 million; Education program--$.682
million.
Question. In fiscal year 1997, Congress appropriated an increase of
$200,000 for floriculture/horticultural research. How are these funds
being implemented?
Answer. The funds are supporting research on genetic engineering of
roses for disease resistance; tissue culture of crape myrtle to develop
a tissue regeneration procedure for genetic engineering; and studies on
impatiens necrotic spot virus and the engineering of virus-resistant
impatiens.
Question. What is the status of replacing and modernizing the water
lines at the National Arboretum? When will this be completed? What is
the total estimated cost for this project?
Answer. The Arboretum has received and obligated $2.9 million
through fiscal year 1997 for the replacement of the irrigation water
system. These funds have been used to replace the main irrigation lines
throughout the National Arboretum. As part of this replacement project,
three wells were drilled and tied into the system. (This project does
not address replacing and automating the lateral irrigation lines off
the mains.)
Upon activating the wells, it was determined that the quality of
the well water was not adequate for irrigation purposes. A study is now
underway. ARS will evaluate this study carefully to determine the
economic feasibility of building this treatment facility rather than
staying on District of Columbia water. Preliminary estimates put the
cost of installing a treatment system at approximately $1.75 million
and estimate 18 months to construct. If this course of action is
chosen, the total cost for the new water system at the Arboretum will
total about $4.65 million.
Question. How much money does the Arboretum commit to overall
renovation and modernization annually? Describe the use of these funds
in fiscal years 1995-1997.
Answer. The Arboretum commits $739,633 annually to renovation and
modernization. The major projects these funds were used for are as
follows:
Fiscal year 1997: Amount
Update Master Plan........................................ $300,000
Design renovation of Herb Garden Paths.................... 60,000
Design Bonsai Complex Courtyard........................... 60,000
Replace directional and traffic signs..................... 30,000
Design exterior lighting.................................. 115,000
Design renovation of Lath Facility........................ 30,000
Trim and remove trees..................................... 25,000
Design renovation of Building 015......................... 55,000
Design renovation of Asian Valley Paths................... 40,000
Fiscal year 1996:
Replace directional and traffic signs..................... 87,008
Phase V, Water System replacement......................... 134,292
Repairs to Bonsai Museum.................................. 53,536
Repairs to Chinese Pagoda................................. 57,080
Replace Auditorium roof................................... 128,980
Install irrigation system................................. 66,467
Trim and remove trees..................................... 29,341
Install Fibre Optics cable................................ 41,220
Renovate hallways, Administration Building................ 19,727
Renovate heading systems, Bldgs. 013/014.................. 34,052
Fiscal year 1995:
Phase IV, Water System replacement........................ 203,488
Trim and remove trees..................................... 24,000
Replace Greenhouse cooling/ventilation.................... 129,425
Replace drainage system, Gotelli Collection............... 41,820
Restoration Projects...................................... 134,144
Repairs to Bonsai Museum.................................. 43,253
Replace boiler, Bldg. 012................................. 18,945
centers of excellence
Question. For fiscal year 1998, identify the proposed ARS Centers
of Excellence, where they are located and their funding. Describe the
programs at these Centers.
Answer. The ARS Centers of Excellence, at 1890 Land Grant
University locations and fiscal year 1998 funding are as follows:
ARS 1890's Centers of Excellence
Fiscal year 1998
Location estimate
Delaware State University, Dover, Delaware.................... $250,000
Langston University (proposed), Langston, Oklahoma............ 200,000
Alcorn State University, Lorman, Mississippi.................. 166,000
Tennessee State University, McMinnville, Tennessee............ 491,000
University of Arkansas, Pine Bluff, Arkansas.................. 373,000
University of Maryland Eastern Shore at Princess Anne,
Maryland.................................................. 246,000
--------------------------------------------------------------
____________________________________________________
Total................................................... 1,726,000
The research program is as follows:
Dover: Aquaculture Products.--Rapid methods are needed for
monitoring the microbial profile of aquaculture processes and products
to assure safety. Develop rapid detection and monitoring methods for
pathogens and spoilage microorganisms in aquaculture process and
products and to improve puring efficiency in order to prevent human
illness.
Langston: Grazing lands.--Determine impact of pasture design and
grazing animals on quality of water emerging from watersheds, and
develop pasture management systems that will optimize water quality and
productivity in the semi-arid U.S.
Lorman: Swine Production.-- Development of an efficient system for
production of meat-type pigs in the southern United States. The
objectives are to: evaluate breeds of swine that have good reproductive
performance and produce high quality lean carcasses in the southern
U.S.; develop feeding systems to obtain efficient conversion of feeds
at minimum cost; and to develop a system to transfer this new
technology to local producers.
McMinnville: Horticulture.--Develop new and improved ornamental
trees and shrubs for the U.S. nursery industry. Develop basic genetic
and physiological information related to nursery crop species. Reduce
pesticide use and fertilizer run-off during nursery crop production.
Develop improved nursery crop propagation methods. Evaluate existing
germplasm or ornamental trees and shrubs for pest resistance, tolerance
of environmental stress, and superior ornamental value.
Pine Bluff: Aquaculture.--Evaluate alternatives and develop new
components of aquaculture production systems to improve efficiency of
freshwater fish farming including cultural and processing methods to
enhance quality.
Princess Anne: Food Safety.--Identify and conduct research on
critical control points affecting the microbiological contamination of
poultry from grow-out through final consumer preparation, and to
develop interventions and quantitative risk models to ensure food
safety.
Question. What are the Agency's long-term plans with respect to
staffing these Centers?
Answer. ARS' long-term plans with respect to staffing these Centers
is as follows:
Dover, Delaware: One scientist will be hired with funds
appropriated in fiscal year 1997. At the current level of funding,
there are no plans to expand beyond one scientist.
Langston, Oklahoma: Proposed Center of Excellence in fiscal year
1998. Plans are to use funds, if appropriated in fiscal year 1998, for
a cooperative undertaking utilizing cooperative university staff. We do
not plan to add any permanent staff.
Lorman, Mississippi: At present only temporary staff have been
hired to support the project. At the current level of funding, we do
not plan to add any permanent staff.
McMinnville, Tennessee: Current staffing includes an ARS Research
Geneticist and a Research Horticulturist is being recruited.
Pine Bluff, Arkansas: One ARS scientist is now in place. A second
scientist is currently being recruited with additional funds
appropriated in fiscal year 1997. At the current funding level, there
are no plans to expand beyond two scientists.
Princess Anne, Maryland: ARS has no plans at present to expand
beyond the one scientist and support staff currently in place.
Question. Describe the working relationship and accomplishments
resulting from these collaborations.
Answer. The working relationship and accomplishments resulting from
these collaborations are as follows:
Dover, Delaware: The program is just being developed. The
combination of physical resources (facilities, laboratory space, and
water resources of the Microbial Food Safety Unit, at ARS' Eastern
Regional Research Center, and the Aquatic Ecology/Aquaculture Research
Program at Delaware State University) will allow the conduct of
important aquaculture food safety research that neither organization
could carry out independently.
Langston, Oklahoma: The anticipated outcome of the proposed
cooperative endeavor between ARS' El Reno Grazing Lands Research
Laboratory will result in new research information: (1) impacting
pasture design and grazing animals on quality of water emerging from
watersheds, and (2)the development of pasture management systems that
will optimize water quality and productivity in the semi-arid U.S.
Lorman, Mississippi: A new physical facility is being developed
that will permit the housing of boars that are needed to initiate an
artificial insemination program. Alcorn State University staff members
have received training in ARS' laboratories on the technologies
associated with the use of implementing a program on artificial
insemination in swine. Selected genetic stock (females) have been
purchased and are now part of the Alcorn project. ARS and the Alcorn
State University have worked together in developing the plan that was
used to select the genetic stock that will be used in the project. The
overall plan for the implementation of the long term project on swine
is now being developed by Alcorn State University and ARS scientists.
The progress to date has been good. The project has led to considerable
interactions between Alcorn State University and ARS scientists. More
importantly, the project has outstanding potential to improve swine
production systems for local producers that at a later date can be
transferred to other producers in the south.
McMinnville, Tennessee: An excellent collaboration has been
established between Tennessee State University, ARS and the Tennessee
Nursery industry. This partnership has resulted in jointly establishing
research objectives including breeding for resistance to dogwood
anthracnose and the development and use of natural products for pest
and disease control on nursery crops.
Pine Bluff, Arkansas: The ARS program is cooperative with and
complementary to the strong aquaculture research and extension program
already in place at the University of Arkansas at Pine Bluff (UAPB)
(five Ph.D.-level scientists and four M.S.-level staff members have
research appointments in the UAPB's Aquaculture/Fisheries Program).
UAPB and ARS share facilities, space and water resources and cooperate
on research related to aquaculture engineering, water quality, and
systems technology. The cooperation results in substantial benefits to
both ARS and UAPB in terms of cooperative research, technology transfer
(through UAPB's extension activities), and training and recruitment of
minority scientists.
Princess Anne, Maryland: A survey of growth characteristics of
various Salmonella isolates obtained from poultry operations in the
Delmarva was completed. The results of this survey will provide the
basis for developing predictive models to estimate changes in
Salmonella numbers on poultry as it moves through the farm to fork
chain. The ARS laboratory uses University of Maryland at Eastern Shore
(UMES) laboratory space and UMES scientists and students provide
support for the research program. Thus, working relationships for this
program are close with the UMES, as well as the Eastern Regional
Research Laboratory of the ARS at Wyndmoor, Pennsylvania, and the
combined expertise provides for a strong research program.
technology transfer
Question. Please describe your activities in the area of technology
transfer. How many licenses, patents and CRADA's were entered into in
fiscal year 1996? How do these statistics compare to fiscal year 1994?
What is your activity to date in fiscal year 1997?
Answer. There are a variety of activities associated with
technology transfer in ARS. There are currently eight individuals in
field locations functioning as full or part time Technology Transfer
coordinators. Their duties include working closely with ARS scientists
to identify developing technologies of potential commercial interest,
identifying specific strategic partners, and negotiation of a variety
of agreements including CRADA's, Trusts, Reimbursable Cooperative
Agreements, Memorandums of Understanding, Material Transfer Agreements,
and Confidentially Agreements. Domestic and foreign patents and
licenses continue to be an important part of technology transfer
activities. Each year OTT staff members participate in more than 30
technology transfer meetings and targeted trade shows where they
exhibit materials and/or give presentations on new technologies
available for licensing, examples of past successes, and how to develop
partnership with ARS. These events also provide a venue for farmers,
industry representatives, consumers, and end users to inform ARS of
their specific problems and needs. In addition, OTT staff members also
develop and conduct workshops targeting specific industries who are
potential strategic partners. Other recent efforts to enhance and speed
the transfer of ARS technology have focused on electronic access via
the OTT home page, and closer working relationships with the
Information Staff, and the National Agricultural Library. The area or
rural development has received special emphasis with efforts ranging
from active participation in the USDA Rural Development Action Team,
closer ties with the SBIR program, AARC, and BRDC, to the development
of agreements with several state Economic Development Agencies to
foster closer working relationships at the local level. In fiscal year
1996, ARS filed 76 patent application, while 53 ARS patents were issued
by the Patent and Trademark Office. Also in fiscal year 1996, ARS
licensed 25 inventions to the private sector, while entering into 81
Cooperative Research and Development Agreements. In fiscal year 1994,
ARS filed 40 patent applications, while 36 patents were issued by the
PTO. Also in fiscal year 1994, ARS licensed 9 inventions and negotiated
93 CRADA's. For fiscal year 1997, to date, ARS has filed 19 patent
applications, while 20 have been issued by the PTO. ARS licensed 11
inventions and negotiated 45 CRADA's as of April 29, 1997.
Question. How does ARS interface with Federal and State Extension
activities? How effective is this relationship?
Answer. The application of new technologies to complex modern
farming systems is becoming extremely complicated. A key component in
the successful transfer of new technologies to producers and users is
to provide training and education in the diagnosis of problems,
selection of solutions, and method of application. In addition, a new
system of independent crop consultants is involved in the rapid
dissemination of new technical developments that are effective,
economically feasible, and environmentally friendly. ARS is heavily
dependent on Federal and State Extension services to achieve this vital
element of training and education of all interested parties. This
relationship has been highly effective in the continued success of
American agriculture. The interface between ARS and Extension occurs in
many ways. Numerous ARS units are co-located at Universities where the
close working relationship among ARS scientists and their University
colleagues leads to a daily transfer of information. Furthermore, many
new ARS technologies undergo pilot tests and demonstration phases in
which extension personnel are intimately involved. Two recent examples
where ARS/extension interactions have been critical for progress are
release of predatory wasps for augmentive biocontrol of the cotton boll
weevil in West Texas, and release of a beetle for biocontrol of the
noxious weed melaleuca in Florida.
Question. Describe major accomplishments through the CRADA program?
Answer. Since passage of the Technology Transfer Act of 1986, ARS
has entered into more than 670 CRADA's with companies and other
entities, resulting in new products ranging from edible coatings to
extend shelf life of fruits and vegetables, new plastic products from
renewable resources, new diagnostic tests for toxins and food safety
microorganisms, to novel and more effective pest control and crop
protection. Through the CRADA program, ARS is leveraging its resources
by encouraging domestic companies to partner in high-risk unproven
technologies. Such partnerships permit these companies and the U.S. to
remain globally competitive, while delivering improved and
environmentally-friendly products to farmers and consumers in a timely
manner. In some cases, the CRADA program has been instrumental in the
creation of new businesses.
Some examples include:
CRADA's with EMBREX, Inc. of Research Triangle Park, North
Carolina, are leading to the development of several new poultry
vaccines, such as the recently registered Bursaplex vaccine to combat
infectious bursal disease in poultry. EMBREX Inc., a start-up company
with two employees in 1985, today employs more than 120 people, with
international operations in London, where it has entered European and
African markets. The company is also working on similar arrangements
with the Japanese to enter the Asian market. EMBREX has seven research
and development agreements on techniques ranging from poultry
protection against avian coccidiosis to Salmonella.
A CRADA with Handley Yosemite Farms of Turlock, California is
evaluating molding technologies to develop value-added restructured
fruit products. A Cooperative Research and Development Agreement
(CRADA) is assisting in commercial development of shelf-stable products
that are convenient and nutritious to consumers, while offering growers
and processors new markets for fruits, such as apricots, peaches,
grapes, strawberries and oranges. Potential markets for these products
include the confectionery and health food markets.
A stable, nonseparable composition made from starch and oil
developed by ARS led to three CRADA's for uses in food and nonfood
applications. A CRADA with the Union Camp Corporation of Wayne, New
Jersey, was used to develop environmentally friendly adhesives, glues,
and coatings. The technology could capture a significant share of the
$100 million per year adhesive and coating market for wood-based
products. A CRADA with Opta Food Ingredients of Bedford, Massachusetts
used the technology in a variety of food applications, such as fat
replacements. The total market for fat replacements and food
ingredients exceeds more than $300 million per year. The starch-oil
combination also attracted the attention of Seedbiotics, Inc. of
Caldwell, Idaho, which in partnership with ARS developed a way to
encapsulate fertilizers and biological pesticides and herbicides in
compositions that can be used to coat seeds to enhance seedling
development.
A CRADA with Demeter Biotechnologies Ltd. of Research Triangle
Park, North Carolina is developing technologies to control bacterial
diseases of channel catfish. ARS researchers are investigating the
potential of synthetic lytic peptides to control specific bacterial
diseases. Losses from these diseases in commercial production range
from 20 percent with mild infections to 95 percent with severe
infections. Enteric septicemia, caused by the bacterium Edwardsiella
ictaluri is responsible for about 30 percent of all channel catfish
disease losses in the southeastern United States. Research results will
be used to develop disease-resistant stocks of channel catfish for
release to commercial catfish farmers.
A CRADA with Zellweger Uster, Inc. of Knoxville, Tennessee, is
incorporating a new moisture sensor into the company's system of
measuring cotton fiber quality for the international cotton industry.
The moisture sensor was originally developed for the cotton ginning
industry, but also has applications in other industries, such as
textile processing and marketing classification of cotton. For
classification, some of the measured fiber qualities such as strength
and micronaire are strongly influenced by the fiber moisture. The
mutual interest of ARS and Zellweger Uster is to validate a moisture
measurement system which can be commercialized and introduced into the
cotton industry.
A CRADA with the Whirlpool Corp. of Benton Harbor, Mich. is
evaluating fabric damage during laundering of cotton fabric. The
objectives of this project include minimizing fabric damage, lint
generation and cross contamination of lint between garments during
laundering of cotton fabric. ARS scientists are studying the effects of
moisture, heat, duration and extent of tumble drying and laundering
additives on fiber structure and morphology of fabric by light and
electron microscopy and image analysis. In addition, the partnership is
addressing the problem of lint production and cross contamination
between garments. The results of the CRADA will assist Whirlpool, a
major manufacturer of laundering machines, in improving their
laundering machines, primarily tumble dryers.
ars personnel
Question. The fiscal year 1998 budget proposes a 186 reduction in
ARS full-time equivalent positions (FTE's) from 7,800 in fiscal year
1997 to 7,614, the fiscal year 1996 level. How will this reduction be
realized, by location? How many scientists will ARS lose as a result of
this proposed reduction? What number of staff year reductions will be
taken from headquarters?
Answer. The 7,800 FTE authorized for fiscal year 1997 represents an
increase over actual FTE used in fiscal year 1996. The proposed
allowance for fiscal year 1998 is equal to the fiscal year 1996 level.
ARS currently is working toward increasing the number of research
scientists to 2000 from the current level of 1810 by changing the mix
of administrative, technical, clerical and post doctoral support
positions. These changes will be accomplished through normal attrition
in headquarters and the field offices. ARS does not anticipate losing
any scientists due to authorized ceiling allocations. Any FTE changes
between fiscal year 1997 and fiscal year 1998 which occur will be
managed, if necessary, through normal attrition. Until actual FTE's are
reduced reductions in staffing cannot be broken out by location.
Question. Update the Committee on the average age of ARS
scientists. Compare this to that of 1990 and 1985.
Answer. ARS does not have employment statistics for the years prior
to fiscal year 1986. The current average age of ARS scientists on-board
is 50.8. At the end of fiscal year 1990 the average age was 48.33. The
average age was 47.78 at the end of fiscal year 1986.
Question. How many scientists are currently on-board?
Answer. There are currently 1,810 permanent ARS scientists on-
board.
Question. How many were on-board at the beginning of fiscal years
1996 and 1995?
Answer. In the beginning of fiscal year 1996, there were 1,906
permanent ARS scientists on-board. At the start of fiscal year 1995,
there were 1,969 permanent ARS scientists on-board.
Question. What is the current scientist to laboratory capacity
ratio in ARS? Has this changed over the past 10 years? For each of the
following locations, list the current capacity and scientists on board:
Beltsville, MD; Utilization Centers at Peoria, IL; Albany, CA;
Philadelphia, PA and New Orleans, LA; and NADC, Ames, IA.
Answer. The current scientist to laboratory capacity ratio in ARS
is about 80 percent. This ratio has not changed significantly over the
past 10 years. The current capacity and scientists on-board for
specific locations requested are as follows:
------------------------------------------------------------------------
Ratio
Location Capacity Scientists (percent)
------------------------------------------------------------------------
Beltsville, MD................... 600 512 85
Peoria, IL....................... 164 134 82
Albany, CA....................... 208 166 80
Philadelphia, PA................. 154 121 79
New Orleans, LA.................. 127 90 71
NADC, Ames, IA................... 160 106 66
--------------------------------------
Total...................... 1,413 1,129 80
------------------------------------------------------------------------
Question. ARS' actual staff years have come in well below its
authorized ceilings the past two years. What do you anticipate in
fiscal year 1997?
Answer. Current staffing and plans indicate that ARS' full-time
equivalent (FTE) usage for fiscal year 1997 will be an estimated 300
below the ceiling of 7,800.
Question. Please identify the number of personnel defined as
management in ARS in Washington headquarters and in the field.
Answer. The number of personnel defined as ARS management is 11.
These positions are located in Washington headquarters.
Question. How has this changed since 1990?
Answer. In fiscal year 1990, ARS had 13 management positions. The
total increased to 16 in fiscal year 1991 due to the expansion of the
National Program Staff from two program areas to five. Near the end of
fiscal year 1996 the total decreased to 11 when activities under the
Global Warming Staff were reassigned to the National Program Staff.
Question. What is the makeup and diversity of the ARS work force?
How does it compare to 1990?
Answer. The chart below identifies the diversity of the ARS work
force for fiscal year 1990 and the current ARS work force. The numbers
are expressed as percentages of the total work force based on end-of-
year employment data.
------------------------------------------------------------------------
Percent--
-------------------------
Race Fiscal year Current
1990 work force
------------------------------------------------------------------------
Asian/Pacific Islanders....................... 4 3
Black......................................... 8 9
Hispanic...................................... 3 4
Native American............................... ........... 1
White......................................... 85 83
-------------------------
Total................................... 100 100
------------------------------------------------------------------------
Question. Provide the Agency level of ARS FTE's for 1985, 1990, and
1996. Provide scientific, support, and management FTE's for these same
years.
Answer. ARS FTE's for 1985, 1990, and 1996 are as follows:
Fiscal year FTE's
1985.............................................................. 8,112
1990.............................................................. 8,207
1996.............................................................. 7,614
FTE information by specific employment categories is not available.
However, on-board end-of-year employment by major position categories
for fiscal year 1986, 1990 and 1996 is listed below. The categories are
defined as follows:
Professional.--Occupations which require knowledge or learning
acquired through education or training equivalent to a bachelor's
degree or higher, with a major study in a specialized field. Examples
include: entomologists, geneticists, soil scientists, chemists, etc.
Technical.--Occupations typically associated with and supportive of
a professional position that requires extensive practical knowledge.
Examples include: Biological technicians, engineering technicians,
physical science technicians, and office automation clerks.
Administrative/Clerical.--Occupations which require analytical
ability, judgment, discretion, and personal responsibility in applying
principles, concepts or practices to fields of administration or
management, as well as positions which involve structured work in
support of an organization. Examples include: computer specialists,
administrative officers, personnel specialists, management and program
analysts.
Wage Grade/Other.--Occupations involving the trades, crafts, or
skilled, unskilled or semiskilled manual labor and white collar student
trainee positions. Examples include: animal caretakers, maintenance
mechanics, and biological science student trainees.
------------------------------------------------------------------------
Fiscal year--
Group --------------------------------------
1986 1990 1996
------------------------------------------------------------------------
Professional..................... 3,420 3,565 3,063
Technical........................ 2,593 2,791 3,030
Administrative/Clerical.......... 1,461 1,439 1,089
Wage Grade/Other................. 1,214 873 764
--------------------------------------
Total \1\.................. 8,688 8,668 7,946
------------------------------------------------------------------------
\1\ Total represents on-board, end-of-year employment by major position
categories as shown.
aquaculture
The ARS report to the Committee on warmwater aquaculture research
facilities and programs indicates that the continued growth and
competitive position of the U.S. aquaculture industry in a global
marketplace will be directly related to the resources invested in
research and technology development.
Question. What level of resources are included in the fiscal year
1998 request to enhance the growth and competitiveness of U.S.
aquaculture? How does this compare to the federal resources devoted to
this purpose for fiscal year 1997?
Answer. The Department's fiscal year 1998 budget request includes
$8,572,400 in aquaculture funding for the Agricultural Research
Service. Fiscal year 1997 funding for aquaculture in the Agricultural
Research Service is $10,184,800.
Question. The report indicates that the ability of ARS' research
program in support of the warmwater aquaculture industry will be
significantly improved with the completion of programs and facilities
still under development. With respect to each of the locations where
warmwater aquaculture research is conducted, which programs and
facilities are still under development? What staffing and funding will
be required for the programs and facilities at each of these locations
once they are fully developed?
Answer. Warmwater aquaculture research locations still under
development, with required staffing and funding at each location, are
as follows:
National Warmwater Aquaculture Research Center, Stoneville,
Mississippi.--Total program funding of $5.1 million is projected to
support a total of 17 research scientists, 11 of which would be
Mississippi Agricultural and Forestry Experiment Station scientists and
6 of which would be ARS scientists. With the current funding level of
$3.2 million, an additional $1.9 million is needed to support research
programs in catfish production practices, nutrition, water quality/
quantity, genetics and breeding, disease diagnosis and control, and
food processing.
Fish Diseases and Parasites Research Laboratory, Auburn, Alabama.--
Total program funding of $1.74 million is projected to support a total
of 6 research scientists. With the current funding of $0.84 million, an
additional $0.9 million is needed to support research programs in
disease diagnosis, and control, immunology, and vaccines development to
solve fish health programs in aquaculture.
National Aquaculture Research Center, Stuttgart, Arkansas.--Total
program funding of $3.59 million is projected to support a total of 11
research scientists. With the current funding of $1.24 million, an
additional $2.35 million is required to support research programs in
therapeutics evaluations and production systems for the aquaculture
industry.
Aquaculture Systems Research Unit, Pine Bluff, Arkansas.--A total
of $0.5 million is projected to support a total of 2 research
scientists. With the current funding of $0.37 million, an additional
$0.13 million is needed to support aquaculture engineering-related
research programs in aquaculture pond management practices, postharvest
procedures, and value-added products.
Question. The report indicates that during fiscal year 1997, a
thorough review of the Stuttgart National Aquaculture Research Center
will be undertaken to determine the specific directions of future
research programs. When will this review be complete? Please submit the
results of this review to the Committee.
Answer. We expect that the review will be completed by September
30, 1997. The results of the review will be submitted to the Committee.
project terminations
Question. ARS is recommending a number of project terminations to
fund ``high priority research.'' Why do you consider these projects,
many of which impact production research, to be low priority?
Answer. ARS considers all research within its mission to be
important; however, in situations in which there are not enough
assigned funds to allocate to all required research, it becomes
essential to assign priority. The President's budget provides an
overall net increase of $10 million for ARS, but also identifies $36.5
million of new high priority research to undertake. Therefore, it
became necessary for ARS to identify over $26 million invested in
current research activities to terminate and redirect toward these new
initiatives. In an effort to objectively identify the most appropriate
research to terminate, ARS developed a ``Project Evaluation Guide''
that focuses on an analysis of three primary factors: relevance,
capacity, and impact. A careful evaluation of the Federal role is also
included in the analysis. The ARS top management team applied this
guide to all research projects in the Agency and achieved consensus on
overall ratings. Projects that were in the lower quatrile were further
scrutinized. Using this process, the ARS management team selected those
projects whose terminations were judged to have the least overall
negative impact on agriculture from a national perspective, in relation
to all other research ongoing in the Agency. The 71 projects proposed
for termination were not limited to production agriculture, but
represented many other areas of concern. Within the diverse ARS
research portfolio, there are no ``low priority'' research projects;
however, in times of tight budget scenarios, and required new
allocations to selected program areas, difficult judgments must be made
in terms of which projects are less critical.
Question. What criteria did you impose to determine the projects
proposed for termination?
Answer. The criteria imposed include relevance, capacity, and
impact. A careful analysis of the Federal role was also conducted.
Relevance deals with the goals and objectives of a project relative to
critical national or regional problems as identified by customers and
stakeholders. Capacity deals with the fiscal, human, and physical
resources available to support the project and meet the stated
objective(s). Impact is concerned with the beneficial change(s) that
have occurred or are anticipated to occur for the agriculture and food
industry, scientific community, economy, society, and/or policy issues
of the Nation.
Question. By location, provide a list of the proposed project
terminations. How many scientists are impacted at each location?
Answer. A list of the proposed project terminations and number of
scientists impacted are as follows:
PROPOSED PROJECT TERMINATIONS IN FISCAL YEAR 1998--RESEARCH PROJECT
TITLE BY LOCATION, FUNDING AND STAFF YEARS
------------------------------------------------------------------------
Fiscal year
Location 1997 (base) Scientists
gross
------------------------------------------------------------------------
California:
Albany:
Flavor Optimization of Major Food
Crops through Control of Metabolic
Processes......................... $357,600 .9
Modification of Vegetable Oils as
Raw Materials for Industrial Uses. 681,900 3.0
In Vitro Creation and
Commercialization of High Solids
Tomatoes and High-Solids, Low
Sugar Potatoes.................... 398,900 1.6
New Bacterial Polysaccharides for
Food and Industry................. 324,200 1.5
Novel Biopolymers Based on
Agricultural Sources.............. 282,500 1.0
Biological Control of Yellow
Starthistle and Other Non-
indigenous Plant Pests in the
Western USA....................... 88,200 ...........
----------------------------
Total.......................... 2,133,300 8.0
============================
Fresno: Shallow Groundwater Management
Systems for Arid Irrigated Areas...... 245,700 2.0
(w/s Brawley): Irrigated Desert
Research II........................... 321,000 ...........
----------------------------
Total.............................. 566,700 2.0
============================
Colorado: Ft. Collins:
Global Change Research, Decision
Support, Modeling, and Database
Management (Extramural-CIESIN)
($789,137 Est.)....................... 727,500 ...........
Development of Improved Cropping System
Models and Technology for Sustainable
Production (Extramural-Colorado State
Univ.) ($50,000 Est) (Total Agreement
$170,000 balance of $120,000 funded
from another CRIS Project in Ft.
Collins).............................. 158,400 ...........
Development of a Decision Support
System for Farmers and Ranchers in the
Great Plains.......................... 80,000 ...........
----------------------------
Total.............................. 965,900 ...........
============================
Florida: Gainesville: Mgt of Termites as
Urban Pests in the American Pacific
(Extramural-Univ of HI for Formosan
Termites) ($120,288 Est).................. 144,100 ...........
----------------------------
Total................................ 144,100 ...........
============================
Hawaii: Aquaculture Productivity Research
Phase II (Extramural-All to Oceanic
Institute) ($1,434,195 Est)............... 1,612,400 ...........
----------------------------
Total................................ 1,612,400 ...........
============================
Idaho: Aberdeen: Development and Use of
Molecular Techniques in Oat Enhancement... 160,700 1.0
----------------------------
Total................................ 160,700 1.0
============================
Illinois:
Peoria:
Animal Health Consortium (shown
geographically in Ames)
(Extramural-BRDC) ($834,545 Est).. 919,800 ...........
Exploratory Thermal Chemical
Conversion of Starch to Enhance
Derivatization.................... 161,700 1.0
Enhanced Use of Plant Proteins:
Identifying, Isolating and
Relating Structures to Properties. 577,900 2.0
Genetic Engineering of Anaerobic
Bacteria for Improved Rumen
Function.......................... 490,800 2.0
----------------------------
Total.......................... 2,150,200 5.0
============================
Urbana:
Reduced Herbicide Inputs for
Effective Weed Management Systems
to Improve Water Quality.......... 185,700 ...........
Sensors and Systems for Site-
Specific Crop Management to
Improve Environmental Quality
(Extramural-Ill. Ag. Exp, Sta.)
($32,000 Est)..................... 229,200 1.0
Soybean Diseases................... 344,100 2.0
----------------------------
Total.......................... 759,000 3.0
============================
Iowa: Ames:
Limits to Digestibility and
Interactions Among Quality, Growth,
and Persistence of Forages............ 171,000 ...........
Genetic Characterization of Soybean
Germplasm............................. 178,900 1.0
----------------------------
Total.............................. 349,900 1.0
============================
Kansas: Manhattan: Protecting Hard Red
Winter Wheat from Biotic Stress........... 250,000 ...........
----------------------------
Total................................ 250,000 ...........
============================
Louisiana: New Orleans:
Improving Sugarcane Productivity by
Conventional and Molecular Approaches
to Genetic Development................ 233,300 ...........
Disease and Insect Control Mechanisms
for the Enhancement of Sugarcane
Germplasm Resistance.................. 83,400 ...........
Developing Integrated Weed Management
Systems for Efficient and Sustainable
Sugarcane Production.................. 83,300 ...........
----------------------------
Total.............................. 400,000 ...........
============================
Maryland: Beltsville:
Ecologically-Based Technologies for
Controlling Ixodes Scapularis and
Reducing Lyme Disease (Extramural-
Yale) ($157,500 Est).................. 175,200 ...........
Remote Sensing and Associated
Technologies for Production Decisions
(Extramural-Institute of Tech Develop,
MS) ($70,000 Est)..................... 206,100 ...........
Stability/Maturity/Safety of Composts
and Organic Residuals: Criteria and
Tests for Agriculture (Extramural-
Rodale Inst.) ($237,223 Est.) (Total
Agreement $324,523 balance of $77,300
funded from other CRIS Projects in
Beltsville and $10,000 from ERRC)..... 281,700 ...........
Automated Firmness Classification of
Apples................................ 378,600 1.0
Production and Evaluation of Tissue-
Cultured Fruit Crops.................. 237,900 ...........
National Turfgrass Evaluation Program.. 55,300 ...........
Genetic Modification of Soybean
Inoculants to Improve Their
Effectiveness......................... 171,800 1.0
Molecular Genetics of Populations of
Fungi Important in Biological Control. 182,300 1.0
Reduction of Chilling Injury by
Techniques Safe for Food Consump-
tion.................................. 454,000 2.0
----------------------------
Total.............................. 2,142,900 6.0
============================
Michigan: East Lansing:
Innovation Technology to Improve the
Production and Handling of Vegetables
(Extramural-MI State Univ.) ($50,000
Est).................................. 222,200 1.0
Crop/Animal Systems to Improve Nutrient
Management and Sustainability of Dairy
Farms................................. 170,800 1.0
----------------------------
Total.............................. 393,000 2.0
============================
Minnesota: St. Paul: Germplasm Evaluation
and Genetic Improvement of Oats and Wild
Rice (Extramural-No. Central Ag Exp Sta,
Grand Rapids for Wild Rice) ($132,353 Est) 147,000 ...........
----------------------------
Total................................ 147,000 ...........
============================
Mississippi: Stoneville: Agronomic and
Economic Evaluation of Kenaf as a Field
Crop in Mississippi (Extramural-MS. St.
Univ.) ($418,019 Est)..................... 491,500 ...........
----------------------------
Total................................ 491,500 ...........
============================
Missouri: Columbia: Surface and Subsurface
Hydrology for Watersheds with Limited
Relief.................................... 393,200 1.0
----------------------------
Total................................ 393,200 1.0
============================
Nebraska:
Clay Center: Influence of
Gastrointestinal Neuroendocrine
Peptides on Food Intake and Growth of
Swine................................. 208,400 1.0
----------------------------
Total.............................. 208,400 1.0
============================
Lincoln: Biology and Control of Virus
Diseases of Sorghum................... 143,100 1.0
----------------------------
Total.............................. 143,100 1.0
============================
New York:
Ithaca:
Entomopathogenic Fungi as
Biocontrol Agents of Pest Insects
of Agricultural Crops (Extramural-
Univ of Vermont for Pear Thrips)
($45,000 Est)..................... 50,000 ...........
Agricultural Sustainability and
Stress Adaptation: Role of
Differential Root Development..... 221,100 1.0
(w/s Orono): Production Systems that
Are Economically Feasible Beneficial
to the Environment and Natural
Resources............................. 135,500 1.0
----------------------------
Total.............................. 406,600 2.0
============================
North Carolina: Raleigh:
Enhancement of Roasted Peanut Flavor
Intensity Using Genetic Resources..... 285,800 2.0
Factors Responsible for Control of the
Textural Properties of Processed
Sweetpotato Products.................. 217,200 1.0
Evaluation of Temperate Legumes and
Warm-Season Grass Mixtures in
Sustainable Production Systems........ 374,200 2.0
----------------------------
Total.............................. 877,200 5.0
============================
North Dakota: Mandan:
Conservation Tillage-Diverse Crop
Systems to Use Water and Nutrients
Efficiently Protect Environment....... 941,100 3.0
Water Management Systems to Sustain
Production and Environmental Quality
in the Northern Great Plains.......... 708,900 2.0
Improvement of Forage Germplasm for
Conservation and Forage-Livestock
Systems in the No. Great Plains....... 685,200 2.0
----------------------------
Total.............................. 2,335,200 \1\ 7.0
============================
Ohio: Wooster: Development of Soybean
Germplasm and Production Systems for High
Yield and Drought Prone Environments...... 210,100 1.0
----------------------------
Total................................ 210,100 1.0
============================
Oklahoma: Stillwater: Improving Resistance
of Peanut to Biological Stress Through
Germplasm and Cultural Enhancement
(Extramural-OK State Univ.) ($24,500 Est.)
(This agreement was initiated 8/95 prior
to receiving fiscal year 1997 program
increase of $150,000 for Peanut research). 150,000 ...........
----------------------------
Total................................ 150,000 ...........
============================
Oregon: Corvallis:
Characterization of Environment and
Nutritional Induced Cytokinin Changes
in Wheat.............................. 214,800 1.0
Partitioning of Photosynthate as
Influenced by Genotype, Mycorrhizae
and Air Enriched with CO2............. 175,800 1.0
On-Farm Grass Straw Utilization
Development........................... 215,200 1.0
Germplasm Enhancement and Cultivar
Germplasm Enhancement and Cultivar
Development of Blackberry, Strawberry,
Blueberry and Raspberry (Extramural-OR
State Univ.) ($52,500 Est) (Extramural
WA State Univ) ($18,610 Est).......... 325,000 ...........
----------------------------
Total.............................. 930,800 3.0
============================
Pennsylvania:
University Park: The Role of
Variability in the Distributed Process
Modeling of Soil Water................ 384,300 1.0
----------------------------
Total.............................. 384,300 1.0
============================
Wyndmoor: Value-Added Products from
Fruit and Vegetable Processing Wastes. 691,500 3.0
----------------------------
Total.............................. 691,500 3.0
============================
Puerto Rico: Mayaguez: Transferring
Technology for the Improvement of
Agriculture in P.R. and other Caribbean
Countries................................. 158,700 ...........
----------------------------
Total................................ 158,700 ...........
============================
Texas:
College Station: Biological Control of
Horn Flies in Pasture Ecosys- tems... 221,500 1.0
----------------------------
Total.............................. 221,500 1.0
============================
Weslaco: Development of Improved
Cultivars and Efficient Cultural
Practices for Kenaf and Crotalaria
(Extramural-Rio Farms) ($17,500 Est)
(Extramural-Ill. Ag. Exp Sta.)
($25,000)............................. 343,900 1.0
----------------------------
Total.............................. 343,900 1.0
============================
Washington:
Prosser:
Intelligent Farm Management Systems
(Extramural-WA. State Univ.)
($62,550 Est)..................... 256,700 1.0
Viruses and Virus Resistance in
Alfalfa Germplasm................. 459,700 1.0
Evaluation of Advanced Potato
Clones for Resistance, Agronomic
and Culinary Traits............... 142,100 ...........
Potato Production Systems to
Conserve Resources and Reduce
Pesticide Use..................... 578,200 2.0
----------------------------
Total.......................... 1,436,700 \2\ 4.0
============================
Pullman:
Genetically Enhanced Wheat for
Quality Productivity and
Resistance to Biotic and Abiotic
Stresses.......................... 146,100 ...........
Biochemical and Molecular
Regulation of Preharvest Sprouting
and Grain Dormancy in Wheat....... 67,200 ...........
Control of Foliar Diseases and
Smuts of Wheat.................... 136,700 ...........
----------------------------
Total.......................... 350,000 ...........
============================
Headquarters: Floriculture................. 200,000 ...........
----------------------------
Total................................ 200,000 ...........
============================
Subtotal Terminations................ 22,107,800 \3\ 59.0
----------------------------
Management: Management Savings............. 915,200 ...........
----------------------------
Grand Total.......................... 23,023,000 \3\ 59.0
------------------------------------------------------------------------
\1\ Excludes 2 SY's proposed for redirection to Miles City, MT.
\2\ Excludes 4 SY's proposed for redirection (2 SY's to Pullman, WA and
2 SY's to Aberdeen, ID).
\3\ Excludes 6 SY's proposed for redirection.
Note: Fiscal year 1997 Extramural Research Estimates are based on Actual
Agreements in fiscal year 1996.
Question. Again, you are justifying an increase for Integrated Pest
Management; yet you are recommending the termination of many projects
which deal with pest control; biocontrol; sustainability; reduced
herbicides; production systems beneficial to the environment;
conservation systems, etc. Please explain your rationale for the
elimination of many of these projects that target IPM goals.
Answer. ARS does not propose to terminate all research in these
areas, but only selected specific projects that have been judged to be
relatively less critical at this point in time. Also, other locations
could fill any critical gaps created by the terminations. Factors
considered as a major part of the rationale in making these judgments
were research relevance, impact, degree of Federal role, benefit to the
public at large, adequacy of resource level to sustain a critical mass
effort, and others.
ars research
bee research
Question. Please provide a map indicating the history of the
Africanized bee migration from South America. Where are its current
boundaries?
Answer. A map reflecting the history of the Africanized bee
migration from South America and its current boundaries is provided.
[GRAPHIC] [TIFF OMITTED] T01AP22.055
Question. Where do you project the Africanized bee population will
ultimately extend?
Answer. There have been several projections on how far the
Africanized honey bee (AHB) migration will ultimately extend. The
actual migration will depend on the impact of parasitic mites, climate,
availability of food throughout the year, and competition for food from
the commercial European honey bees (EHB).
We predict that along the Pacific coast, the Africanized bee will
extend its range as far north as San Francisco, on a seasonal basis if
not permanently. Similarly, along the East coast it may extend its
range to Norfolk, Virginia, on a seasonal basis if not permanently. In
the South, we believe that ultimately the Africanized bee will migrate
to and establish in the southern States--Florida, Georgia, Alabama,
Mississippi, Arkansas--along the Gulf Coast.
However, as the Africanized bees extend their range northward, they
will, through matings with the commercial European bees over many
generations, lose their distinctive genetic and behavioral
characteristics. This is expected to happen because by mating with
local bees in successive generations, the genetic material of AHB will
be diluted out to the point that it would be difficult to distinguish
the hybrid from the European bees.
Question. What is the status of Varroa and Acarine mites? What
research is being done on these pests? At what locations?
Answer. Varroa and Acarine mites continue to cause significant
economic losses to beekeepers. However, honey bee colony losses this
past winter have been light compared to those in the previous winters.
This is probably due, in large part, to the relatively mild winter and
increased beekeepers' attention to monitoring and treating with
available acaricides. Most beekeepers lose bee colonies to mites during
the winter. Consequently, beekeepers must replace these colonies in the
spring. The high demand for honey bee queens drives up the cost of
starting new colonies to make up for the winter loss of colonies. This,
in turn, increases the cost of rental bees to the farmers and vegetable
and fruit growers.
New and improved methods of mite control are being developed at
four ARS locations. Scientists at the Honey Bee Research Units at
Weslaco, Texas, and Tucson, Arizona, are developing new and improved
methods for chemical control of mites; the Bee Research Laboratory at
Beltsville, Maryland, is focused on finding natural products including
such things as clove oil, eucalyptus, and thymol for mite control.
Scientists are conducting research on developing a gel formulation of
formic acid, which is being tested for efficacy in controlling mites
under different climates in Texas, Nebraska, and Minnesota. Scientists
at the Honey Bee Breeding, Genetics, and Physiology Research Unit at
Baton Rouge, Louisiana, are working on selection and propagation of
mite resistant stocks of honey bees.
Question. How much is the agency spending on honey bee research by
location for fiscal years 1997 and 1998?
Answer. In fiscal year 1997, funding for honey bee research is
$4,720,000. This excludes funds for ``other pollinating insects'' in
the amount of $1,193,100. The ARS total bee research budget in fiscal
year 1997 amounts to $5,913,100. The proposed fiscal year 1998 funding
remains at the same level. Honey bee research by location is provided
in the following table.
------------------------------------------------------------------------
Fiscal year--
Location -------------------------------
1997 funds 1998 funds
------------------------------------------------------------------------
Tucson, AZ.............................. $1,021,900 $1,021,900
Baton Rouge, LA......................... 1,115,600 1,115,600
Beltsville, MD.......................... 1,772,800 1,772,800
Weslaco, TX............................. 809,700 809,700
-------------------------------
Total............................. 4,720,000 4,720,000
------------------------------------------------------------------------
Question. Please breakdown your spending by honey bee research;
Africanized bee research, Varroa mite research, and Acarine mite
research. How many scientists are involved in these areas of research?
Answer. A breakdown in spending by honey bee research, Africanized
bee research, Varroa mite research, and Acarine mite research is
provided in the following table.
------------------------------------------------------------------------
Fiscal year 1997--
Area of research ----------------------------
Funds Scientists
------------------------------------------------------------------------
Honey bee research......................... $4,720,000 \1\ 19
Africanized bee research................... 1,860,000 8
Varroa mite research....................... 417,700 1
Acarine mite research...................... 941,900 4
------------------------------------------------------------------------
\1\ This excludes ``other pollinating research'' of $1,193,100 and 4
scientists.
Question. By location, how many scientists working on bee-related
research are on board and how many positions are unfilled?
Answer. The following table provides, by locations, the number of
scientists on board working on bee-related research and the number of
unfilled positions.
------------------------------------------------------------------------
Number of
Location Number of unfilled
scientists positions
------------------------------------------------------------------------
Tucson, AZ.................................... 5 ...........
Baton Rouge, LA............................... 4 ...........
Beltsville, MD................................ 8 ...........
Weslaco, TX................................... 3 1
Logan, UT..................................... 3 1
------------------------------------------------------------------------
range research
Question. Specify the objectives of ARS range research?
Answer. The primary objective of the ARS rangeland research program
is the development of better practices for the management of range
vegetation and livestock practices which not only sustain profitable
production of meat and fiber but also protect the soil and vegetation,
maintaining the ability of rangelands to function as watersheds and
provide wildlife habitat. For example, research at certain locations
focuses on how to manage rangelands during periods of drought. Another
objective of the rangeland research program is to develop a better
understanding of the ecological processes which characterize these
complex environments, such as nutrient cycling, the hydrological cycle,
and the effects of grazing on the many kinds of plants which grow on
rangelands. This work supports the development of computer models and
decision-support tools which allow managers of both public and
privately-owned rangelands to select the best options from among the
alternatives available to them. The ecosystem research also provides
the fundamental knowledge upon which improvements can be made in
natural resource conservation and environmental protection. ARS
research focuses on the development of more productive and drought-
tolerant forage grasses, provides information concerning the biology
and control of introduced weeds, and provides better ways to avoid
livestock losses due to poisonous weeds. ARS laboratories in the
eastern U.S. and in foreign countries support the research directed at
range weed control and poisonous plants by evaluating potential
biological control agents and characterizing the chemistry of plant
toxins.
Question. Which locations carry out these objectives? What funds
were obligated in fiscal year 1996? What is your funding estimate for
fiscal years 1997 and 1998?
Answer. The locations and funds allocated for fiscal years 1996-
1998 to carry out these objectives are as follows:
----------------------------------------------------------------------------------------------------------------
Fiscal year--
Location -----------------------------------------------
1996 funds 1997 funds 1998 funds
----------------------------------------------------------------------------------------------------------------
Booneville, AR.................................................. $247,090 $253,300 $253,300
Tucson, AZ...................................................... 320,292 320,100 320,100
Albany, CA...................................................... 166,980 166,900 122,800
Fresno, CA...................................................... 578,386 536,100 536,100
Ft. Collins, CO................................................. 565,592 659,600 643,600
Boise, ID....................................................... 498,070 495,700 495,700
Dubois, ID...................................................... 319,813 309,300 309,300
Columbia, MO.................................................... 30,393 30,000 30,000
Beltsville, MD.................................................. 110,474 106,400 106,400
Frederick, MD................................................... 132,858 124,100 124,100
Bozeman, MT..................................................... 461,737 .............. ..............
Miles City, MT.................................................. 481,910 438,700 719,800
Sidney, MT...................................................... 3,170,921 1,891,300 1,891,300
Lincoln, NE..................................................... 156,302 102,000 102,000
Mandan, ND...................................................... 601,398 555,200 ..............
Las Cruces, NM.................................................. 1,107,472 1,046,300 1,346,300
El Reno, OK..................................................... 139,291 .............. ..............
Burns, OR....................................................... 381,400 350,700 350,700
Woodward, OK.................................................... 1,199,756 1,066,700 1,066,700
Temple, TX...................................................... 1,432,860 1,342,300 1,342,300
Weslaco, TX..................................................... 332,014 318,900 318,900
Logan, UT....................................................... 1,680,204 1,404,800 1,404,800
Cheyenne, WY.................................................... 798,269 708,000 708,000
Buenos Aires, Arg............................................... 283,237 258,100 258,100
Montpellier, France............................................. 573,567 496,000 496,000
-----------------------------------------------
Total..................................................... 15,770,286 12,980,500 12,946,300
----------------------------------------------------------------------------------------------------------------
Question. Please explain how your range research objectives relate
to those of the Forest Service, BLM, and Interior.
Answer. ARS range research objectives directly support the research
needs and objectives of the Forest Service, Bureau of Land Management,
and Bureau of Reclamation of the Department of the Interior, in that
the technology and knowledge produced by the ARS range research
programs are often directly applicable to their specific problems. Much
of the ARS range research is conducted in western States where most
rangeland is managed by the Forest Service and Bureau of Land
Management. Such research is often conducted cooperatively by ARS and
other Federal agencies. Rangeland research conducted by the Forest
Service is primarily directed at maintenance and restoration of native
plants and animals and their habitats, biodiversity, shrub ecology, and
monitoring of the ecological status of rangelands. Forest Service
research does not address the agricultural use of rangelands for food
and fiber production, with the exception of a program concerned with
overlap of habitat requirements for livestock and wildlife. The Bureau
of Land Management and the Bureau of Reclamation have little in-house
research capability, and they are considered to be important customers
by ARS range researchers. Similarly, the ARS range research program
supports the needs of the Natural Resources Conservation Service for
science and technology related to improved management and conservation
of privately-owned rangelands.
aquaculture research
Question. Please list those locations involved in aquaculture
research, their specific programs and current funding and staffing.
Answer. The funding and scientists for aquaculture by location are
as follows:
------------------------------------------------------------------------
Fiscal year 1997--
Location ---------------------------
Funds Scientists
------------------------------------------------------------------------
Auburn, AL.................................. $841,800 3.0
Pine Bluff, AR.............................. 373,300 2.0
Stuttgart, AR............................... 1,235,600 4.0
Hilo, HI, Oceanic Inst...................... 1,612,400 ..........
New Orleans, LA............................. 759,400 2.4
Beltsville, MD.............................. 142,800 ..........
Stoneville, MS:
Warm Water Aquaculture.................. 2,652,000 2.5
Other--In-house......................... 505,100 2.5
---------------------------
Total MS.............................. 3,157,100 5.0
Wyndmoor, PA................................ 250,000 1.0
Kearneysville, WV........................... 1,447,200 ..........
Headquarters, College Sta., TX.............. 365,200 ..........
---------------------------
Total................................. 10,184,800 17.4
------------------------------------------------------------------------
The specific ARS aquaculture research programs are as follows:
Auburn, AL.--Diagnosis and control of diseases and parasites of
cultured fish.
Beltsville, MD.--Aquaculture Information Center. Provides the
public with information on aquaculture.
Albany, CA (Hilo, HI).--Tropical aquaculture, feeds and culture
technology development.
New Orleans, LA.--Improve flavor quality of farm-raised catfish.
Pine Bluff, AR.--Aquaculture production and processing technology.
Stoneville, MS.--Improve production efficiency, including breeding,
genetics, and endocrinology of catfish.
Kearneysville, WV.--Water quality control and intensive culture of
fish.
College Station, TX.--Food safety of catfish.
Stuttgart, AR.--Research on therapeutics evaluation, health
management and culture systems for farm-raised fish.
Dover, DE (Wyndmoor, PA Worksite).--Food safety of farm-raised
fish.
Question. What accomplishments are being generated from aquaculture
research?
Answer. ARS scientists conducting disease research at Auburn, AL
have demonstrated that some strains of commercial channel catfish have
resistance against columnaris disease. Columnaris disease, caused by
the bacterium Cytophaga columnaris, is responsible for widespread
mortality in channel catfish farms. Through a Cooperative Research and
Development Agreement with Gold Kist, Inc., Inverness, MS, ARS
scientists at the Fish Diseases and Parasites Research Laboratory,
Auburn, AL, demonstrated that some strains of channel catfish
selectively bred by Gold Kist were more resistant than other strains to
mortality from columnaris disease. Selective breeding of the resistant
strains should result in commercial catfish less susceptible to
columnaris disease. This could reduce losses to the disease by $10 to
$15 million annually.
ARS scientists at Auburn, AL, have developed an experimental
vaccine to control enteric septicemia of commercial catfish.
Edwardsiella ictaluri causes the disease, enteric septicemia, in
catfish. Losses from the disease reduce catfish farm revenues by $25
million annually. Scientists at the Fish Diseases and Parasites
Research Laboratory, Auburn, AL, have developed a modified live vaccine
to protect commercial catfish. Protection from the vaccine lasts 6
months or more. While the vaccine is presently applied through
immersion of the fish in water, the ARS scientists are working on feed-
delivery of the vaccine for catfish fingerling producers.
ARS scientists at Stuttgart, AR, have shown that disease treatment
with copper sulfate poses no hazard to human consumers of cultivated
food fish. Cooper sulfate has been effectively used for many years as a
treatment for waterborne parasitic, bacterial, and fungal diseases of
cultivated fish, but has never been approved by the U.S. Food and Drug
Administration (FDA) for use on food fish because of questions about
human food safety. Scientists at the National Aquaculture Research
Center, Stuttgart, AR, demonstrated that copper concentrations in fish
tissue remain unchanged when cultivated channel catfish are exposed to
levels of copper sulfate far in excess of concentrations required to
treat diseases. The FDA has accepted the results of the study as
demonstrating that the use of copper sulfate for treatment of
waterborne diseases of cultivated food fish presents no hazard to the
health of human consumers.
ARS scientists in Stoneville, MS, have developed genetically
improved strains of channel catfish for commercial culture. Commercial
use of improved catfish germplasm, developed through an applied
selective breeding program, will dramatically improve production
efficiency in commercial catfish production. Scientists at the Catfish
Genetics Research Unit, Stoneville, MS, have evaluated and selected
strains of channel catfish for commercially important traits such as
growth, reproductive performance, processing characteristics, and
disease resistance. DNA markers, termed microsatellites, have been
isolated and characterized; the microsatellites are useful for
identifying and tracking genetically improved strains. These markers
will form the basis of a catfish genetic map that will improve the
efficiency of genetic selection in this species.
Canned bighead carp products developed by an ARS food technologist
at Pine Bluff, AR, were evaluated by consumer taste panels and were
found to have a high level of acceptance.
ARS scientists in New Orleans, LA, have developed highly sensitive
methods to detect off-flavor compounds in farm-raised catfish. The high
incidence of environment-derived off-flavors in farm-raised catfish has
consistently been identified as the most important production-related
problem in the catfish aquaculture industry. Scientists at the Southern
Regional Research Center have developed extraction and gas
chromatographic methods that can detect geosmin and MIB, the two most
important catfish off-flavor metabolites, at concentrations near the
theoretical limits of the most sensitive electronic sensors and equal
to the levels of human perception.
Scientists at Shepherdstown, WV, have developed an improved
ultrasonic waste feed monitor through a cooperative arrangement with
the University of Mississippi's National Center for Physical Acoustics.
This device efficiently detects waste feed, while ignoring fecal
material, and represents an improvement over earlier technology
developed by these scientists. The device is currently being
commercialized through a California computer company.
Funding levels provided for the cooperative research program with
the Freshwater Institute are $1,447,200 in both fiscal year 1997 and
fiscal year 1998.
fruit fly research
Question. Please detail the fruit fly research program.
Answer. The ARS fruit fly research program encompasses a diversity
of approaches that address the issues of detection, control and
eradication of pest species. Major emphasis is placed on the following
seven fruit fly species: Mediterranean, Oriental, Caribbean, Mexican,
Melon, Malaysian, and Papaya. Innovative research programs include the
development of new, sensitive traps for detecting fruit flies;
development of an environmentally acceptable toxicant as a replacement
for malathion in bait sprays, including photoactivated dyes; commodity
treatments to allow movement of fruit-fly host material from areas
quarantined for fruit flies; biological control with fruit fly specific
parasites to reduce the level of pest populations; enhancement of
natural resistance of host fruit to infestations; and improvements in
competitiveness of sterile flies released as a part to the sterile
insect technique. Taken together, these programs provide an integrated
approach to the control of pest species of fruit flies, that emphasizes
early detection with more effective traps, reduction in the pest
populations through biological control with parasites and
environmentally acceptable pesticides, and improvements in the sterile
insect technique.
Question. Where is this research carried out?
Answer. Research on fruit flies is based at the following eight ARS
locations: Albany, CA; Fresno, CA; Gainesville, FL; Miami, FL; Orlando,
FL; Hilo, HI; Beltsville, MD and Weslaco, TX.
Question. How much money was obligated for each of those pests in
fiscal year 1996; what is currently planned and what is your estimate
in fiscal year 1998?
Answer. The amounts for each pest species are as follows:
----------------------------------------------------------------------------------------------------------------
Fiscal year--
-----------------------------------------------
Species 1996
obligations 1997 funds 1998 funds
----------------------------------------------------------------------------------------------------------------
Caribbean Fruit Fly............................................. $1,652,744 $1,539,600 $1,539,600
Malaysian Fruit Fly............................................. 766,054 745,500 745,500
Mediterranean Fruit Fly......................................... 3,242,847 3,240,400 3,240,400
Melon Fruit Fly................................................. 845,814 823,400 823,400
Mexican Fruit Fly............................................... 947,197 781,400 781,400
Oriental Fruit Fly.............................................. 1,076,926 1,066,300 1,066,300
Papaya Fruit Fly................................................ 175,098 176,000 176,000
Other Fruit Flies............................................... 2,124,327 2,086,700 2,086,700
-----------------------------------------------
Total..................................................... 10,831,007 10,459,300 10,459,300
----------------------------------------------------------------------------------------------------------------
sugar crops research
Question. Please describe your research in sugar crops.
Answer. Research on sugar crops includes breeding for improved
cultivar adaptation to stress environments and increased levels of pest
and disease resistance; more efficient production systems; improved
management for pest, disease and weed control; and development of
value-added coproducts of sugarcane production.
Question. Where is the research performed? What is the current and
projected funding for this research?
Answer. Listed below are the locations where research is performed
and the fiscal year 1997 and 1998 funding for this research.
------------------------------------------------------------------------
Fiscal year--
Location -------------------------------
1997 funds 1998 funds
------------------------------------------------------------------------
Albany, CA.............................. $21,900 $21,900
Salinas, CA............................. 1,314,400 1,314,400
Ft. Collins, CO......................... 620,300 620,300
Canal Point, FL......................... 891,600 891,600
Miami, FL............................... 108,600 108,600
Hilo, HI................................ 1,491,700 1,491,700
Peoria, IL.............................. 94,000 94,000
Urbana, IL.............................. 217,400 217,400
New Orleans, LA......................... 2,101,900 1,702,000
Beltsville, MD.......................... 951,800 951,800
Frederick, MD........................... 32,000 32,000
East Lansing, MI........................ 659,700 659,700
Sydney, MT.............................. 111,500 111,500
Fargo, ND............................... 1,080,200 1,080,200
Wyndmoor, PA............................ 62,600 62,600
Mayaguez, PR............................ 95,600 95,600
College Station, TX..................... 219,700 219,700
Weslaco, TX............................. 319,900 319,900
Headquarters............................ 64,000 64,000
-------------------------------
Total............................. 10,458,800 10,058,900
------------------------------------------------------------------------
Question. Please discuss recent accomplishments in sugar crops
research.
Answer. Recent accomplishments for sugarcane and sugarbeets are
provided for the record.
Sugarcane--(1) The research team in Houma, Louisiana has made major
advances in breeding for resistance to sugarcane rust, smut, yellow
leaf syndrome and leaf scald. Four recent cultivars, were developed.
These cultivars have the potential of increasing sugar yields per unit
area by 10-25 percent. The team has released 6 varieties in the last 6
years and has registered 5 germplasm clones with superior resistance to
the sugarcane borer. (2) Research in Florida is focusing on the
development of sugarcane that can be grown under high water table
conditions. Varietal selections have been made that tolerate these
conditions in the changing south Florida ecosystem environment. Studies
are also in progress on reducing the levels of phosphorus applied to
sugarcane and preliminary results show that concentrations of
phosphorus applied to the crops may be reduced without affecting plant
growth.
Sugarbeets--(1) Research in Fargo, North Dakota, on development of
a biopesticide for control of sugarbeet root maggot has shown that
selected strains of Bacillus thuringiensis can be used to infect the
maggot achieving high mortality. In addition, a germplasm line has been
selected that has a high level of resistance to the root maggot. (2)
ARS researchers have released sugarbeet lines with resistance to
Cercospora leafspot disease, Rhizoctonia root disease, and Rhizomania,
three of the most serious diseases of sugarbeet.
lower delta nutrition research
Question. Please describe your progress in establishing and
coordinating research and intervention activities in the Lower Delta.
Answer. The Lower Mississippi Delta Nutrition Intervention Research
Initiative (Delta NIRI) involves a consortium of seven partners: Alcorn
State University, Arkansas Children's Hospital Research Institute,
Pennington Biomedical Research Center, Southern University and A&M
College, University of Arkansas at Pine Bluff, University of Southern
Mississippi, and the Agricultural Research Service (USDA/ARS). The
consortium is publishing a monograph of existing data relative to the
nutritional status and health of people in the Delta of Arkansas,
Louisiana, and Mississippi. Thirty-six counties (10 in Arkansas, 12 in
Louisiana, 14 in Mississippi) have been selected for the research based
on rates of unemployment, population, and percent of population below
the poverty level. A key informant survey has been piloted and the main
survey will be implemented in the 36 counties in May/June, 1997. With
direction from a USDA Scientific Review Board, a pilot/validation study
to determine the feasibility of using telephone interview methodology
to obtain food consumption and food security data will be underway
during the summer of 1997. This information will be used as baseline
data to evaluate the impact of welfare reform programs in the area at a
later time. Other research protocols are being developed, i.e., a
community assessment survey and a longitudinal study of nutritional
status of select segments of the population.
Question. Please list objectives and funding by participant. Does
the Agency still consider this to be a ten-year program?
Answer. The overall objective of the project is ``to design,
implement, and to experimentally test nutrition interventions that will
improve the health and well-being of people in the Lower Mississippi
Delta.'' This objective is consortium-wide with each partner
participating in each of them. To further this objective, each partner
is participating in capacity building and hiring at least one new
nutrition related scientist. Each participant in the Lower Delta
Nutrition Intervention Initiative is currently funded at $448,100. ARS
considers this to be a major assessment and intervention study which
will require 10 years to complete.
Question. What is your overall funding?
Answer. The overall funding of the program in fiscal year 1997 is
$3,166,900. Of this, the Agricultural Research Service receives
$478,300 and each of the other partners is funded at $448,100 each.
Question. Describe your accomplishments to date.
Answer. A functioning and fully participatory consortium of seven
diverse partners was organized, and they have identified the problems
to be addressed based on an understanding of the information that is
available regarding the needs of the population of the Lower
Mississippi Delta. A monograph describing existing data about the
nutritional health and well being of the population was written and is
soon to be published. An electronic communication system among the
partners (including electronic mail, fax, and video conferencing) was
implemented and is in regular use. A pilot study of key informants as
part of a larger community assessment was implemented.
Advisory Groups were established in each State. A pilot/validation
study of food consumption and food security was developed. All partners
participated in three capacity building workshops focused on
nutritional and dietary assessment methods, community assessment
methods, and nutrition intervention methodology.
Question. To what extent do you classify your activities as
intervention as opposed to research?
Answer. The proposed activities are research. Although the main
objective of the project is to carry out nutrition intervention
research, the interventions will be experimentally tested (with
controls) to determine which interventions are effective and can be
sustained in the Delta. Such information can then be used by other
agencies to design and implement effective interventions based on the
results of sound research.
Question. What is your funding goal for this program?
Answer. An effective nutrition intervention research program is
projected to require $10.5 million per year. This level of support will
provide for complete cross-sectional and longitudinal data collection.
The data collected will determine specific nutritional and food related
problems that could be amenable to interventions and development and
testing of the nutrition intervention methodology. The proposed funding
for the Lower Delta Nutrition Intervention Initiative activities in
fiscal year 1998 is $3,166,900.
Question. What level of funding is included in the fiscal year 1998
request for the Lower Delta Nutrition Initiative?
Answer. The fiscal year 1998 budget request is $3,166,900 which is
the same level of funding as the current fiscal year.
animal science research
Question. Please identify priority research needs in the area of
animal production efficiency research. Identify funding requirements
and current resources.
Answer. Current resources for animal production efficiency research
total $43,024,000. The animal production program includes research on:
dairy and beef cattle, swine, chickens, turkeys, goats, sheep, and
aquaculture.
The overall goal of the ARS program of research is to improve the
sustainability and competitiveness and long-term profitability of
animals used to produce food and fiber, while protecting the
environment. Research is conducted in the disciplines of genetics,
reproduction, nutrition, pre-harvest food safety, animal waste
management of integrated systems, grazingland management and product
quality. ARS scientist and laboratories are using the most recent
technologies to improve the efficiency of animal production, based on
ARS facilities and scientific capabilities. There are five high
priority areas in animal production that warrant additional research
effort. The budget proposes to expand and initiate new research in Pre-
harvest food safety in animal production systems--$1.6 million.
Pre-harvest Food Safety in Animals--$1.6 million of additional funding,
current resources total $9.5 million
Exposure, infection, and contamination of animals by certain
bacteria and parasites during production is a known source of pathogens
in our meat-based foods. Several components of the live animal sector
offer opportunity for significant reduction of pathogens in the animals
presented for slaughter. The dynamics of pathogen transmission and the
host parasite relationship of microbial organisms which are important
to food safety, must be elucidated in order to identify critical
control points.
Effective pathogen interventions, such as competitive colonization
systems, which have been successfully accomplished for broilers, need
to be developed to protect swine and cattle against Salmonella and E.
Coli 0157:H7. Production practices for cattle and swine must be
correlated with post-processing contamination of food products. The
dynamics of Campylobactor transmission during production must be
delineated in order to identify control points and strategies to limit
contamination in poultry. Antibiotic resistance is emerging as a food
safety concern, and we need to characterize the epidemiology,
transmission and biological basis of the emerging resistance of
Salmonella typhimunium DT104 in order to prevent its occurrence and
maintain consumer confidence in meat and poultry based foods.
Question. Please update your priority research needs in the area of
animal health. Identify funding requirements.
Answer. The USDA-ARS Animal Health Program of research concentrates
on three areas: (1) emerging diseases within the U.S.; (2) chronic
animal diseases within the U.S. that cause production losses; and, (3)
foreign animal diseases that pose a threat to the U.S. livestock
industry. The 1998 budget request for ARS emerging diseases requested
$2.5 million in new funding research in these three categories as
follows: (1) porcine reproductive syndrome, bovine viral diarrhea, and
Cryptosporidia; (2) Johne's disease and transmissible spongiform
encephalopathies; and, (3) foreign animal diseases including classical
swine fever (hog cholera), highly pathogenic Avian Influenza, and
velogenic Newcastle Disease.
Question. ARS has a number of animal science laboratories. Please
explain the distinction of the research at these centers.
Answer. ARS has four major animal science laboratories. The Plum
Island Animal Disease Center (PIADC), Greenport, New York, is
responsible for research to protect U.S. animal industries and exports
against catastrophic economic losses caused by foreign animal disease
agents. The National Animal Disease Center (NADC), Ames, Iowa, conducts
basic and applied research on selected diseases of economic importance
to the U.S. livestock and poultry industries. The Roman L. Hruska U.S.
Meat Animal Research Center (MARC), Clay Center, Nebraska, is
responsible for efficiency of production that includes reproductive
efficiency, nutrition, production and health systems, genetics,
germplasm and gene mapping, environmental stress, manure management and
product safety and quality research for the U.S. beef, sheep, and swine
industries. The Livestock and Poultry Sciences Institute (LPSI),
Beltsville, Maryland, conducts fundamental research to improve genetic
evaluation techniques for dairy breeding, develops knowledge of the
genomes/germplasm of livestock, identifies factors that affect growth
and lactation, controls parasitic diseases, improves the efficient use
of dietary nutrients for livestock and poultry, and develops techniques
to enhance the quality and safety of meat and poultry products.
In addition, ARS has animal sciences laboratories at a number of
locations that focus on regional problems such as aquaculture, forage/
grazingland production systems, and other animal health related issues.
Question. How are these programs coordinated?
Answer. All ARS research programs are coordinated by the National
Program Staff (NPS), which consists of approximately 30 National
Program Leaders (NPL's), 3 Associate Deputy Administrators (ADA's), and
the Deputy Administrator for national programs. The NPS professional
staff members are distinguished scientists in their fields. The work of
the ARS animal science laboratories is managed by one or more NPL's
with expertise in various disciplines of animal and veterinary sciences
under the leadership of the ADA for Animal Production, Product Value
and Safety. In establishing national research programs relating to
animals, the NPL's focus the work of the scientists on addressing
specific problems of high national priority.
The recent restructuring of NPS and the aggregation of 1,100
research projects in 25 national programs, is changing the way ARS
manages its research activities. The new broader-based national
programs will be coordinated by multi-disciplinary teams of NPL's. This
new organizational structure will improve program management, and make
it easier for ARS to meaningfully involve customers and stakeholders in
the process of setting research priorities and increase the rate and
timeliness of knowledge, technology, and information transfer to
potential users. The new approach in managing NPS and its research
programs will also make ARS more responsive to meeting the priorities
identified by Congress in the Farm Bills and Appropriations measures.
Question. Provide current funding and staffing levels for each.
Answer. The current funding and scientific staffing levels for
animal science research by location are as follows:
------------------------------------------------------------------------
Fiscal year 1997--
Location ----------------------------
Funds Scientists
------------------------------------------------------------------------
Auburn, Alabama............................ $841,800 3.0
Booneville, Arkansas....................... 971,700 2.9
Fayetteville, Arkansas..................... 917,800 4.5
Brooksville, Florida....................... 415,700 1.5
Gainesville, Florida....................... 4,288,500 15.0
Athens, Georgia............................ 4,138,300 12.9
Hilo, Hawaii............................... 1,612,400 ...........
Dubois, Idaho.............................. 1,700,600 3.6
Peoria, Illinois........................... 919,900 ...........
West Lafayette, Indiana.................... 985,600 3.0
Ames, Iowa................................. 189,200 1.0
Ames, Iowa (NADC).......................... 18,354,200 46.0
Beltsville, Maryland (LPSI)................ 23,725,900 55.6
East Lansing, Michigan..................... 2,705,100 9.1
St. Paul, Minnesota........................ 194,700 1.0
Mississippi State, Mississippi............. 818,400 3.6
Stoneville, Mississippi.................... 3,157,100 2.5
Columbia, Missouri......................... 629,000 2.0
Miles City, Montana........................ 1,745,100 5.3
Clay Center, Nebraska (MARC)............... 13,566,800 37.3
Lincoln, Nebraska.......................... 874,900 1.0
Ithaca, New York........................... 265,900 1.0
Greenport, New York (PIADC)................ 9,853,300 6.9
Raleigh, North Carolina.................... 149,700 0.8
Fargo, North Dakota........................ 931,900 3.5
El Reno, Oklahoma.......................... 346,400 .8
Wyndmoor, Pennsylvania..................... 186,800 .6
Bushland, Texas............................ 308,200 1.2
College Station, Texas..................... 2,155,100 8.7
Kerrville, Texas........................... 2,939,600 9.0
Logan, Utah................................ 1,833,600 6.6
Pullman, Washington........................ 2,059,700 6.0
Beckley, West Virginia..................... 496,300 1.5
Kearneysville, West Virginia............... 1,447,200 ...........
Madison, Wisconsin......................... 1,574,000 5.5
Laramie, Wyoming........................... 2,199,300 6.0.8
Panama City, Panama........................ 997,900 2.0
H.Q. Administered Funds.................... 4,454,800 ...........
----------------------------
Total................................ 114,952,000 273.9
------------------------------------------------------------------------
fruit and nut research
Question. Describe your current program in fruit and nut research?
Answer. The current program in fruit and nut research includes
research activities on many different fruit and nut crops including
apples, pears, oranges, grapefruit, lime, lemon, plum, peach, prune,
strawberry, raspberry, blueberry, grape, pecan, walnut, hazelnut and
many minor tropical and subtropical crops. Projects include both pre-
and post-harvest investigations for improved product varieties and
quality. Projects at 35 locations involve both basic and developmental
research in plant breeding and genetics, physiology, entomology,
pathology, and engineering technologies.
Question. Where is it conducted? By location, provide major
research objectives, current funding, and staffing.
Answer. Research locations, current funding, staffing and major
research objectives are:
------------------------------------------------------------------------
Location 1997 funding Scientists
------------------------------------------------------------------------
Booneville, AR............................. $126,700 0.2
Tucson, AZ................................. 92,700 .5
Albany, CA................................. 3,096,000 10.9
Davis, CA.................................. 1,162,300 3.5
Fresno, CA................................. 3,667,200 10.9
Riverside, CA.............................. 57,500 .3
Salinas, CA................................ 491,000 .9
Ft. Collins, CO............................ 279,100 .5
Newark, DE................................. 33,200 .2
Winter Haven, FL........................... 63,200 .4
Montpellier, FR............................ 204,100 .9
Byron, GA.................................. 2,632,000 6.0
Tifton, GA................................. 51,100 ...........
Hilo, HI................................... 132,900 .3
Peoria, IL................................. 142,800 .7
Urbana, IL................................. 2,100 ...........
New Orleans, LA............................ 937,400 2.4
Beltsville, MD............................. 4,529,000 15.5
Frederick, MD.............................. 243,800 .9
Poplarville, MS............................ 871,800 4.0
Stoneville, MS............................. 133,400 .5
East Lansing, MI........................... 210,000 .5
Geneva, NY................................. 713,600 1.3
Wooster, OH................................ 296,400 1.5
Lane, OK................................... 188,100 .6
Corvallis, OR.............................. 2,967,800 8.6
Wyndmoor, PA............................... 372,500 1.5
Mayaguez, PR............................... 39,000 .1
College Station, TX........................ 590,200 2.0
Weslaco, TX................................ 199,000 .8
Prosser, WA................................ 26,600 ...........
Wenatchee, WA.............................. 1,520,200 6.0
Yakima, WA................................. 3,164.200 4.6
Beckley, WV................................ 44,100 .2
Kearneysville, WV.......................... 5,316,900 15.9
Headquarters............................... 1,022,900 ...........
----------------------------
Total................................ 35,620,800 103.1
------------------------------------------------------------------------
Booneville, AR.--Develop management practices for soil and water
and implement agroforestry techniques on family farms.
Tucson, AZ.--Improve bee pollination of crops and ecologically
important plants.
Albany, CA.--(1) Develop improved methods for detection of
compounds affecting healthfulness and quality of foods; (2) control of
nutritional properties of extruded cereal based foods; (3) detection of
aflatoxin contamination in human foods by imaging technologies; (4)
image analysis and other physical methods for detection of unwanted
matter in fresh and processed food for improved quality. Other projects
include: (1) the modification of vegetable oils as raw materials for
industrial uses; (2) development of edible coatings to keep lightly
processed vegetables fresh; (3) devise innovative processing to develop
value-added fruits and vegetables for foreign markets; (4) control
aflatoxin in tree nuts using biocontrol procedures; and (5) genetically
engineer resistance and reduce aflatoxin in tree nuts and figs by
decreasing invasion of Aspergillus flavus caused by insects.
Davis, CA.--Develop control practices for bacterial and viral
diseases of fruit and nut trees and grapes, resistant rootstocks or
cultivars, and chemical treatments to eliminate pre-plant fumigation
with methyl bromide.
Fresno, CA.--Develop quarantine/post-harvest control strategies to
reduce losses by insect pests in the investigation of new fumigants and
methodologies to reduce methyl bromide emissions. This includes: (1)
research on reducing or eliminating chemical pesticides and developing
alternative biological and physical treatments and integrated pest
management control procedures. Research is also being done to develop
alternatives to methyl bromide in the management of soil pests. In
addition, Prunus and Vitis germplasm is hybridized for increased pest
resistance, drought and salinity tolerance with improved fruit
characteristics. Control post-harvest decay utilizing microbial
biocontrol and improve commodity handling with reduced injury to fruit.
Determine the feasibility of cropping systems utilizing subsurface drip
irrigation to apply alternative fumigants as well as irrigation.
Riverside, CA.--Determine the fate and transport of alternative
fumigants to methyl bromide in field application. Salinas, CA--Develop
biologically-based or chemical alternatives to methyl bromide as a soil
fumigant for control of soilborne pests of strawberry as a component of
integrated management strategies for suppression and control of
soilborne pests in strawberry and vegetable crops.
Salinas, CA.--Development of preplant soil treatments as
alternatives to the use of methyl bromide in the production of
strawberries.
Ft. Collins, CO.--Determine the physiological and biochemical
factors responsible for loss of seed viability and deterioration in
storage and develop improved storage methods.
Newark, DE.--Develop biological control of selected insect pests:
Tarnished Plant Bug, Alfalfa Plant Bug, and Sweetpotato Whitefly (in
greenhouses) and quarantine evaluation of predators of Russian Wheat
Aphid.
Winter Haven, FL.--Develop alternative chemical and non-chemical
treatments for preserving quality and improving convenience of
minimally processed fresh fruits and vegetables.
Montpellier, FR.--Discover, collect, and ship to the U.S. new
natural enemies to reduce populations of codling moth, gypsy moth, pear
thrips, pear psylla, and apple ermine moth.
Byron, GA.--(1) Breed and develop deciduous peach fruit cultivars
and rootstocks adapted to the Southeast. (2) Develop control strategies
for insect problems of deciduous fruit. (3) Identify and develop
improved cultivation and disease management strategies for pecan. (4)
Identify factors affecting the nature and occurrence of disease and
nematode problems of deciduous fruits in the southeastern U.S. (5)
Develop disease and nematode management procedures based on biological
control and nonchemical methods for the management of post-harvest
diseases of stone fruits. (6) Develop alternative methods of biological
control for insect pests of pecan.
Tifton, GA.--Determine pesticide residues in food crops in support
of petitions to EPA through the IR-4 ``Minor Use'' project for
registration or reregistration of pesticide use.
Hilo, HI.--Develop novel and more efficient semiochemical based
eradication technology for fruit flies.
Peoria, IL.--Identify biologically active natural products and
determine their potential for commercial exploitation as herbicides,
fungicides, and plant growth regulators.
Urbana, IL.--Develop control measures for weeds in vegetables,
fruits and specialty crops and determine pesticide residues in
harvested products.
New Orleans, LA.--This multifaceted research program includes: (1)
investigation on the conversion of commodity by-products (nut shellers,
grain millers, oilseed crushers) to value-added absorbents and the
optimization of absorbent properties for removal of metals and
organics; (2) immunological studies on enzymes involved in aflatoxin
formation to investigate processes of aflatoxin formation; (3) clone
genes governing aflatoxin formation in studies designed to select
plants expressing compounds inhibitory to aflatoxin formation; and (4)
optimize the flavor and texture of fresh cut fruit products and develop
methodologies for predicting food sensory quality to meet consumer
demand.
Beltsville, MD.--(1) establish and implement area-wide pest
management for high priority agricultural pests of fruit and other
crops; (2) develop instrumentation to nondestructively assess apple
fruit quality; (3) develop methods to utilize gypsum byproducts for use
in field soil applications of fruit crops; (4) enhance the development
of blueberry cultivars utilizing molecular techniques to manipulate the
chilling required for flowering; (5) develop methods to genetically
transform raspberry and regenerate plants in tissue culture; (6)
develop and introduce new germplasm and cultivars of small fruits, such
as blueberry and strawberry, that are pest and disease resistant; (7)
develop molecular methods for detection and control of viruses and
viroids in fruits; (8) process prohibited foreign germplasm through
quarantine and deposit in U.S. repositories; (9) develop molecular
methods to detect and identify phytoplasms pathogens in plants; (10)
transfer genes and develop tissue culture methods to improve peach,
apple and pear; (11) increase quality and shelflife of fruit by
controlling ripening and softening; (12) reduce the use of fungicides
in control of post-harvest decay; and (13) determine the role of
membrane lipid metabolism and composition in fruit ripening, senescence
and quality.
Frederick, MD.--Identify casual agents of graft and insect
transmissible disorders of foreign horticultural germplasm and develop
rapid methods of detection of exotic pathogens.
Poplarville, MS.--Develop new and improved muscadine grape and
other small fruit cultural practices, management techniques and
germplasm for the Gulf States Region to increase yield, minimize
production losses and conserve natural resources.
Stoneville, MS.--Develop and integrate biological and other non-
pesticidal methods for control of insect and mite pests of pecan.
East Lansing, MI.--Develop, evaluate and implement new technologies
to reduce post-harvest handling damage and nondestructively measure
fruit quality for fresh markets and maintain U.S. competitiveness in
international markets.
Geneva, NY.--Acquire, maintain, characterize and distribute apple,
grape, and sour cherry genetic resources from this national collection.
Wooster, OH.--Develop improved spray application technology for
crop protection using surfactants to reduce crop damage, reduce cost
and energy use as well as pollution of the environment.
Lane, OK.--Characterize the physiological changes occurring during
storage and ripening of small fruits and utilize this information to
develop practices leading to increased shelflife.
Corvallis, OR.--Evaluate genetic variability within raspberry,
blueberry, and strawberry and identify traits, individuals and
populations valuable to breeding programs.
Wyndmoor, PA.--Develop and utilize pectin by-products from fruit in
the production of biodegradable polymers.
Mayaguez, PR.--Acquire, preserve, characterize and distribute
valuable tropical and subtropical germplasm.
College Station, TX.--Characterize genetic diversity of existing
pecan and hickory cultivars and develop improved pecan cultivars with
disease and pest resistance.
Weslaco, TX.--Develop a systems approach to quarantine security for
tropical and subtropical fruits with emphasis on fruit flies.
Prosser, WA.--Develop chemical control measures for weeds in fruit
crops and determine herbicide residues in crops and soils.
Wenatchee, WA.--Determine the factors that influence the
development of fireblight disease and develop environmentally sound
management practices.
Yakima, WA.--(1) Develop new control methods for green peach aphid
and Colorado Potato Beetle utilizing beneficial agents in biological
control; (2) develop areawide control program for codling moth using
pheromones sterile insects and other biological control agents; (3)
determine the amount persistence and fate of insect control chemicals
and their toxic breakdown products; and (4) provide efficacy,
phytotoxicity, and yield data residue samples for analyses to support
the registration of minor use pesticides.
Beckley, WV.--Develop agroforestry systems that incorporate
production of high-value specialty products to fill niche markets.
Kearneysville, WV.--(1) Identify and isolate genes affecting fruit
development; (2) develop enhanced pear and plum cultivars with disease
and pest resistance and improved fruit yield and quality; (3) identify
and characterize genes associated with cold hardiness and stress
resistance; (4) develop pest management methods to reduce pesticide use
in deciduous fruit tree production systems; (5) develop plant-based
technologies to treat water and concurrently produce a high-value
product; (6) develop principles and mechanisms for improved harvesting
of fruits for fresh market; (7) develop improved orchard practices
affecting fruiting, fruit development and stress tolerance; (8) develop
information on interactions between soilborne pests, root development
and plant growth; (9) evaluate cover crop species and organic
amendments on soilborne disease organisms and weeds as alternatives to
methyl bromide; (10) examine the effects of cultural management
techniques on the severity of fireblight in apple; (11) develop
fundamental knowledge of the microbial community on fruit surfaces and
methods for control of pre- and post-harvest disease and soilborne
disease; and (12) develop nondestructive sensors measuring the post-
harvest quality of apples and incorporate the sensing techniques into
an automatic inspection system for sorting apples based on surface and
internal defects.
Headquarters.--Staffing and operation of national clonal
repositories for plant germplasm including fruits.
Question. Does the fiscal year 1998 budget propose decreases in
this area?
Answer. The fiscal year 1998 budget proposes decreases in small
fruits research and in development of instrumentation for the
nondestructive assessment of apple fruit quality in Beltsville,
Maryland. A decrease has also been proposed for herbicide work on drip
irrigation in grapes with the proposed closure of the ARS location in
Prosser, Washington.
small grains research
Question. Describe your current program for each of the small
grains.
Answer. The small grains include wheat, oat, barley, and rice. We
have research on wheat at 38 locations, oat at 13 locations, barley at
16 locations, and rice at 19 locations. The Agricultural Research
Service's small grain research program is a nationally managed, fully
coordinated, multi-disciplinary approach to solving production and
postharvest issues. The thrusts of this research by location are:
Wheat
Albany, CA (PGEC)--Genetics modification and gene action
Albany, CA (WRRC)--Product quality and transformation
Riverside, CA--Salt tolerance
Ft. Collins, CO--Germplasm preservation
Newark, DE--Biocontrol
Gainesville, FL--Stored product insects
Athens, GA--Product composition and value
Aberdeen, ID--Preserve and evaluate germplasm
Peoria, IL--Toxin research
Urbana, IL--Virology
W. Lafayette, IN--Mechanisms of resistance to disease and insect
Manhattan, KS--Resistance to Hessian fly and rusts
Beltsville, MD--Stress physiology and disease resistance
Frederick, MD--Exotic diseases
Morris, MN--Production systems
St. Paul, MN--Spring wheat improvement and cereal rust research
Columbia MO--Wide crosses and cytogenetics
Stoneville, MS--Insect management
Sidney, MT--Management systems
Raleigh, NC--Disease resistance
Fargo, ND--Host-plant resistance, cytogenetics and quality evaluation
Mandan, ND--Production systems
Lincoln, NE--Genetic enhancement with emphasis on quality and virus
resistance
Geneva, NY--Genome database management
Ithaca, NY--Virus-vector interactions
Wooster, OH--Quality evaluation
El Reno, OK--Production systems
Stillwater, OK--Insect resistance and biocontrol
Corvallis, OR--Stress physiology
Pendleton, OR--Management systems
Brookings, SD--Production systems
College Station, TX--Aerial application technology
Lubbock, TX--Production systems
Temple, TX--Sustainable agriculture
Logan, UT--Wide crosses
Pullman, WA--Stress physiology, genetic improvement, disease resistance
and quality evaluation
Montpellier, FR--Biocontrol
Headquarters--Administrative activities
Oat
Albany, CA--Gene action and quality trait evaluation
Newark, DE--Biocontrol
Aberdeen, ID--Germplasm preservation, evaluation and enhancement
Urbana, IL--Virology
W. Lafayette, IN--Mechanisms of resistance--disease and insects
Ames, IA--Molecular basis of disease resistance
Beltsville, MD--Cold hardiness
St. Paul, MN--Genetic engineering and rust pathology
Ithaca, NY--Virus-vector interactions
Raleigh, NC--Disease resistance and cold hardiness
Fargo, ND--Quality trait research
Madison, WI--Quality and nutritional trait evaluation
Montpellier, FR--Biocontrol
Barley
Albany, CA--Gene action and transformation
Newark, DE--Biocontrol
Athens, GA--Pathology
Aberdeen, ID--Preserve evaluate and enhance germplasm
Urbana, IL--Virology
W. Lafayette, IN--Mechanisms of resistance--disease and insects
Beltsville, MD--Stress physiology
St. Paul, MN--Rust pathology
Sidney, MT--Weed control
Ithaca, NY--Virus-vector interaction
Raleigh, NC--Disease resistance and cold hardiness
Fargo, ND--Genetic transformation and virology
Stillwater, OK--Insect resistance
Madison, WI--Malting quality and fungal pathology
Pullman, WA--Disease resistance
Montpellier, FR--Biocontrol
Rice
Stuttgart, AR--Germplasm evaluations and enhancement
Albany, CA--Product utilization and value
Davis, CA--Molecular genetics
Riverside, CA--Salt tolerance
Gainesville, FL--Stored product insects
Athens, GA--Plant structure and composition
Aberdeen,ID--Germplasm preservation
Manhattan, KS--Stored product insects
New Orleans, LA--Product quality and utilization
Beltsville, MD--Molecular biology
Frederick, MD--Exotic diseases
St. Paul, MN--Wild rice
Geneva, NY--Genomic database management
Ithaca, NY--Mineral nutrition
Mayaguez, PR--Tropical agricultural systems
Beaumont, TX--Variety development
College Station, TX--Aerial application
Houston, TX--Children's nutrition
Madison, WI--Fungal pathology.
Question. Please describe and identify recent accomplishments in
this research.
Answer. More than 15,000 new accessions have been added to the
National Small Grain Germplasm Collection in the past 10 years. Well
over 400,000 accession samples have been distributed to scientists in
the U.S. and worldwide in the past decade. Small grain germplasm has
been evaluated for such traits as growth habit; agronomic spike-
panicle, and seed descriptors; disease and insect reaction data and
quality components. Characterization and evaluation data have been
included in the GRIN database. All genetic and cytogenetic stocks, that
have been analyzed or collected, have been systematically cataloged and
stored for use by scientists nationally and internationally.
Immunological and biochemical means have been developed to rapidly
identify wheat lines carrying the 1RS rye chromosome which is related
to some deleterious quality characteristics.
ARS geneticist/breeders have had lead responsibility in the
development of important varieties of rice, hard red spring wheat, club
wheat, malting barley and oats. ARS scientists have also coordinated
regional testing nurseries of all small grain species in all parts of
the country. Data from these nurseries have contributed information
toward the release of nearly all public small grain varietal releases
and many releases from private industry.
A novel gene was identified which controls aroma in a foreign rice
introduction. This gene will be valuable in U.S. breeding program. The
entire wheat and barley germplasm collection was evaluated and
resistance to the Russian wheat aphid identified. Sources of resistance
have been incorporated into improved germplasm lines, which are proving
to be of immense value to U.S. breeders. A rapid, inexpensive screening
method was developed which allows oat lines to be efficiently screened
for beta-glucan (the cholesterol lowering soluble fiber component). ARS
scientists identified 160 accessions with specific stem rust resistance
genes. An 18 chromosome barley was developed, which may exhibit
agronomic advantages over existing 14 chromosome barley. In situ
hybridization techniques were utilized to physically map molecular
markers to chromosomes. With this information, differences were
established between recombinational maps and true physical locations of
RFLP's (Restriction Fragment Length Polymorphisms)(of wheat and rye),
which indicated the presence of ``hot'' and ``cold'' spots of
recombination along chromosome arms. This information is extremely
valuable for scientists working on plant transformation.
Molecular biology offers powerful approaches to plant improvement
and ARS cereal scientists are at the forefront. Among their
accomplishments are: 1) developing DNA probes for rice cultivar and
germplasm identification, 2) developing an oat tissue culture system
suitable for in vitro gene transfer, 3) producing a seed cDNA library
which can be used to detect antifungal protein genes, 4) demonstrated,
through the similarity of gene arrangement among grass species, that
the convergent domestication of maize, sorghum and rice appears to be
due to mutations of major gene loci; thus, showing that mapping data
developed in one crop is applicable to other crops, and 5) identified
root specific and spike specific ethylene probes--allowing the study
and improvement of root health and grain production.
Finally, one of the most exciting ``targets of opportunity'' for
cereal researchers is to design crops for specific uses. It may be
informative to present such ARS accomplishment in more detail, as
follows:
Discovery and development of non-lethal maize, barley, and rice ``low
phytic acid'' (LPA) mutants.
This pioneering research has demonstrated that the fraction of
grain total phosphate that is ``nutritionally available'' in non-
ruminant diets is greatly increased in LPA grain. Methods and
technologies are under development to facilitate utilization of these
mutants in crop breeding and agricultural production.
Isolation of LPA mutants confirms ``Mendelian'' inheritance of seed
phosphorus and mineral storage processes; provides the first genetic
resources for study of seed phosphorus and mineral storage processes,
including phosphorus homeostasis during seed development and
germination; provides the first genetic evidence that phytic acid is
not an essential component of seeds and provides first genetic
identification of genes important to phytic acid synthesis; and
provides the first genetic resources necessary to study the role of
phytic acid in human and animal nutrition and health.
This research has been conducted over the past decade and is now
coming to fruition through technology transfer to private industry and
facilitation of new levels of nutritional research.
Poultry, swine, and fish production using LPA grain will be less
expensive, more efficient, and have a reduced impact on the
environment. In addition to improvement in the efficiency of
agricultural production, competitiveness of domestic producers in the
international marketplace will be enhanced. This work may also lead to
improved human nutrition and health in those countries or populations
for whom cereal crops are staple foods.
Companies representing well in excess of 50 percent of the domestic
hybrid corn seed production are obtaining licenses to use the LPA
mutants and related technology to develop ``low phytic acid'' corn.
Question. What is your current funding and staffing by location?
Does the fiscal year 1998 budget propose decreases for small grains
research? Explain.
Answer. The overall fiscal year 1998 budget proposes an increase in
research funding for small grains of $685,000. The current funding and
staffing by location follows:
WHEAT RESEARCH
------------------------------------------------------------------------
Fiscal year 1997--
Location ----------------------------
Funds Scientists
------------------------------------------------------------------------
Albany, CA (PGEC).......................... $307,700 0.3
Albany, CA (WRRC).......................... 4,086,400 14.4
Riverside, CA.............................. 143,000 .6
Ft. Collins, CO............................ 284,400 .5
Newark, DE................................. 142,700 .5
Gainesville, FL............................ 718,400 2.3
Athens, GA................................. 1,288,600 4.8
Aberdeen, ID............................... 569,000 1.2
Peoria, IL................................. 3,099,100 10.6
Urbana, IL................................. 59,300 0.2
W. Lafayette, IN........................... 1,166,500 4.7
Manhattan, KS.............................. 4,417,900 17.0
Beltsville, MD............................. 1,265,200 3.9
Frederick, MD.............................. 377,200 .8
Morris, MN................................. 140,600 .5
St. Paul, MN............................... 990,500 4.7
Columbia, MO............................... 256,100 1.1
Stoneville, MS............................. 65,500 0.2
Sidney, MT................................. 189,800 0.7
Raleigh, NC................................ 166,300 .9
Fargo, ND.................................. 1,367,000 5.7
Mandan, ND................................. 353,200 1.1
Lincoln, NE................................ 932,600 4.2
Geneva, NY................................. 54,000 ...........
Ithaca, NY................................. 636,600 2.4
Wooster, OH................................ 625,000 2.2
El Reno, OK................................ 412,300 0.5
Stillwater, OK............................. 1,103,700 3.9
Corvallis, OR.............................. 214,800 1.0
Pendleton, OR.............................. 561,000 2.5
Brookings, SD.............................. 169,000 .7
College Station, TX........................ 86,500 .4
Lubbock, TX................................ 127,700 .4
Temale, TX................................. 62,800 .3
Logan, UT.................................. 29,600 .2
Pullman, WA................................ 2,335,300 7.2
Montpellier, FR............................ 135,800 .5
Headquarters............................... 488,800 ...........
----------------------------
Total................................ 29,429,900 103.1
------------------------------------------------------------------------
OAT RESEARCH
------------------------------------------------------------------------
Fiscal year 1997--
Location ----------------------------
Funds Scientists
------------------------------------------------------------------------
Albany, CA................................. $237,200 0.6
Newark, DE................................. 33,200 .1
Aberdeen, ID............................... 668,000 2.0
Urbana, IL................................. 148,300 .5
W. Lafayette, IN........................... 27,600 .1
Ames, IA................................... 146,400 .8
Beltsville, MD............................. 42,200 .1
St. Paul, MN............................... 563,300 1.9
Ithaca, NY................................. 117,700 .5
Raleigh, NC................................ 223,600 1.0
Fargo, ND.................................. 205,200 1.1
Madison, WI................................ 309,100 1.3
Montpellier, FR............................ 90,500 .3
----------------------------
Total................................ 2,812,300 10.3
------------------------------------------------------------------------
BARLEY RESEARCH
------------------------------------------------------------------------
Fiscal year 1997--
Location ----------------------------
Funds Scientists
------------------------------------------------------------------------
Albany, CA................................. $532,500 1.4
Newark, DE................................. 33,200 0.1
Athens, GA................................. 42,300 .2
Aberdeen, ID............................... 621,700 2.0
Urbana, IL................................. 89,000 .3
W. Lafayette, IN........................... 82,700 .3
Beltsville, MD............................. 42,200 .1
St. Paul, MN............................... 50,900 .2
Sidney, MT................................. 106,200 .4
Ithaca, NY................................. 65,800 .2
Raleigh, NC................................ 21,800 .1
Fargo, ND.................................. 447,700 2.2
Stillwater, OK............................. 436,000 1.6
Pullman, WA................................ 96,700 .5
Madison, WI................................ 790,000 2.9
Montpellier, FR............................ 90,500 .3
----------------------------
Total................................ 3,549,200 12.8
------------------------------------------------------------------------
RICE RESEARCH
------------------------------------------------------------------------
Fiscal year 1997--
Location ----------------------------
Funds Scientists
------------------------------------------------------------------------
Stuttgart, AR.............................. $911,000 4.0
Albany, CA................................. 441,200 1.3
Davis, CA.................................. 166,800 1.0
Riverside, CA.............................. 22,200 ...........
Gainesville, FL............................ 382,700 1.4
Athens, GA................................. 340,100 1.2
Aberdeen, ID............................... 194,900 0.5
Manhattan, KS.............................. 290,200 1.2
New Orleans, LA............................ 1,373,700 5.4
Beltsville, MD............................. 408,300 1.3
Frederick, MD.............................. 145,600 .5
St. Paul, MN............................... 128,700 .4
Geneva, NY................................. 54,000 ...........
Ithaca, NY................................. 50,500 .2
Mayaguez, PR............................... 25,400 ...........
Beaumont, TX............................... 969,500 3.3
College Station, TX........................ 86,500 .3
Houston, TX................................ 182,500 .2
Madison, WI................................ 42,500 .2
----------------------------
Total................................ 6,216,300 22.4
------------------------------------------------------------------------
new uses research
Question. ARS carries out a major effort in research to find new
uses and process for agricultural commodities. Please identify by
location, the research and funding for fiscal year 1997 and 1998 in
this area.
Answer. The focus of the ARS new uses research program is to
enhance U.S. economies through the development of value-added food and
industrial (nonfood and biofuels) products for domestic and export
markets. The fiscal year 1997 and 1998 funding for the ARS value-added
food, nonfood, and biofuels research by location follows:
NEW USES RESEARCH FUNDING FISCAL YEAR 1997
----------------------------------------------------------------------------------------------------------------
Location Nonfood Food Biofuels Total
----------------------------------------------------------------------------------------------------------------
Phoenix, AZ..................................... $771,100 .............. .............. $771,100
Albany, CA...................................... 3,282,900 $4,942,200 $316,700 8,541,800
Fresno, CA...................................... 69,900 311,300 .............. 381,200
Orlando, FL..................................... .............. 144,800 .............. 144,800
Winter Haven, FL................................ 213,300 1,182,300 .............. 1,395,600
Athens, GA...................................... 488,800 3,275,900 .............. 3,764,700
Dawson, GA...................................... .............. 753,800 .............. 753,800
Hilo, HI........................................ 315,100 .............. .............. 315,100
Ames, IA........................................ 128,000 .............. .............. 128,000
Peoria, IL...................................... 13,648,200 2,940,500 2,872,700 19,461,400
Manhattan, KS................................... .............. 2,500,900 .............. 2,500,900
New Orleans, LA................................. 9,668,200 3,586,700 .............. 13,254,900
Beltsville, MD.................................. .............. 2,434,800 .............. 2,434,800
East Lansing, MI................................ .............. 150,400 .............. 150,400
Oxford, MS...................................... 882,800 245,600 .............. 1,128,400
Poplarville, MS................................. .............. 25,600 .............. 25,600
Stoneville, MS.................................. 1,689,200 .............. .............. 1,689,200
Sidney, MT...................................... 111,500 .............. .............. 111,500
Clay Center, NE................................. .............. 286,700 .............. 286,700
Lincoln, NE..................................... .............. 88,200 .............. 88,200
Las Cruces, NM.................................. 1,068,900 .............. .............. 1,068,900
Raleigh, NC..................................... .............. 1,280,400 .............. 1,280,400
Fargo, ND....................................... .............. 1,754,900 .............. 1,754,900
Wooster, OH..................................... .............. 571,700 .............. 571,700
Lane, OK........................................ 150,800 881,200 .............. 1,032,000
Wyndmoor, PA.................................... 5,326,000 6,801,700 2,039,200 14,166,900
Clemson, SC..................................... 1,089,700 .............. .............. 1,089,700
Beaumont, TX.................................... .............. 148,300 .............. 148,300
College Station, TX............................. 37,700 .............. .............. 37,700
Lubbock, TX..................................... 536,400 .............. .............. 536,400
Weslaco, TX..................................... 343,900 531,200 .............. 875,100
Pullman, WA..................................... 93,500 759,900 .............. 853,400
Wenatchee, WA................................... .............. 808,900 .............. 808,900
Madison, WI..................................... 154,100 545,200 .............. 699,300
NAL............................................. 9,000 .............. .............. 9,000
Headquarters.................................... 106,900 .............. .............. 106,900
---------------------------------------------------------------
40,185,900 36,953,100 5,228,600 82,367,600
----------------------------------------------------------------------------------------------------------------
NEW USES RESEARCH FUNDING FISCAL YEAR 1998 (PROPOSED)
----------------------------------------------------------------------------------------------------------------
Location Nonfood Food Biofuels Total
----------------------------------------------------------------------------------------------------------------
Phoenix, AZ..................................... $771,100 .............. .............. $771,100
Albany, CA...................................... 2,135,600 $4,243,900 $316,700 6,696,200
Fresno, CA...................................... 21,700 311,300 .............. 333,000
Orlando, FL..................................... .............. 144,800 .............. 144,800
Winter Haven, FL................................ 213,300 1,182,300 .............. 1,395,600
Athens, GA...................................... 488,800 2,910,300 .............. 3,399,100
Dawson, GA...................................... .............. 753,800 .............. 753,800
Hilo, HI........................................ 315,100 .............. .............. 315,100
Ames, IA........................................ 128,000 .............. .............. 128,000
Peoria, IL...................................... 12,706,700 2,651,500 2,872,700 18,230,900
Manhattan, KS................................... .............. 2,500,900 .............. 2,500,900
New Orleans, LA................................. 9,668,200 3,586,700 .............. 13,254,900
Beltsville, MD.................................. .............. 1,980,700 .............. 1,980,700
East Lansing, MI................................ .............. 150,400 .............. 150,400
Oxford, MS...................................... 882,800 245,600 .............. 1,128,400
Poplarville, MS................................. .............. 25,600 .............. 25,600
Stoneville, MS.................................. 1,197,700 .............. .............. 1,197,700
Sidney, MT...................................... 111,500 .............. .............. 111,500
Clay Center, NE................................. .............. 286,700 .............. 286,700
Lincoln, NE..................................... .............. 88,200 .............. 88,200
Las Cruces, NM.................................. 1,068,900 .............. .............. 1,068,900
Raleigh, NC..................................... .............. 777,400 .............. 777,400
Fargo, ND....................................... .............. 1,754,900 .............. 1,754,900
Wooster, OH..................................... .............. 571,700 .............. 571,700
Lane, OK........................................ 150,800 881,200 .............. 1,032,000
Wyndmoor, PA.................................... 4,634,500 6,801,700 2,039,200 13,475,400
Clemson, SC..................................... 1,089,700 .............. .............. 1,089,700
Beaumont, TX.................................... .............. 148,300 .............. 148,300
College Station, TX............................. 37,700 .............. .............. 37,700
Lubbock, TX..................................... 536,400 .............. .............. 536,400
Weslaco, TX..................................... .............. 531,200 .............. 531,200
Pullman, WA..................................... 93,500 692,700 .............. 786,200
Wenatchee, WA................................... .............. 808,900 .............. 808,900
Madison, WI..................................... 154,100 545,200 .............. 699,300
NAL............................................. 9,000 .............. .............. 9,000
Headquarters.................................... 106,900 .............. .............. 106,900
---------------------------------------------------------------
36,522,000 34,575,900 5,228,600 76,326,500
----------------------------------------------------------------------------------------------------------------
Question. Please explain the recent accomplishments derived from
this research.
Answer. Selected examples of accomplishments in developing value-
added products and processes in each of the categories follow:
Valuable protein products from solid tannery waste.--The land
filling of chromium-containing solid waste generated during the
manufacture of chrome-tanned leather has become a world-wide problems.
ARS scientists at the Eastern Regional Research Center (ERRC),
Wyndmoor, Pennsylvania, have developed two processes to treat this
waste as an alternative to land filling. The products isolated from
these treatments are a recyclable chromium cake and protein products of
varying characteristics and quality. To make these processes
economically viable, end uses need be found for the protein products.
At present, the ERRC researchers are examining the functional
properties of the protein--adhesiveness, foamability, oil and water
absorption, and emulsification capacity. Evidence of worldwide concern
about the problem and the remedy includes ongoing cooperative
agreements with ATO-DLO in the Netherlands for modification of the
protein; with Ramon Llull University in Barcelona, Spain, for process
improvements and for chrome recycling; and with University of Brno,
Zlin, Czech Republic, for studying the protein properties and for
development of an industrial scale treatment plant.
Animal fats, restaurant grease and vegetable-oil refining waste as
biodiesel feedstocks.--ARS researchers at the Eastern Regional Research
Center, Wyndmoor, Pennsylvania, are using nature's enzymes in new
approaches to make biodiesel. The enzymes allow conversion of three
feedstocks that are cheaper than conventional vegetable oil: animal
fats, restaurant greases, and soapstocks. The high content of free
fatty acids in these feedstocks obviates conventional conversion
technology. The enzyme process with branched alcohols as co-feedstocks
enhances the cold-temperature properties of the biodiesel. A
Cooperative Research and Development Agreement among ARS, the DoE's
National Renewable Energy Laboratory (NREL) and the Fats and Proteins
Research Foundation promotes the development and transfer of this
technology and cost engineering to optimize the economics of the new
process. Since the cost of feedstock for conventional biodiesel is 75
percent of the manufacturing cost of the fuel, the importance of using
cheaper feedstocks is significant.
Biodegradable polyesters produced by bacteria growing on fats and
oils.--ARS researchers at the Eastern Regional Research Center (ERRC),
Wyndmoor, Pennsylvania, are investigating the conversion of fats and
oils into biodegradable plastics called polyhydroxyalkanoates (PHA's).
Industry has produced PHA's from other agricultural feedstocks, but
ERRC's use of selected bacteria on fats and oils results in polymers
with unique properties--elastomers and intermediates that can be
further modified chemically for even new types of plastics. The ERRC
research is multidisciplinary, including molecular and microbiology,
organic chemistry, and materials engineering; Collaborating with the
University of Massachusetts (Lowell and Amherst).
``Amaizing Gum'': A valuable food and industrial gum made from corn
processing byproducts.--A novel process has been developed by ARS
scientists at the Eastern Regional Research Center in Wyndmoor,
Pennsylvania, to produce a valuable polysaccharide (gum) from corn
fiber, an abundant but under-utilized byproduct of the corn wet-milling
industry. About 1.5 pounds of Amaizing Gum can be produced from the
corn fiber derived from one bushel of corn, so vast quantities are
potentially available. Amaizing gum has properties which suggest
numerous uses in foods as a soluble dietary fiber, a thickener, an
emulsifier and a ``home grown'' replacement for imported Gum Arabic.
Potential industrial uses include natural adhesives and water-based
functional ingredients for coatings and paints. A U.S. patent for the
corn fiber gum process has been filed and a Cooperative Research and
Development Agreement with a major food and specialty chemical company
is being finalized to facilitate commercialization of the new
technology.
Nutritious restructured fruit snacks.--Utilization and consumption
of many fruit and vegetable crops are constrained by their short
harvest seasons and limited market outlets. ARS scientists at the
Western Regional Research Center in Albany, California, have developed
new technologies to increase utilization and consumption of fruits and
vegetables. Novel extrusion and molding technologies are used to
produce convenient, value-added restructured fruit and vegetable
products from bulk-processed ingredients. These technologies make use
of concentrated fruit and vegetable purees as starting materials.
Novel, convenient and nutritious products have been developed as a
means to supplement the fruit and vegetable component of a healthy diet
in accordance with the USDA recommended guidelines. U.S. growers and
processors would benefit from this research through increased
utilization and consumption of their crops, extended processing periods
for seasonal crops and improved production efficiencies.
Life-threatening allergies to latex products can be avoided using a
novel latex.--The latest studies suggest that more than 20 million
Americans now are affected by ``latex allergy,'' which is triggered by
many of the proteins present in latex products, and a number of deaths
from anaphylaxis have occurred. Even highly purified products, made
from commercially available Hevea (natural rubber) latex, are unsafe
for use by hypersensitive people. Scientists at the Western Regional
Research Center in Albany, California, have found a way to produce
hypoallergenic latex products from guayule, a domestic rubber-producing
plant species. The new latex has successfully passed medical trials and
processing scale-up, and a U.S. patent has been obtained. Prototype
latex products have been manufactured and tests by FDA scientists
showed that guayule latex examination gloves are impermeable to
viruses. Commercialization efforts are initially aimed at the very high
margin medical products market with over 300 natural rubber medical
devices. A license to this technology has been granted to Yulex, Inc.
of Philadelphia, Pennsylvania.
Lightweight concrete containing starch.--Lightweight, insulative
concrete is used in the building industry for non-structural
applications such as for roof tiles, floors and as insulation around
fireplaces. Traditional methods of making lightweight concrete require
either expensive air entraining equipment or a source of lightweight
aggregate that may be in limited supply and obtained at a cost to the
environment. Scientists at the Western Regional Research Center in
Albany, California, have developed a method of making lightweight
concrete using wheat starch. The wheat starch has the appearance of
sand and is hydrated before being mixed into the concrete. Concrete
with varying densities, strengths and insulative properties have been
made using the starch method. Starch is a renewable resource that is in
abundant supply and could provide a viable alternative to lightweight
aggregate for making lightweight concrete. A patent has been issued for
this technology and licensees are being sought.
Zero calorie substitute for fat.--It is well recognized that the
average American diet is too high in fat and too low in fiber. New ARS
technology should help alleviate both problems. Z-trim, invented by an
ARS scientist in Peoria, Illinois, is a high-fiber, zero calorie fat
and/or flour substitute.
The product is made from seed byproducts (bran, hulls, etc.) of
commodity grains, such as corn or oat, and is suitable for use in many
food items. For example, a lunch of Salisbury steak, mashed potatoes
with gravy, broccoli with cheese sauce, Waldorf salad, and two
brownies, all containing Z-trim, has a total of 600 calories removed
and 3.9 grams of fiber added compared to the same lunch without Z-trim.
New starch-based biodegradable plastics.--``The costs for producing
biodegradable plastics can be greatly reduced when inexpensive starch
is used as an ingredient. Until now, however, the resulting starch-
containing materials often had poor properties and were not useful for
most commercial applications.'' Scientists at the National Center for
Agricultural Utilization Research (NCAUR) in Peoria, Illinois, have
developed new biodegradable plastic materials based on starch and novel
polyesters. Under a CRADA with the Biotechnology Research and
Development Corporation (BRDC), NCAUR and BRDC scientists have devised
new materials with properties similar to commercial plastics such as
polystyrene, but with starch contents much greater than previously
achieved. The high starch content makes these materials more cost
competitive than synthetic biodegradable materials with comparable
performance characteristics. These materials offer biodegradable
alternatives to synthetic plastics currently used in disposable
applications such as cups, utensils, and food service trays. This
technology has recently been licensed by a major U.S. company with
plans to commercialize within the fiscal year.
Discovery of new enzyme for lower cost biofuels.--The research for
lower cost raw materials for the production of biofuels has led to
increasing interest in the enzymatic breakdown of cellulosic biomass to
fermentable sugars. Scientists at the National Center for Agriculture
Utilization Research, Peoria, Illinois, have discovered several unique
enzymes from yeast that are free from product and substrate inhibitions
and work best at high temperatures. These improved properties are the
desired attributes of an enzyme suitable for commercialization and
should lower the cost of producing fuel alcohol.
Seed yields in Vernonia galamensis doubled by improvement in seed
retention.--Vernonia is a potential oilseed crop for the American
farmer, with uses in paints and coatings industries. Seeds produced at
the beginning and middle of the growing season were previously lost by
harvest time. A new trait, developed by ARS scientists at Phoenix,
Arizona, keeps seeds on the plant longer, resulting in more seeds at
harvest. As yields are increased in this crop, it becomes a more
economically-viable option for commercialization. Production of new
crops results in diversification, which leads to farm stability and
sustainability for agriculture.
Facile dyeing process for blends of wool and cotton.--Wool-cotton
blends have been shunned by the textile industry because of
difficulties in dyeing to ``union'' shades, where dye uptake is uniform
from one fiber to the other. Agricultural Research Service researchers
at the Eastern Regional Research Center, Wyndmoor, Pennsylvania, have
optimized their pretreatment protocol for these blends, whereby the
cotton component is made chemically similar to wool in its ability to
take up dye. The protocol involves pretreatment with commercial agents
called dye fixatives. The ARS process should give the public an
excellent, all-natural, trans-seasonal fabric with excellent comfort
and appearance qualities, and should provide a new market for domestic
wool and cotton. A CRADA with the American Sheep Industry Association
and Cotton, Inc. seeks to demonstrate the technology and promote its
adoption by the American textile industry as a new use for both
agricultural fibers.
Computerized process control for cotton gins increases monetary
income to farmers and improves cotton quality.--Scientists at the
Cotton Ginning Research Unit at Stoneville, Mississippi, developed and
implemented a computerized and automated system to automatically
measure the quality of cotton at various stages of gin processing and
automatically select and route the cotton through the optimum machine
sequence. One commercial gin has been fully automated and two others
are partially automated. Application of the Computerized Process
Control Systems (CPCS) will improve fiber quality substantially and
increase farmer profits $10 to $20 per bale with a potential impact of
$400 million annually. The CPCS includes new automated bypass valves
(patent applied for), automated calibration devices (patent applied
for), automated sample collection and analyses hardware (three patents
awarded), and associated software. Key components of the CPCS have been
licensed to an international company for marketing in 1998.
New process for preserving fresh-cut pears shows promise.--Fresh
sliced pears are subject to rapid browning, tissue breakdown, and
microbial spoilage which have, heretofore, prevented the development of
a fresh-cut product. By optimization of fruit ripeness for fresh-cut
applications, use of novel browning inhibitor formulations, and special
packaging in a modified atmosphere, scientists at the Eastern Regional
Research Center, Wyndmoor, Pennsylvania, have overcome these problems
with two key pear varieties, d'Anjou and Bartlett, attaining a shelf-
life of 2-3 weeks at 4 deg.C. Work is in progress to establish the
feasibility of the new process for commercial use.
Extending the shelf life of fresh and low temperature pasteurized
citrus juices.--The marketing of fresh citrus juices is severely
restricted due to the presence of an enzyme that clarifies the juice.
Consumers perceive this as a serious quality defect. The same enzyme
may also cause gelation of frozen concentrated citrus juice and
flocculation in drinks containing citrus juice. Scientists at the U.S.
Citrus and Subtropical Products Research Laboratory, Winter Haven,
Florida, have discovered that a form of the enzyme present in citrus
fruit peel causes the most rapid juice cloud destabilization. A
Cooperative Research and Development Agreement has been established
with a major producer of machinery used to extract juice from citrus
fruit. This collaboration between ARS scientists and private industry
is designed to determine if methods of juice extraction can be
developed to decrease the amount of the detrimental peel enzyme in
juice, extending the shelf life, and increasing the geographic market
area for fresh citrus juices.
Corn Fiber Oil as a Natural Cholesterol-Lowering Product.--ARS
Scientists at the Eastern Regional Research Center, Wyndmoor,
Pennsylvania, and the National Center for Agriculture Utilization
Research, Peoria, Illinois, have developed a process to extract a new
natural oil from corn. Unlike conventional corn oil, which is extracted
from corn ``germ,'' corn fiber oil is extracted from corn ``fiber,''
which is a low-valued by-product of the industrial processes that
convert corn into sweeteners, starch, and other products such as fuel-
grade ethanol. Collaborative studies with scientists at the University
of Massachusetts, Lowell, have confirmed that corn fiber oil
significantly lowers total serum cholesterol and LDL cholesterol
(``bad'' cholesterol) in hamsters. The active cholesterol-lowering
component may be an unusual compound called ``sitostanol-ferulate''
which comprises about 6 percent of the oil. The natural sitostanol-
ferulate in corn fiber oil may lower serum cholesterol in the same way
as a popular new synthetic Finnish Margarine-type product called
``Benecol,'' which sells for five to ten times the price of regular
margarine. ARS has applied for a U.S. patent on this new technology and
licensing negotiations with major U.S. food companies are now being
conducted.
Commercialization of this new technology will result in new uses
for agricultural byproducts, more revenue for processors and growers,
and new healthful food products for consumers.
New Fat Replacer.--ARS scientists at the Southern Regional Research
Center in New Orleans, Louisiana, have developed a process for making a
new low-calorie fat replacer from rice flour. This white-colored, all
natural rice-based product looks and feels like hydrogenated fat. It
can be used in non-frozen, fat-free or dairy-free products like yogurt,
cream cheese, sour cream, and whipped cream. A patent on this discovery
is currently being sought and a Cooperative Research and Development
Agreement is being negotiated with a U.S. company in order to
commercialize the new technology.
Anticancer compounds derived from citrus-processing byproducts.--A
collection of nearly 200 compounds derived from citrus peel and various
citrus peel byproducts were submitted to the National Cancer Institute
for testing for anti-HIV and anticancer characteristics. A number of
these compounds have been shown in a second study to have strong
anticancer characteristics against several types of cancer cell lines,
especially, breast cancer cell lines. ARS scientists at the U.S. Citrus
and Subtropical Products Laboratory in Winter Haven, Florida have
isolated a number of additional compounds with structural similarities
to these active compounds, and these additional compounds have also
been submitted to a second study. Although the National Cancer
Institute has completed the screening on only a small percentage of the
submitted compounds, one compound, a synthetic analogue of a naturally-
occurring citrus flavonoid, has been shown to have significant
characteristics against a number of cancer cell lines, and has been
selected for animal trials. Based on the similarities between this
compound and others submitted, but not yet tested, more compounds are
expected to be selected for further study by the National Cancer
Institute. These findings are contributing to our knowledge of the link
between improved human health and nutrition and will also lead to
important new uses for citrus byproducts.
Question. How many cooperative partnerships with industry have
resulted from research in this area?
Answer. Since 1995, of the 56 licenses that have been issued on ARS
technologies, 21 relate directly to ``value-added'' products derived
from agricultural commodities. This classification excludes genetic
engineering technologies, pest control alternatives, diagnostic tests,
etc. Of the CRADA's issued since 1992, 37 deal specifically with non-
food value-added products and another 15 deal with new food products.
Another 180 CRADA partnerships deal with technologies that will enhance
production, quality, and profitably of crop and animal commodities,
thus increasing the quantity of economical agricultural-based raw
materials for the creation of new value-added products and additional
market opportunities. These partnerships have also led to the
successful development of new products that have contributed to the
change in U.S. exports from bulk commodities to value added products.
Question. What are the prospects for further accomplishments?
Answer. The prospects for further accomplishments are excellent.
ARS has adopted a market-rational approach to the development of value-
added products in which market requirements for cost, performance, and
functional properties must be clearly understood and the product
developed must be equal to or better than the product it is displacing.
Preference is given to development of new products that displace
imported rather than domestically produced ones in order to further
enhance the U.S. balance of trade. ARS has developed a unique cost
engineering and analysis program at the Eastern Regional Research
Center, Wyndmoor, Pennsylvania, to assist ARS researchers in their
product/process development goals. ARS is further committed to the
concept that early involvement of industry is key to rapid development
of value-added products, to successful development of new business
opportunities, and to the creation of new jobs.
Question. Over the past ten years, how much money has ARS
redirected into new uses research?
Answer. Since fiscal year 1988, ARS has redirected approximately
$21 million into new uses research. In addition to the redirections,
ARS received an increase of $4.3 million for new uses research in
fiscal year 1994.
nursery crops research
Question. Where does ARS conduct its nursery crops research? Please
describe the program and funding for each location.
Answer. Nursery crops research is funded at 12 locations. A summary
of project activities and funding for each location follows:
Location 1997 Funding
Washington, DC................................................$5,273,900
Miami, FL..................................................... 56,200
Montpellier, FR............................................... 89,400
Tifton, GA.................................................... 76,500
Peoria, IL.................................................... 92,400
Ames, IA...................................................... 128,000
Beltsville, MD................................................ 462,200
Wooster, OH................................................... 402,700
Corvallis, OR................................................. 654,300
Logan, UT..................................................... 20,700
Yakima, WA.................................................... 14,900
Headquarters.................................................. 210,100
--------------------------------------------------------------
____________________________________________________
Total................................................... 7,481,300
Washington, DC.--(1) Evaluate new floral crops and determine the
effects of cultural practices on growth and flowering; (2) develop new
methods to improve floral and nursery crops with enhanced flower color
and disease resistance utilizing biotechnology; (3) select, evaluate,
and develop cultivars of new trees and shrubs with improved growth
habits and stress tolerance; (4) develop biologically-based
alternatives to methyl bromide; (5) develop new approaches for disease
control utilizing techniques of molecular biology in characterizing
plant viruses; (6) identify biologically active natural products for
insect control; (7) conduct efficacy and phytotoxicity tests to develop
data in support of expansion of labels for minor use pesticides; (8)
collect, identify and establish woody and herbaceous plants for public
display; and (9) establish, develop, operate, and maintain an
educational center for gardens and collections.
Miami, FL.--Introduce, preserve, distribute and evaluate tropical
and subtropical fruit and ornamental plants.
Montpellier, France.--Discover, collect, and determine the
potential for biocontrol agents in controlling sweetpotato whitefly and
export those with promise to the quarantine facility in the U.S. for
distribution to the research community.
Tifton, GA.--Evaluate the effectiveness and phytotoxicity of
nematicides, fungicides, herbicides, insecticides, and acaricides for
control of nematodes, diseases, weeds, insects and mites in minor use
pesticide evaluation on ornamental and food crops.
Peoria, IL.--Develop low-cost culture techniques for producing
fungal and bacterial biocontrol agents and enhance viability of the
microorganisms in storage.
Ames, IA.--Obtain performance data and/or residue samples in
support of minor-use pesticides registration for pesticide use on
ornamental specialty and food crops.
Beltsville, MD.--(1) Integrate practices to improve soil/crop
health by analyzing interactions of biological and physical properties
of organic amendments, and combine the use of biocontrol agents and
organic amendments to increase crop tolerance to water, nutrient and
pathogen stress; (2) identify microorganisms with potential for control
of soilborne pathogens and transfer technology to industry; (3) conduct
research on biocontrol of gypsy moth and turf insects; (4) develop and
evaluate new methods for detection of phytoplasms; (5) develop and
coordinate uniform evaluation trials of turfgrass varieties.
Wooster, OH.--Reduce damage and crop losses caused by selected
insect pests of horticultural, turf and ornamental crops by developing
alternative management strategies for pest control.
Corvallis, OR.--(1) Investigate factors affecting seed quality and
optimum production of forage and turf grass; (2) determine the effects
of biocides on mycorrhizal fungi and produce new strains of these fungi
resistant to biocides for possible use as an alternative to methyl
bromide soil fumigation; (3) characterize changes in gene expression
and levels of growth hormone in relation to flower induction; (4)
investigate the distribution of products of photosyntheses in selected
horticultural plants with and without mycorrhizal fungi associated with
the roots; (5) develop technology to identify beneficial organisms to
apply to roots to reduce stress and reduce disease severity; and (6)
evaluate various fungicides, insecticides and herbicides for efficacy
and phytotoxicity in support of floral and nursery crops label
expansion through the IR-4 minor-use pesticide regional project.
Logan, UT.--Evaluate and define existing turfgrass germplasms and
characterize the genetic diversity to enhance germplasms with desirable
traits for use by plant breeders.
Yakima, WA.--Provide efficacy, phytotoxicity and yield data and
residue samples for analyses to support registration or reregistration
of minor use pesticides for control of insect pests.
Headquarters.--Support minor use pesticide registration.
Question. What major accomplishments have come from your research
in this area?
Answer.
Washington, DC.--Introduced more than 100 new trees and shrubs
during the past 70 years since the National Arboretum was established.
The Arboretum has developed a wide range of plants with superior
landscape qualities that are more disease and cold resistant and
tolerant to urban stresses. For example, the Bradford pear introduced
from the Arboretum is among the 10 most widely planted ornamental trees
in the U.S. Other introductions include improved horticultural forms of
crape myrtle, firethorn, viburnum, elm, magnolia, and holly. In
addition, new flower introductions include lisianthus, kangaroo paw,
ornithogalum and clematis for pot plant production. Many of these
introductions are now produced and utilized nationwide and some
introductions have been distributed abroad.
Miami, FL.--Collections of avacado, mango, carambola, passionfruit
and other tropical and subtropical fruits are maintained for use in ARS
research programs in plant improvement through breeding and improvement
of post-harvest quality for domestic use as well as export.
Peoria, IL.--Molecular techniques have been applied in developing
improved methods of classification of fungi and bacteria that will
enhance the utilization of these organisms as biocontrol agents.
Montpellier, France.--Approximately 25 natural enemies of the
sweetpotato whitefly have been brought to the U.S. and five have been
released in Texas, California and Florida for control of the insect.
Tifton, GA and Ames, IA.--Support of minor-use pesticide
registrations is a critical need of industry and is an integral part of
pest and disease control procedures utilized by growers and processors
to reduce crop loss and maintain high quality products.
poultry disease (pems) research
Question. An increase of $100,000 above the fiscal year 1996 level
was provided for fiscal year 1997 for ARS poultry enteritis and
mortality syndrome research. Where is this research being carried out
and what have been the results of your research on this disease to
date?
Answer. The fiscal year 1997 increase was allocated to the ARS
Southeast Poultry Research Laboratory at Athens, Georgia where poultry
enteritis and mortality syndrome research is carried out. Collaboration
with the College of Veterinary Medicine at North Carolina State
University has been established. Experiments to determine what agents
are present in the infected samples, but absent from controls, are in
progress.
air quality (pm-10) research
Question. Where does ARS perform Air Quality (PM-10) research.
Please describe the program, funding, and staffing by location.
Answer. At Pullman, Washington, 1.3 scientist years (SY's) and
$480,500 are allocated to PM-10 and PM-2.5 research. One component of
the research is directed to understanding the physics of particulate
emissions from agricultural fields during field operations and wind
storms. Another component is determining where particulates caught in
samplers have originated. The third component is directed to developing
methods for reducing particulate emissions.
At Manhattan, Kansas, 1.0 SY and $167,700 are allocated to research
on PM-10 and PM-2.5 particulate physics and on developing a PM-10 and
PM-2.5 module for inclusion in a wind erosion model (Wind Erosion
Prediction System--WEPS). The latter will be used to select, from among
alternative land treatments, the most appropriate treatments for
controlling wind erosion and particulate emissions.
At Lubbock, TX, 1.7 SY and $319,500 are allocated to field
measurement and documentation of particulate fractions during wind
erosion events.
Question. What major accomplishments have come from your research
in this area?
Answer. a) Considerable progress has been made in identifying the
physics of PM-10 emissions during weathering, tillage, traffic, and
abrasion by wind-blown soil clods. b) Progress has also been made in
establishing typical emission rates under field conditions for various
tillage practices. c) The PM-10 module for inclusion in the wind
erosion model has been coded, but still needs validation; and d) A
scientist in Pullman, WA, has developed a biologically-based method for
assaying the sources of particulates (i.e. where do particles come
from--agricultural fields, roads, parking lots).
Question. Is the ARS research effort in this area connected at all
to the San Joaquin Valley PM-10 study funded through the CSREES or is
that separate and apart from the ARS program?
Answer. The ARS program and the CSREES-administered PM-10 program
in the San Joaquin Valley of California are funded separately. However,
there is informal coordination, communication, and cooperation between
the programs. California personnel participate in the review and
planning meetings of the Washington study (which is joint study between
ARS, CSREES-administered Washington State University projects, EPA and
State of Washington agencies), and ARS and other cooperators in the
State of Washington participate in similar California meetings.
new crops research
Question. Provide the Committee with a list of new crops ARS is
researching.
Answer. ARS currently conducts research on guayule, vernonia,
lesquerella, cuphea, meadowfoam, crambe, jojoba, kenaf, and Hevea.
Question. What progress has been made in your research?
Answer. Guayule--Parthenium argentatum is a desert shrub that has
been grown in Arizona, California, and Texas. Guayule produces natural
rubber that has potential markets in non-allergenic products such as
latex gloves and condoms, and as a resin for paints and coatings. We
anticipate commercial production of hypoallergenic medical products
from guayule within the next three to five years building on an ARS
patent for latex extraction based on work at Albany, CA. The patent has
been licensed by Yulex, Inc. ARS has proved that guayule latex can be
manufactured into high-quality latex products and that guayule latex
films provide an effective barrier to virus transmission. Through work
at Phoenix, AZ, ARS has released six guayule lines selected for
improved rubber concentration and yield, and that regenerate following
harvest.
Vernonia--Vernonia galamensis is native to Africa. Vernonia oil
(epoxy oil) has the potential to replace solvents in paints and become
part of the finished coating, which reduces air pollution from
solvents. The domestication and commercialization of vernonia depends
on development of high yielding cultivars and development of reliable
agronomic practices. We have developed vernonia plants that grow and
flower during the summer in the United States. Further, the harvestable
yield of vernonia has been nearly doubled by developing lines with
modified bracts in the seed head so that seeds remain on the plant
longer.
Lesquerella--Lesquerella fendleri is a winter annual that can be
grown in the southern United States for its oil, gum, and meal. There
is a large potential market for these products, so we expect that
several thousand acres could be supported. Barriers to
commercialization are the current incomplete development of high oil
content, self-pollinating seed, reliable cultural practices, and seed
harvesting and cleaning equipment. Basic research is being conducted
with the oil to make new molecules with potential as biodegradable
detergents, lubricants, and personal care ingredients. We have released
three lesquerella lines with increased oil concentration and improved
oil composition and developed another line with yellow seeds instead of
the normal brown seeds, which reduces oil pigmentation contamination.
Cuphea--Cuphea viscosissima is native to the temperate regions of
the United States and contains medium chain oils. Cuphea oil has the
potential to replace oils that are now imported such as coconut and
palm oils from tropical regions, (about one billion pounds per year)
for use in detergents and other industrial products. We are
investigating oil modifications that can lead to new products for niche
markets.
Meadowfoam--Limnanthes alba is commercially grown in Oregon with
8,100 acres planted for 1997 harvest, double that of a year ago. The
economic impact is estimated to the $5 million. Meadowfoam oil, has
been chemically modified to develop potentially new products for the
personal care, lubricants, and detergent industries, while the seed
meal may have application as a natural preemerge herbicide and
nematocide.
Crambe--Crambe Abyssinia is grown commercially in North Dakota,
with 45,000 acres planted for 1997 harvest. The economic value is
estimated to be over $9 million. We are conducting research to find new
products from the oil.
Jojoba--Simmondsia chinensis is a perennial shrub that is
commercially grown in the desert Southwest for its unique oil. The oil
has markets in lubricants and personal care items. More than 2 million
pounds of seed were harvested in 1996 with an oil value of $7.5
million. We have research underway to develop new products from jojoba.
Kenaf--Hibiscus cannibinus is an annual fiber crop grown in the
southern United States on 3,000-4,000 acres for a number of specialty
fiber applications. Fiber separation facilities are in Texas,
Mississippi, and Louisiana. Kenaf may have potential as a forage crop
as well as a fiber crop. We have conducted research to develop improved
varieties and cultural practices and to find new products.
Hevea--Hevea braziliensis is the natural rubber tree, which is the
source of the United State's imported natural rubber. We have conducted
research to compare the biochemical pathway and enzymes responsible for
production of rubber in guayule with those in Hevea to better
understand how to further modify the rubber produced in guayule.
Question. What benefits have been derived by the marketplace from
this research?
Answer. The most striking potential benefit can be shown for rubber
production from guayule. The United States retail market for latex
gloves was $3.1 billion in 1993. All natural rubber currently in
commercial use is obtained from the Brazilian rubber tree (Hevea), a
species restricted to the tropics for commercial production.
Consequently, the United States is wholly dependent on nondomestic
sources for this vital raw material. Furthermore, the recent widespread
occurrence of life-threatening ``latex allergy'' to Hevea rubber makes
development of an alternative, safe source of natural rubber
imperative.
Guayule commercialization has enormous potential. Allergic
reactions to Hevea rubber have become severe. The first United States'
cases appeared in 1988, growing to at least 500,000 by 1992. Estimates
suggest that more than 20 million Americans were affected by 1994. This
life-threatening allergy has created a major new, high-value market for
hypoallergenic natural rubber products throughout the world. A
hypersensitive individual must take care to avoid contact with current
natural rubber products, which number 40,000, including more than 300
medical devices. Severe reactions have occasionally caused death. The
occurrence of ``rubber allergy'' is not only widespread but may be
spreading rapidly, which apparently is due to increased use of latex
gloves and condoms in response to the AIDS epidemic. Proteins present
in the latex cause the allergy from Hevea and technologies have not yet
been developed to remove the harmful protein. Latex from guayule does
not contain these proteins and does not produce these allergic
reactions.
Our research has shown that guayule can be grown profitably for
hypoallergenic latex production without a government subsidy. Thus,
guayule production would enhance rural development in the southwestern
United States. Rural development could be enhanced beyond the benefits
to farmers through the concurrent development of local processing
facilities and manufacturing plants.
Development of new uses and improved varieties from the other new
crops could further diversify American agriculture and aid in rural
development. A cooperating company has licensed an ARS patent to make
``estolids,'' a new biodegradable material and is now starting to
manufacture new personal care products from meadowfoam based on this
technology. Finally, at Peoria, IL, ARS has analyzed 15,000 seeds of
new crops for useful oil and protein concentrations and placed this
information on the Internet. This information is guiding the
development of new crops worldwide.
Question. Please provide the Committee with actual obligations
incurred for each line of research last year. What is the current and
budgeted funding level for each?
Answer. The obligations incurred and the current and budgeted
funding levels for each of these new crops are as follows:
----------------------------------------------------------------------------------------------------------------
Fiscal year--
Crops -----------------------------------------------
1996 1997 1998
----------------------------------------------------------------------------------------------------------------
Guayule......................................................... $621,617 $567,700 $519,600
Vernonia........................................................ 160,517 154,200 154,200
Lesquerella..................................................... 589,801 584,900 584,900
Cuphea.......................................................... 294,689 280,400 280,400
Meadowfoam...................................................... 101,908 101,600 101,600
Crambe.......................................................... 77,922 77,800 77,800
Jojoba.......................................................... 152,862 152,300 152,300
Kenaf........................................................... 1,328,338 1,391,700 400,500
Hevea........................................................... 278,842 .............. ..............
----------------------------------------------------------------------------------------------------------------
kenaf
Question. What is your justification for terminating the Kenaf
program at Weslaco, Texas and Mississippi State?
Answer. Kenaf has long been proposed as a source of fiber for
production of newsprint. Nonetheless, it has not gained a foothold in
the paper making industry or newsprint market. At current low newsprint
prices kenaf is unlikely to be produced at an economical cost. Major
newsprint producers are committed to wood feedstock, and recycling is
increasing in importance, so the future of kenaf for this market is
speculative.
The project at Mississippi State, funded through an extramural
agreement with ARS, focuses largely on how to produce and harvest kenaf
for fiber production. With the speculative market ARS can not justify
investment in production research for kenaf fiber. In Weslaco, TX, ARS
fulfilled its mission by developing nematode-resistant varieties.
Entrepreneurs there are satisfied with the varieties, and are now
concentrating on establishing a vertically-integrated industry to
reduce costs and improve efficiency.
Question. Where else does ARS perform research on Kenaf?
Answer. In addition to Weslaco and Mississippi State, kenaf
research is performed at College Station, TX; Lane, OK; New Orleans,
LA; and Athens, GA.
Question. Provide funding and staff years for fiscal years 1996-
1998.
Answer. Funding and staff years for kenaf research are as follows:
fiscal year 1996, $1,651,400, 3.1 SY; fiscal year 1997, $1,391,700, 3.1
SY; and, proposed for fiscal year 1998, $400,500, 1.8 SY.
fundamental research
Question. How much money does ARS commit for basic research?
Answer. ARS commits $363,985,000 for basic research, which is
approximately one half of the agency's appropriated research funds.
Question. How much of this research is classified as biotechnology
research?
Answer. ARS is devoting $77,439,200 in fiscal year 1997 on
biotechnology research as a component of its basic research effort.
This amounts to 10.8 percent of the total ARS appropriation.
Question. Please identify current funding for plant genome and
animal genome research.
Answer. The current funding is $3,708,700 for plant genome research
and $7,196,500 for animal genome research.
Question. What portion of ARS' major research activities of Plant
Sciences, Animal Sciences, etc., is basic, applied and developmental?
Has this changed over the past 10 years?
Answer. The portion of ARS' major research activities of Plant
Sciences, Animal Sciences, etc., that are devoted to basic, applied or
developmental research follows:
----------------------------------------------------------------------------------------------------------------
Research activity Basic Applied Developmental
----------------------------------------------------------------------------------------------------------------
Soil, Water and Air Science..................................... $43,092,000 $32,543,000 $7,707,000
Plant Sciences.................................................. 123,713,000 93,427,000 22,127,000
Animal Sciences................................................. 58,504,000 44,182,000 10,465,000
Commodity Conversion and Delivery............................... 72,638,000 54,856,000 12,992,000
Human Nutrition Research........................................ 32,276,000 24,375,000 5,772,000
Integration of Ag Systems....................................... 15,343,000 11,587,000 2,745,000
Ag Information and Library Services............................. 18,419,000 .............. ..............
-----------------------------------------------
Total..................................................... 363,985,000 260,970,000 61,808,000
----------------------------------------------------------------------------------------------------------------
The research activities and the distribution by basic, applied and
developmental have not varied over the past 10 years.
plant gene expression center
Question. What programs are being carried out at the Plant Gene
Expression Center? Reflect funding and staff years for fiscal years
1996-98.
Answer. The total funding and scientists for the PGEC in fiscal
year 1996 was $3,145,700 and 5 SY's, fiscal year 1997 $3,091,300 and 5
SY's, with $3,091,300 and 5 SY's proposed for fiscal year 1998.
The Plant Gene Expression Center (PGEC) conducts both long-term and
short-term research. The long-term fundamental research fills gaps in
our scientific knowledge of plant genetics, genetic mechanisms, and
genetic modification. The short-term research is focused on solving
specific problems by application of basic genetic knowledge to plants.
Short descriptions of specific PGEC projects and their accomplishments
are provided for the record.
Regulatory genes that alter growth patterns.--Scientists at PGEC
are identifying and analyzing regulatory genes that alter the growth
patterns in corn. Because the arrangement of genes on the chromosomes
in various grass species is so similar, this research on corn might be
applicable to other cereals. A gene has been isolated that regulates
the number of tillers in a corn plant, a trait that might be useful for
rice or forage grass breeding. Through a CRADA with Pioneer Hi-Bred
International, a gene that controls the number of individual flowers in
a corn inflorescence was characterized. Manipulation of the preceding
gene in cereals has the potential to increase yield.
Mutants in pollen-specific receptor-like kinase genes from corn.--
Researchers at PGEC are studying how the pollen grain interacts with
female tissue during pollination and fertilization; receptor-like
kinases are thought to be involved with this interaction and other
interactions, such as plants with pathogens. Working with scientists at
Pioneer Hi-Bred through a CRADA, PGEC scientists have isolated and
characterized pollen-specific kinase genes from tomato and from corn.
If these kinases play critical roles in determining pollen-female
interactions, plant breeders may try to manipulate them as a new means
of controlling pollination and fertilization.
The NSF-DOE-USDA Arabidopsis Genome Project.--The PGEC initiated a
large-scale genome sequencing effort for the model plant Arabidopsis in
conjunction with Stanford University and the University of
Pennsylvania. The Genome Sequence Lab of the PGEC has produced 1,000
kilobases of gene sequence data since its recent inception. This
project constitutes an international effort for identifying for the
first time the genes that are responsible for the entirety of plant
form and function.
Improving gene transfer in cereal crops.--The gene transfer process
produces unpredictable DNA integration and expression patterns in
plants. PGEC scientists are applying novel site-specific recombination
technology to wheat transformation to allow for precise DNA
integration.
Degrading the compound gossypol.--Scientists at the PGEC have
isolated a bacterium that can break down gossypol, a toxic compound in
cotton. Current research is underway to identify the genes(s)
responsible for gossypol breakdown. Cottonseed free of gossypol could
be used for food and feed.
Transgenic plants.--Scientists from the PGEC have developed
transgenic plants with a suppressed shade-avoidance response that will
yield more grain under crowded field conditions than will non-
transgenic plants. Through research such as this on the fundamental
biology of the phytochrome (light-detection) system in plants, the
productivity of crop plants can be increased without increased
application of fertilizers or changes in cultivation practices.
Control of plant tolerance to heavy metals.--Scientists at PGEC are
characterizing several genes that affect metal toxicity in plants.
Plant genes that confer tolerance to toxic metals may serve as tools
for regulating and altering the rate and amount of toxic metal
accumulation in plants. The goal of this research is to reduce the
accumulation of toxic metals in food plants, and to enhance the rate of
toxic metal accumulation in selected other plants so that they can be
used for bioextraction of toxic metals from contaminated soils.
Genic control of cell division in pollen.--Flower development and
pollination are critically important to agriculture, because the
world's major food crops are the products of seeds, which are the
products of flowering. Many aspects of gene regulation during
development of pollen grains are poorly understood and therefore
genetic manipulation of pollen is difficult. Scientists at the PGEC
have characterized genes that control development of a functional
pollen grain through a tissue culture maturation system that assesses
the relative importance of different types of gene regulation to pollen
development. Manipulation of these genes will enable the development of
novel pollen (``male-sterility'') systems to improve germplasm and to
facilitate hybrid seed production.
Control of plant cell growth.--As in animals, plants have hormones
that regulate virtually all aspects of growth and development.
Ethylene, a plant hormone, triggers ripening and decay of many fruits.
Scientists at the PGEC have blocked ethylene synthesis in ripening
tomatoes using a DNA-based technique termed ``antisense technology.''
The genetically engineered tomatoes have excellent flavor compared to
normal tomatoes, because they can ripen on the plant before picking
without spoilage. This discovery has been licensed to the private
sector and is being commercialized. Now the scientists are putting
their genetic tools to work studying other important metabolic
processes governed by auxin. The long-term goal of the investigation is
to enhance the value of agronomic products and to enhance crop
productivity.
New approaches for isolating resistance genes to potato late
blight.--Most plant diseases kill some plants but leave others
untouched. Naturally-occurring genes for disease resistance offer huge
potential for protecting crops from pathogens to which they are
susceptible. The goal of this project is to transfer highly effective
disease resistance genes into crops that suffer disease problems.
Scientists at the PGEC previously isolated the tobacco mosaic virus
resistance gene N from tobacco. The genetic material of tobacco,
tomato, and potato are highly similar in content and organization, and
homologues to the N gene have been located in a region of the potato
genome bearing genes that confer resistance to the fungus that causes
potato late blight and to the virus that causes a potato viral disease.
This program is currently trying to isolate and determine the sequence
of the genetic material near the resistance gene in potato. If
successful, this research will have developed an effective approach for
the isolation of numerous disease resistance genes of most crops, as
well as providing a genetic means of combating diseases that threaten
agriculturally-important crops.
peas and lentils research
Question. Please describe your research effort in peas and lentils
research.
Answer. ARS conducts research on genetic improvement of peas and
lentils with these efforts concentrated at Pullman and Prosser,
Washington. Programs at other locations focus on problems of production
and post-harvest issues.
Question. By laboratory, what funds were obligated in fiscal year
1996; what is your current estimate?
Answer. The funding for peas and lentils for fiscal year 1996 and
1997 is as follows:
------------------------------------------------------------------------
Fiscal year--
-------------------------------
Location 1996
obligations 1997 funds
------------------------------------------------------------------------
Albany, CA.............................. $153,046 $143,500
Beltsville, MD.......................... .............. 64,000
Pendleton, OR........................... 14,874 87,600
Prosser, WA............................. 199,224 220,000
Pullman, WA............................. 534,512 478,200
-------------------------------
Total............................. 901,656 993,300
------------------------------------------------------------------------
Question. How many scientists are involved in Federal/State peas
and lentils research?
Answer. The ARS staff for peas and lentils research is 3.3
scientist years.
Question. Does ARS execute cooperative agreements for this
research?
Answer. When appropriate, ARS executes cooperative agreements to
accomplish some of the goals of this research.
Question. Explain with whom and how much.
Answer. In 1995, ARS executed a specific cooperative agreement with
Ireland on the Mycosphaerella blight fungus of peas, and funded it with
$4,500. The purpose was to evaluate resistance of U.S. Plant
Introduction accessions of peas where the disease is severe. In 1995,
ARS executed a specific cooperative agreement with Washington State
University in Mount Vernon, Washington, and funded it with $12,745 in
fiscal year 1995 and $3,225 in fiscal year 1996. The purpose was to
evaluate resistance to the pea cyst nematode in field conditions where
the nematode actually occurs.
grape research
Question. Please describe your grape research program including
your efforts in disease research areas of grape phylloxera and grape
virology.
Answer. The ARS grape research program involves efforts to enhance
grape germplasm including development of methods to control pests and
diseases. Activities include maintenance of a National Clonal
Repository for grape germplasm, acquisition, evaluation and
distribution of grape germplasm, development of quarantine and
postharvest strategies to control arthropod pests, genetic improvement
of grape scions and rootstocks, development of alternatives to soil
fumigation with methyl bromide, and development of improved cultural
practices to improve quality, production efficiency, and pest control.
Grape phylloxera research is conducted on the cause of the death of
newly planted phylloxera-resistant rootstocks in young replanted
vineyards. This work is focused on the role of grapevine viruses and
water mold fungi. Grape rootstocks with resistance to phylloxera and
other soilborne pests are being developed by conventional breeding and
evaluated. Using biotechnology, new genes providing resistance to
soilborne pests are also being introduced into grapes.
Grape virology research involves identifying the causal agents,
describing disease spread, and devising control methods for viruses and
graft-transmissible pathogens affecting grapevines. This research
effort also includes developing specific assays for the rapid detection
and identification of the pathogens. Sensitivities of various
commercial grape rootstocks to viruses and graft-transmitted pathogens
are being investigated.
Question. Where is this research implemented?
Answer. This research is implemented at Geneva, New York; Fresno,
and Davis, California; Poplarville, Mississippi; Prosser, Washington
and Kearneysville, West Virginia.
Question. Provide actual obligations and staffing for 1996 actual.
Answer. Actual obligations and staffing for fiscal year 1996 for
all grape research was $2,486,750 supporting 7.5 SY's. This included
research on grape phylloxera at $255,777 with 0.6 SY and grape virology
at $222,522 with 0.6 SY.
Question. Provide funding and staffing for 1997 current and fiscal
year 1998 estimated for research on grapes.
Answer. Funding in fiscal year 1997 and projected for fiscal year
1998 is $2,420,600 supporting 7.0 scientists.
hops research
Question. Please describe your research on Hops.
Answer. Hops research in ARS includes breeding and genetics in the
development of new varieties with improved flavor characteristics. In
addition, breeding for pest and disease resistance is an important
component in the program. ARS also maintains a collection of foreign
and domestic hop varieties and breeding germplasm used in the research
program.
Question. Whom does ARS cooperate with in this program?
Answer. ARS cooperates with scientists at Washington State
University at Prosser and with the University of Idaho in Moscow.
Oregon, Washington, and Idaho are the three hop producing states.
Question. Please provide your actual obligations and staffing for
1996.
Answer. Actual obligations in fiscal year 1996 for Hops research
was $374,114. The project was supported by 1.1 scientist years.
Question. Provide funding and staffing for 1997 current and fiscal
year 1998 estimated for Hops research.
Answer. ARS Hops research is conducted in Corvallis, Oregon.
Funding for fiscal year 1997 is $388,200 with 1.1 scientist years of
support. The same funding and scientist year allocation is projected
for fiscal year 1998.
cooperative research
Question. Describe the programs jointly carried out between ARS and
Mississippi State University and the funding involved for fiscal years
1997 and 1998.
Answer. The programs in the form of specific cooperative agreements
jointly carried out between the designated ARS locations and
Mississippi State University follow. Except where noted, funding for
fiscal year 1997 and estimated funding for fiscal year 1998 are the
same.
College Station, Texas
--Catfish food safety--$324,700 (est)
--Classification and database development of sorghum accessions
screened for acid soil tolerance--$2,800 (est)
Mississippi State (Starkville), Mississippi
--Development of the GOSSYM-COMAX systems--$95,000 (est)
--Insertion of competitor receptors from F strain Mycoplasma
gallisepticum into M. gallinarum--$55,800 (est)
--Economic returns on inputs for environmental control of poultry
houses--$25,500 (est)
Stoneville, Mississippi
--Research on kenaf in Mississippi--FY 1997: $418,000 (est); fiscal
year 1998: $0.
--Interaction of herbicides with soil humic materials--$15,000 (est)
ARS Headquarters
--Impact of Management Systems Evaluation Area on fisheries
characteristics and ecology of MS Delta watersheds and oxbow
lakes (2)--$120,900 (est)
--Aflatoxin development in modules during field storage in the
Midsouth--$22,900 (est).
Question. What accomplishments have been generated from these
research initiatives?
Answer. Catfish food safety: Treatment of catfish fillets with two
percent malic or tartaric acids (naturally-occurring chemicals)
extended microbial shelf-life by 6 days, maintained acceptable flavor,
and reduced the human pathogen, Listeria monocytogenes. A Master-pack
system was developed and proven to increase shelf-life of catfish
fillets, even after placement above freezing conditions. An application
to FDA for approval in catfish and other aquaculture species is
pending.
Classification and database development of sorghum accessions
screened for acid soil tolerance: 5400 Ethiopian sorghum lines have
been screened for acid tolerance in soils in Columbia, South Carolina.
Data will be entered in the GRIN database.
Development of the GOSSYM-COMAX systems: Cotton growth has been
correlated with tissue potassium content and potassium deficiency in
soils from areas of poor cotton productivity. The information is near
the final analysis stage and will be disseminated to aid producers,
consultants and state extension personnel in providing updated
extension bulletins describing potassium deficiency symptoms. This
information will be incorporated into the GOSSYM-COMAX decision support
model for cotton production.
Insertion of competitor receptors from F strain Mycoplasma
gallisepticum into M. gallinarum: DNA has been prepared from the F
strain Mycoplasma gallisepticum for use in the construction of DNA
libraries. Cytakesin mgcl has been cloned for transformation into the
genome of Mycoplasma gallinarum.
Economic returns on inputs for environmental control of poultry
houses: The effect of environmental temperature on growth and feed
conversion in poultry has been determined. This information will be
used to ascertain the economic return from changing environmental
conditions inside poultry houses.
Research on kenaf in Mississippi: Early breeding and selection
studies on kenaf indicate that yield improvements for kenaf in the
Midsouth are possible.
Impact of MSEA on fisheries characteristics and ecology of MS Delta
watersheds and oxbow lakes: In upland soils with erodible soils and
flat slopes of two to six percent, no-till management was highly
effective in controlling soil erosion. Cover crops enhanced the
effectiveness of no-till production. Yields and profitability of crops
with no-till management were equal to or greater than those from
conventionally-tilled crops. The project has established five riparian
zone sampling sites to evaluate the movement and degradation of
herbicides in oxbow lake watersheds.
Aflatoxin development in modules during field storage in the
Midsouth: Two modules have been constructed near Corpus Christi, Texas,
and two in Yuma, Arizona, where aflatoxin contamination of cottonseed
is high. Additionally, two modules have been constructed at Mississippi
State, Mississippi. The modules are being used to study aflatoxin
development during field storage of cotton and wheat. The highest
concentrations of aflatoxin production to date occurred in 1996 Texas
modules and seem to be related to temperature within the modules.
Question. Describe the programs jointly carried out between ARS and
University of Mississippi and the funding involved for fiscal years
1997 and 1998.
Answer. The programs in the form of specific cooperative agreements
jointly carried out between the designated ARS locations and the
University of Mississippi follow. Except as noted, funding for fiscal
year 1997 and estimated funding for fiscal year 1998 are the same.
Oxford, Mississippi
--Acoustic detection of insects in field crops--$176,500 (est)
--Acoustic principles and techniques in soil & sediment research--
$430,100 (est)
--Numerical modeling of soil erosion & transport processes to support
the DEC project--$847,000 (est)
--Transport of sediment by wave power in shallow flow--$30,000 (est)
--Development of natural products from plants and microbes for
replacement of synthetic pesticides--$165,400 (est).
Headquarters funding
--Role of tension cracks in surface runoff--$44,700 (est)
--Impact of agricultural MSEA on water quality and ecology of MS
Delta watersheds & oxbow lakes--$40,000 (est)
Beltsville, Maryland
--Remote sensing & associated technology transfer to production
agriculture--Fiscal year 1997: $70,000 (est); fiscal year 1998:
$0
Question. What accomplishments have been generated from these
research initiatives?
Answer. Acoustic detection of insects in field crops: Acoustical
instruments have been developed for the detection of insect sounds in
the soil, on plants, and in the laboratory environment. The instruments
are being used in experiments while they are being further developed
and refined. Previously unknown sounds made by imported fire ants have
been detected. This technology has great potential for sensitive
detection of small numbers of insect pests.
Acoustic principles and techniques in soil and sediment research:
The research has established: (1) feasibility of rapid, inexpensive,
and non-invasive characterization of soil properties; (2) potential of
acoustical techniques in describing the microtopography of agricultural
lands; and, (3) usefulness of acoustical techniques in monitoring
stream bed form.
Numerical modeling of soil erosion & transport processes to support
the Demonstration Erosion Control project: Improvements have been made
in the modeling of soil erosion and sediment transport for watersheds
and channel systems. A one-dimensional model for routing flow and
sediment through natural channels with in-stream structures was
upgraded and verified. A two-dimensional model has also been developed
for predicting the propagation of unsteady flows along a channel with
in-stream structures.
Results demonstrated that when stream corridors needed restoration
to be stabilized, degraded channels, water quality, aquatic habitat,
and ecosystem health can be improved at little or no extra cost.
Impact of agricultural MSEA on water quality and ecology of MS
Delta watersheds and oxbow lakes: Research on CRP lands has established
the effectiveness of grass strips in trapping sediments.
Remote sensing and associated technology transfer to production
agriculture: Physical and chemical properties of soils were combined
with remotely sensed and global positioning system (GPS) data for two
fields. Geostatistics was used to establish optimum designs for
experiments.
Question. ARS maintains ARS research locations in Mississippi at
Stoneville, Starkville, Oxford, and Poplarville, Mississippi. Describe
the programs carried out at these locations.
Answer. The programs and their locations are described below:
Stoneville, Mississippi--The research programs at Stoneville,
Mississippi, are broad in scope and content. They include: the
development of soybean genotypes and management systems that are
specific to the early season and stress environments of the southern
production area, including host resistant germplasm to manage soybean
cyst nematodes; improved surveillance and pest control strategies for
areawide management of cotton insect pests, and biological and genetic
strategies for controlling the insect pests of soybeans, cotton, and
pecans; the biochemical genetics of fiber quality, including
identification of genetic-physiological parameters that enhance fiber
quality, and the application of this knowledge to the improvement of
cotton varieties; the development and evaluation of sustainable weed
management strategies for cotton, soybeans and other crops, including
assessment of the ecological and environmental benefits of reduced
herbicide use, and the replacement of herbicides and methyl bromide by
microbiological agents; the development and implementation of new
technologies in cotton ginning that will maintain or enhance fiber
quality while saving energy and other costs and improve efficiency; the
breeding, genetics, and endocrinology of catfish; and the development
of innovative technologies for more efficient pesticide applications in
field crops.
Mississippi State (Starkville), Mississippi.--The research programs
at Starkville, Mississippi include: the development of integrated pest
management strategies with emphasis on boll weevil and other cotton
insects, as well as augmentation biocontrol and insect mass-rearing;
the development of insect, disease and nematode resistant varieties of
corn for the south; the modification and management of forage legume
traits that enhance beef and dairy cattle production; the etiology and
control of clover diseases caused by fungi, nematodes, and viruses;
germplasm conversion and evaluation, and genetic enhancement in cotton,
including host plant resistance to insects, diseases, and nematodes;
the development of decision support systems for cotton production and
cotton pest management; and nutritional and environmental management
strategies, including the diagnosis and control of mycoplasmosis, to
improve the quality and production efficiency of poultry.
Oxford, Mississippi.--The program at the National Sedimentation
Laboratory emphasizes interdisciplinary research on the processes,
control, measures, prediction, and evaluation procedures associated
with soil erosion by water; transport and deposition of sediment; and
movement of agricultural chemicals in watersheds, streams, and lakes.
At the National Center for the Development of Natural Products, the ARS
Natural Products Research Unit research goals include: discovery of
natural products that can safely be used to manage agricultural pests;
cultural and genetic alteration of crops and cover crops for self-
generation of natural chemicals to manage pests; and development of
alternative crops producing high-value natural products such as
pharmaceuticals, pesticides, and flavorings.
Poplarville, Mississippi.--Research at Poplarville includes:
breeding and cultural evaluation of new and improved small fruits for
the Gulf Coast region including cultivars of strawberry, blackberry,
highbush blueberries and muscadine grapes; development of new and
improved small fruit management practices to increase yields, minimize
production losses, improve fruit quality and conserve natural
resources; determination of factors that regulate flowering, fruiting,
dormancy, yield, cold hardiness, and tolerance to other environmental
stresses; determination of optimum planting systems, irrigation and
cultural systems adapted to the Gulf States region; and determination
of the chemical and physical properties, nutritive value and quality of
muscadine pomace and develop methods for utilization of products of
pomace by the food industry.
Question. What programs are coordinated with Mississippi State
University, the University of Mississippi, and the University of
Southern Mississippi?
Answer. Programs that are coordinated with Mississippi State
University include GOSSYM-COMAX systems research, boll weevil research,
genetic engineering of Mycoplasma gallinarum, research on environmental
control of poultry houses, kenaf research, weed research, and the
Mississippi Delta MSEA project. Programs that are coordinated with the
University of Mississippi include acoustic detection of insects in
field crops, the Demonstration Erosion Control (DEC) project, the
Mississippi Delta MSEA project, and natural products research. Programs
coordinated with the University of Southern Mississippi include the
Lower Delta Human Nutrition Initiative.
cotton research
Question. Describe by location the pre- and post-harvest cotton
research initiatives in ARS.
Answer. Cotton research initiatives (projects) in ARS, by location,
are as follows:
Auburn, AL.--Managing wheeled traffic to avoid soil compaction in
cotton production systems.
Phoenix, AZ.--Management of the sweetpotato whitefly, including the
basic genetics and ecology of the insect; development of economic
thresholds for control action; on-farm integrated pest management;
reduction of lint stickiness in infested cotton; and host plant
resistance to whiteflies. Also, integrated management for suppression
of the pink bollworm, crop management for efficient production, and
breeding and genetics of extra-long staple (American Pima) cotton.
Albany, CA.--Cost-effective means of rearing biological control
agents for cotton pests.
Fresno, CA.--More efficient ways to manage irrigation of cotton,
especially drip irrigation systems; crop management in the irrigated
desert.
Shafter, CA.--Integrated systems for managing cotton production in
the San Joaquin Valley, including crop production efficiency, pests and
diseases, computer modeling of the crop, and improved equipment for
production and harvesting.
Fort Collins, CO.--Storage and maintenance of the nation's
germplasm collection.
Gainesville, FL.--Ecology, behavior, and biological control of
insect pests; modification of insect behavior through manipulation of
insect semiochemicals.
Athens, GA.--New means of fiber processing for pulp.
Tifton, GA.--Production systems for the Southeast, emphasizing
management of nematodes, weeds, and insect pests with reduced use of
nematicides and other pesticides.
New Orleans, LA.--New instrumentation for cotton fiber quality
evaluation; new processes for adding value to fiber and to textiles;
molecular, biochemical, and ecological analysis of cotton fiber quality
factors; and new products from cotton. Also, elimination of formation
of aflatoxins in cottonseed; and development of new products and new
processes to enhance utilization of cottonseed.
Beltsville, MD (Headquarters).--Area-wide integrated management of
insect pests; demonstration trials of biocompetitive strains of
Aspergillus flavus to reduce aflatoxin contamination of cottonseed.
Mississippi State, MS.--Breeding cotton for resistance to
pathogens, nematodes, and insects; integrated management of insect
pests; and development and transfer to users of a computer model of the
cotton crop production system.
Oxford, MS.--Farming systems that decrease soil erosion and improve
water quality in the Mississippi Delta region.
Stoneville, MS.--Breeding for fiber quality and resistance to
insect pests; improved crop management with environmentally acceptable
production practices; operation of the National Cotton Variety Testing
Program; technology for mass rearing of beneficial insects; biological
control and other management strategies for insect pests; technology
for area-wide control of pests; development of sustainable alternatives
to herbicides for weed management in cotton, emphasizing biocontrol;
management of herbicide-resistant cotton crops; means to keep
herbicides from contaminating waters; development and implementation of
new ginning technology; and more efficient and effective technology for
application of pesticides to the crop.
Columbia, MO.--More efficient and effective propagation of insects
for biocontrol of cotton pests.
Las Cruces, NM.--Gin plant design and operation to retain fiber
quality and spinnability of cottons from the West.
Fargo, ND.--Basic genetics, physiology and molecular biology of
insect pests.
Wyndmoor, PA.--New value-added industrial products and biodiesel
fuel from seed oils and tallow.
Clemson, SC.--Evaluation of cotton spinning performance and end use
quality; and instrumentation systems for improved cotton grading.
Florence, SC.--Developing germplasm and soil, crop, and irrigation
management practices suitable for Southeastern cotton production
systems.
College Station, TX.--Maintenance of the working germplasm
collection for cotton; genome mapping for improved cotton breeding;
development and testing of area-wide strategies for managing important
insect pests of cotton; improved aerial application technology for
pesticides; and basic and applied research to control pathogens and
nematodes of cotton.
Lubbock, TX.--New principles and new technology for efficient
irrigation of cotton and other crops; improving plant productivity
under stress conditions (unfavorable environments) in High Plains
production systems; and improved harvesting and ginning technologies
for stripper-harvested cottons.
Temple, TX.--Sustainable production systems to minimize soil
erosion in clay soils.
Weslaco, TX.--Insect pest suppression through area-wide integrated
pest management; development of biological control systems;
conservation tillage practices for cotton; remote sensing capability
for resource assessment; and breeding pest-resistant cottons.
Montpellier, France.--Collection and evaluation of candidate
biological control organisms from Eurasia for control of insect pests,
weeds, and pathogens.
Question. For your overall cotton research program, provide funding
and staffing by project.
Answer. Funding and staffing for the overall cotton research
program are as follows:
------------------------------------------------------------------------
Fiscal year 1997--
Project title ---------------------------
Funds Scientists
------------------------------------------------------------------------
COTTON
Soil dynamics, plant growth, and organic
waste for sustainable management of
degraded soils............................ $218,900 0.8
Biology, ecology, sampling and control of
whiteflies................................. 1,490,500 5.2
Cotton physiology, genetics, and plant
insect interactions........................ 1,277,300 5.0
Integrated pest management strategies for
cotton insect control...................... 1,202,900 3.5
Extrusion processing of insect diets for
biological control programs................ 107,900 0.4
Irrigated desert research--II............... 48,100 ..........
Irrigation water and crop management to
sustain productivity and protect water
quality.................................... 91,800 .2
Western integrated cropping systems research 1,154,000 4.0
Preservation of base plant germplasm
collection................................. 165,300 .1
Biocontrol through artificial rearing of
natural enemies and manipulation of host
plant resistance........................... 120,000 .5
Behavioral ecology and management of crop
insect pests with semiochemicals........... 155,200 .3
Insect biological control through behavioral
and genetic manipulation................... 300,300 .9
Chemistry and biochemistry of insect
behavior, physiology, and ecology.......... 195,700 .6
European based research on biological
control of sweetpotato whitefly............ 89,400 .4
Microbial treatments to enhance value of
agricultural crops and products............ 34,400 .2
Genetic approaches for managing the corn
earworm, helicoverpa zea, and the faw
spodoptera furgiperda...................... 27,300 .1
Integration of tachinid parasitoids and
pathogens to suppress insect pests of corn. 55,900 .2
Development of innovative pest control
strategies with biological and chemical
control agents............................ 116,200 .4
Biology and pathogenicity of noctuidonema
guyanense on spodoptera frugiperda and S
exigua..................................... 76,500 .2
Management of nematodes to reduce crop loss
and nematicide use on irrigated crops of
the Southeast.............................. 38,200 .1
Develop weed management alternatives to
methyl bromide for irrigated Southeastern
crops...................................... 32,500 .1
Molecular analysis of cotton fiber
development to improve cotton fiber quality 285,100 1.0
Treatments for delayed cure applications for
cotton fabrics............................. 744,300 3.0
Cotton with improved wear and resiliency by
facile polymerization reactions............ 650,200 2.0
Improved durability press cottons via a
multifaceted approach...................... 837,400 3.0
Nonwoven textiles from cotton and other
natural fibers............................. 586,400 1.1
Develop technology for producing improved
and ecologically friendly cotton-rich
textiles................................... 714,900 2.7
Correlations between fiber breakage and
properties, surface modifications and
textile processing quality................. 856,200 1.9
Biochemical modification of cotton textiles
for enhanced performance................... 735,200 5.5
Variation in structure and performance of
cotton from variety, growth history, and
process- ing.............................. 1,157,600 5.4
Nature and causes of motes and undeveloped
cotton fibers, as related to dyeing
imperfec- tions........................... 661,400 4.0
Development of improved instrumentation to
measure cotton maturity and fineness....... 418,800 1.2
Area-wide management of agricultural pests.. 488,800 ..........
Biochemistry and genetics of host plant
resistance to insects, diseases, and
nematodes.................................. 190,000 1.0
Biological control of cotton insects........ 437,100 1.5
Germplasm enhancement in cotton with the
primitive race stocks of gossupium hirsutum 244,200 1.0
Genetic enhancement for resistance to
insects and nematodes in cotton............ 539,200 1.1
Development of model-based decision support
systems for cotton production management... 822,900 3.0
Integrated computer-based decision aid for
cotton pest management..................... 428,800 3.0
Development of integrated control procedures 883,500 3.0
Improved erosion control for upland areas
and reduced sediment production in DEC
watersheds................................. 101,000 .3
Farming systems for improved water quality/
ecology for a Mississippi Delta MSEA....... 49,100 .1
Development of mass propagation technology
for beneficial and pest insects............ 764,300 1.5
Develop sustainable integrated weed
management systems for cotton, soybeans,
and other crops............................ 134,100 .3
Ginning methods to enhance fiber quality and
value...................................... 594,100 2.5
Development and implementation of new
technologies in cotton ginning............. 603,600 2.6
Development of technology for efficient crop
production systems......................... 229,400 .8
Develop innovative technology for more
efficient pesticide application in field
crops...................................... 647,200 2.7
Replacement of herbicides and methyl bromide
by microbiological control of weeds........ 137,400 .6
Reduce herbicide contamination of surface
water by using alternative management
systems cotton production 16,400........... ..............
Biochemical genetic and ecological effects
of natural and synthetic herbicides........ 137,400 .5
Soil quality of sustainable agricultural
systems and impacts on herbicide and
alternative weed management systems........ 256,300 1.0
Genetic-physiological parameters that
enhance fiber quality...................... 495,800 1.6
Biological and genetic control of crop pests
emphasizing heliothis...................... 417,100 0.9
Areawide management of cotton insect pests
in midsouth development of improved
surveillance and pest management technology 678,400 3.0
Control strategies for heliothis/helicoverpa
spp. and other field crop insects in cotton
agroecosystem.............................. 1,025,900 3.0
Biochemical genetics of fiber quality and
its application to the improvement of
cotton varieties........................... 132,400 1.0
Development of high yield, high quality, and
environmentally acceptable cotton
production systems......................... 459,100 2.1
National Cotton Variety Test Program........ 458,900 .2
Developmental and genetic factors useful to
the propagation of beneficial insects for
biocontrol................................. 242,200 .8
Development of ginning systems and knowledge
to enhance value and textile utility of
Western cottons............................ 962,000 2.7
Biochemical and molecular approaches to the
development of artificial rearing diets and
DNA probe.................................. 494,100 1.5
Genes controlling insects development and
reproduction and methods for insect genetic
transformation............................. 462,800 .7
Cotton quality identification and
measurements affecting processing
performance and end use quality............ 2,179,500 6.0
Management systems that enhance soil
productivity in the Southeastern coastal
plain...................................... 99,600 .4
Cotton germplasm enhancement and production
systems with higher lint yield and improved
fiber quality.............................. 377,300 1.5
Development of area-wide management
strategies for adult corn earworm and other
crop insect pests.......................... 266,300 1.1
Aerial application technology for crop
protection................................. 432,400 1.7
Acquisition, evaluation, maintenance and
systemization of cotton germplasm.......... 412,700 1.2
Cotton germplasm evaluation and genome
mapping.................................... 389,900 .8
Identify and develop alternative strategies
for control of nematode parasites on cotton
and kenaf.................................. 339,600 1.2
Develop nonchemical strategies for control
of cotton diseases......................... 979,300 3.7
Improving plant performance in adverse
environment................................ 369,600 .8
Development of cotton germplasm with
improved tolerance to abiotic stresses..... 150,700 .6
Characterizing plant responses to thermal
stress and their metabolic and molecular
basis...................................... 264,300 .9
Harvesting and ginning technologies for
stripper cotton............................ 674,300 3.5
Managing stress for improved water use
efficiency and semi-arid crop production... 130,300 .6
Cotton root systems: genetic diversity and
response to environmental stress........... 190,600 1.0
Sustainable agricultural production systems
for clay soils............................. 62,800 .3
Mass propagation/augmentation of wasp
parasites to manage weevils, caterpillars,
and other pests............................ 715,200 .9
Biology and ecology of crop pests
emphasizing area-wide suppression of boll
weevil and corn earworm.................... 568,400 1.6
Spatial information technology and computer-
aided decision support systems for field
management................................. 61,400 .1
Integrated production systems............... 145,400 .4
---------------------------
Total................................. 36,988,900 123.1
===========================
COTTONSEED
Development of processes to improve oilseed
utilization................................ 765,100 3.0
Development of biologically active peptides
as pesticides.............................. 65,600 .2
Aflatoxin control through targeting gene
cluster governing aflatoxin synthesis in
corn and cottonseed........................ 519,200 2.1
Modification of fungal community structure
to improve food safety..................... 397,900 1.6
The conversion and utilization of
agricultural byproducts as adsorbent
material................................... 103,700 .3
Aflatoxin control through addition of
enhancement of antifungal genes in corn and
cotton..................................... 674,100 3.4
Preharvest control of aflatoxin............. 219,200 ..........
Development of ginning systems and knowledge
to enhance value and textile utility of
western cottons............................ 106,900 0.3
Conversion of natural glycerides to higher
valued products............................ 214,100 .8
Harvest and ginning technologies for
stripper cotton............................ 92,000 .5
---------------------------
Total................................. 3,157,800 12.2
===========================
Total for cotton and cotton seed...... 40,146,700 135.3
------------------------------------------------------------------------
Question. What recent accomplishments have come from the research?
Answer. A few recent accomplishments of ARS cotton research are as
follows:
New cottons from India available to broaden the genetic base of
cotton.--An ARS geneticist from Florence, SC, in cooperation with other
scientists, analyzed the pedigrees of modern cotton varieties to prove
that the genetic base of modern cotton varieties is narrowing. The
``sameness'' of varieties that are supposedly genetically distinct
increases their vulnerability to a disastrous disease epidemic. Another
ARS geneticist from College Station, TX, has recently collected more
than 1100 cotton accessions from India, which will be added to the
national germplasm collection and made available to breeders. These
Indian cottons will help to broaden the genetic base of American cotton
varieties.
Cotton seedling diseases suppressed.--ARS scientists in College
Station, TX, identified a fungus that can be applied to cotton planting
seed as a biological control agent for seedling diseases. In tests
across the Cotton Belt, the combination of the biological control agent
and a fungicide was superior to fungicides alone in controlling
seedling diseases. The biological control agent is being commercialized
by the private sector.
Nectariless cotton resists tarnished plant bug damage.--ARS
genetics research in Stoneville, MS, produced a nectariless cotton
variety (lacking a gland called the ``nectary''). These plants sustain
about 50 percent less damage from tarnished plant bugs than do normal
plants. Seed companies are now breeding the nectariless trait into Bt
cotton because of it reduces the need for insecticides to control pests
unaffected by the Bt.
Artificial diet for rearing predatory green lacewing larvae.--These
larvae are voracious predators of whiteflies, aphids, and many other
crop pests, but until now they had to be reared on insect eggs that
cost more than $600 per kg. On the new artificial diet, developed by
ARS in Phoenix, AZ, they can be reared for 1/100 the cost, which will
open the market for their use as biological control agents in cotton
crops in the field. A patent is pending for the diet.
``Moisture-seeking'' cottonseed planter developed.--ARS in Shafter,
CA, has developed and patented a planter that places the seed in soil
with constant moisture, despite variation in soil texture or moisture
distribution. The planter is expected to eliminate the need for
replanting on virtually all cotton acreage in the West, for a savings
of $10 million per year.
Boll weevil management system for South Texas.--ARS in Weslaco, TX,
demonstrated that Catolaccus grandis, a wasp parasite of the boll
weevil, killed 96 to 99.6 percent of boll weevils in the field. Wasps
reared on an artificial diet were effective. The total cost of using
Catolaccus grandis, including rearing and release, is less than $23 per
acre per year. A boll weevil management system has been proposed that
reduces insecticide runoff from the field by \2/3\, increases
profitability, and creates a new industry (propagation of natural
enemies of the boll weevil).
Core-wrapped yarns.--ARS research in New Orleans, LA, has led to
development of new spinning technology for producing a unique core-wrap
yarn. The yarn consists of a strong synthetic core fiber with a sheath
of pure cotton fibers. The core and sheath do not slip or separate
during use. The synthetic core provides high strength, durable press,
and other valuable properties, while the sheath provides the comfort of
pure cotton. The patented spinning process has been licensed to a U.S.
company for commercial use.
screwworm research
Question. What objectives are currently underway on screwworm
research?
Answer. There are seven objectives underway on screwworm research.
All of these objectives are aimed at supporting the APHIS screwworm
eradication program in Central America and FAO screwworm efforts in the
Caribbean region. The ultimate objective is to free Central America and
the Caribbean from screwworm so that we can either eliminate or
minimize the possibility of reintroduction of screwworm into the U.S.
The seven objectives of ARS screwworm research are to develop:
--a vigorous screwworm strain for mass production of sterile flies;
--new methods and validate the existing methods for surveillance,
trapping, and monitoring of screwworm in Central America and
the Caribbean region;
--an easy to use, color-based Elisa method to distinguish the primary
from the secondary screwworm under field conditions;
--genetic fingerprints of feral screwworm populations of Central
America and the Caribbean region so that we can trace the
source of screwworm reinfestation in eradicated areas;
--improved methods for the study of ecology, biology and population
dynamics of screwworm populations in their natural habitats.
This includes study of behavior, specially the habitat
preferences, and dispersal of sterile and native flies using
remote sensing and Geographic Information System technologies;
--economical substitutes for the larval diet and cost effective
screwworm rearing technologies. This includes development of
male-only strain; and
--cryopreservation methods for long-term storage of screwworm eggs to
reduce the cost of continual screwworm rearing during the
period of low demand for sterile flies and to increase the
production of screwworm on short notice in response to high-
demand and emergency periods.
Question. At what locations is the research conducted?
Answer. ARS conducts its screwworm research at four locations.
These include Beltsville, Maryland; Lincoln, Nebraska; Fargo, North
Dakota; and Panama City, Panama.
Question. Provide resources associated with this research by
location.
Answer. The funding associated with screwworm research in fiscal
year 1997 is as follows:
Fiscal year 1997
Location funds
Beltsville, MD................................................ $60,600
Lincoln, NE................................................... 612,400
Fargo, ND..................................................... 78,400
Panama City, Panama........................................... 998,000
--------------------------------------------------------------
____________________________________________________
Total................................................... 1,749,400
Question. What work is carried out cooperatively with APHIS?
Answer. ARS conducts six research projects in cooperation with
APHIS. These include:
--development and testing of new vigorous screwworm strains for mass
production of sterile flies;
--development of economical substitutes for the larval diet and cost
effective screwworm rearing technologies. This also includes
development of a male-only strain;
--diagnosis and correction of problems that occur in mass production
of screwworm; such as breeding of house fly populations in the
mass rearing facility or decline in screwworm pupal weights;
--field testing of new screwworm trapping technologies developed by
ARS. This includes the use of remote sensing methods;
--diagnosis of factors contributing to the lingering screwworm
infestations in areas under eradication; and
--collection of feral screwworm samples from areas targeted for
eradication for genetic fingerprinting.
foot-and-mouth research
Question. Describe your research on Foot-and-Mouth Disease (FMD).
Answer. All ARS research on FMD is conducted at the Plum Island
Animal Disease Center (PIADC), Greenport, New York. The first goal of
the FMD program is to continue development of genetically engineered or
altered FMD virus that can be used to make vaccines that in the future
would allow production and safe use outside of biocontainment. A second
goal is development of diagnostics that can be produced and used
outside of biocontainment and which can detect and differentiate
vaccinated from infected animals. No such diagnostics currently exist.
A third goal is to understand the basic cellular immune response of
infected cattle in order to optimize vaccines, diagnostics, and
alternative control measures. A fourth goal is to examine why some
animals recover from infection but continue to shed virus.
Question. Provide funding and staffing for fiscal years 1997 and
1998.
Answer. In fiscal year 1997, funding of $5,167,900 including 3.9
SY's was allocated to Plum Island Animal Disease Center. The same
amount of resources is proposed in the fiscal year 1998 Budget.
Question. How do we cooperate with foreign countries in FMD
research?
Answer. The ARS FMD program continues to maintain a number of
international research collaborations on a formal and informal basis
throughout the world. These include cooperative agreements, training
programs, and participation in international meetings and on
international committees. PIADC's Foreign Animal Disease Laboratory
holds the North American FMD vaccine bank for Canada, U.S., and Mexico.
Scientists meet at least once a year to update emergency preparedness
plans to make use of this resource in an emergency. Examples of recent
new international collaborations are a proposed Brazil/U.S. project and
a proposed Egypt/Israel/U.S. project. These types of programs allow
international researchers to participate in the development and testing
of new FMD diagnostics and vaccines. Concurrently, such cooperative
programs provide PIADC scientists access to field environments to test
new vaccines and diagnostics that have already been tested in the
laboratory. This permits ARS to validate a new generation of
genetically-engineered vaccines since USDA can not test FMD vaccines in
the U.S. PIADC provides reagents and ideas and shares authorship on
publications with many international groups. Participation in
international workshops recently allowed PIADC to share information on
their molecular expression system used to develop a new generation of
vaccines, and it has resulted in several new collaborations. This
technology is believed to be superior to that used by many European
institutes.
Question. Describe recent outbreaks of FMD and responses to control
or eradicate them.
Answer. The March 1997 outbreak of FMD in Taiwan is one of the most
dramatic examples of how a livestock industry in a country can be
totally destroyed in less than 1 month's time. FMD is highly contagious
and spreads through herds at an alarming rate. More than 700,000 of
Taiwan's 11 million pigs have died of the disease, and 3.6 million more
are being slaughtered. This has resulted in environmental concerns
about how to dispose of the dead swine. This outbreak closed all
markets for Taiwan except those that already have FMD, and Japan has
lost an important trading partner. This crisis will or is expected to
increase total U.S. exports by $.5 billion. Taiwan will have to
completely restock their swine industry with new animals and they are
predicted to need a vaccination program for at least 10 years. The loss
of FMD-free status will completely preclude their export of fresh pork
products. With the number of international travelers entering the U.S.
each day and the fact that FMD virus remains viable in pork and beef
products for long periods of time, the U.S. is constantly concerned
about accidental or terrorist introduction of FMD into the U.S.
livestock population. Environmental concerns associated with the
destruction of large numbers of animals during an FMD eradication
program also contribute to the vulnerability of the U.S. livestock
industry.
research on narcotics
Question. Describe ARS's Program in research on drugs and
narcotics.
Answer. The Agricultural Research Service (ARS) narcotics research
program supports the overall narcotic control programs of federal law
enforcement, foreign affairs, and intelligence agencies.
ARS currently maintains research programs for the eradication of
narcotic crops using chemical and biological means, the identification
of illicit crops using remote sensing, the estimation of narcotic crop
yields, narcotic plant chemistry, and environmentally sound
agricultural alternatives to illicit cultivation in narcotics producing
countries.
Question. Provide funding and staff years for fiscal years 1996-
1998.
Answer. The funding and staffing for ARS narcotics research
programs are as follows:
----------------------------------------------------------------------------------------------------------------
Fiscal year 1996-- Fiscal year 1997-- Fiscal year 1998--
Location -----------------------------------------------------------------------------
Funds Scientists Funds Scientists Funds Scientists
----------------------------------------------------------------------------------------------------------------
Beltsville, MD.................... $2,677,800 9.1 $3,053,200 9.4 $3,051,300 9.4
Weslaco, TX....................... 277,800 1.0 ............ .......... ............ ..........
Headquarters...................... 1,756,400 .......... 1,658,800 .......... 1,657,700 ..........
-----------------------------------------------------------------------------
Total....................... 4,712,000 10.1 4,712,000 9.4 4,709,000 9.4
----------------------------------------------------------------------------------------------------------------
Question. List recent accomplishments and benefits from this
research.
Answer. During the last year, ARS supported herbicidal, eradication
programs in Colombia and Panama, implemented by the U.S. Department of
State. ARS also supported opium crop estimation efforts in Burma,
India, and Laos, an opium evaluation program in Turkey, and implemented
cooperative alternative crop research programs with counterpart
institutions in Mexico, Peru, and the United Nations Drug Control
Program. In support of these overseas efforts, an additional $250,000
was received from the intelligence community, $50,000 from the
Department of State for crop eradication, an additional $265,000
earmarked from Department of State for the Turkish opium program, and
$100,000 from the U.S. Embassy, Lima, for alternative crop development.
ARS is currently in the process of preparing peer reviewed journal
articles relevant to both bioherbicides for narcotic crop control, and
integrated pest management for alternative crop initiatives in the
tropics.
soybean research
Question. What areas of soybean research are you pursuing?
Answer. ARS conducts soybean research at 28 locations in Federal
research laboratories and on university campuses. The program is a
nationally managed, fully coordinated, multidisciplinary approach to
solving production and postharvest needs of soybeans. The locations
with objectives for the research follows:
Albany, CA.--Genetic modification of soybean oil for industrial
use.
Ames, IA.--Genetic research for soybean improvement.
Beltsville, MD.--Develop improved varieties with desired genetic
traits such as resistance to pathogens and insects, and suppression of
weeds, and develop management/crop models.
Brookings, SD.--Integrated crop management systems.
Columbus, OH.--Production optimization, water quality, and flooding
tolerance.
Columbia, MO.--Cropping systems and water management strategies.
Coshocton, OH.--Management practices for erosion control and water
quality.
Florence, SC.--Development of cropping systems to optimize water
management.
Fort Collins, CO.--Acquisition, maintenance, and preservation of
germplasm.
Frederick, MD.--Molecular characterization of soybean dwarf virus.
Gainesville, FL.--Environmental, physiological, and genetic
limitations to production.
Ithaca, NY.--Genetic enhancement of root development.
Lincoln, NE.--Management practices to maximize production
efficiency.
Madison, WI.--Minimize harmful effects of bacterial pathogens.
Manhattan, KS.--Grain odor assessment technology.
Mayaguez, PR.--Winter nursery facilities to accelerate improved
variety development.
Morris, MN.--Environmental and crop management limitations to
production.
New Orleans, LA.--Biomodification of soybean oil for value-added
products.
Oxford, MS.--Develop sustainable cropping systems.
Peoria, IL.--Product development, conversion of oil and protein for
food and new industrial uses.
Raleigh, NC.--Eliminate genetic and physiological limitations to
production and enhance nitrogen fixation.
St. Paul, MN.--Management and cropping practices affecting water
quality.
Stoneville, MS.--Develop insect resistant germplasm and improve
weed control techniques, and host resistance to soybean cyst nematodes.
Tifton, GA.--Develop pesticide technology for control of nematodes,
weeds, and insects.
Urbana, IL.--Develop comprehensive soybean production technologies
and maintain, evaluate, and distribute germplasm.
West Lafayette, IN.--Management practices for weed and disease
control, and develop improved germplasm.
Wooster, OH.--Management practices for pest control and to develop
germplasm for divergent environments.
Wyndmoor, PA.--Develop oil products for industrial use.
Question. List research funding and staff years by location.
Answer. Current funding and scientific years for each location
follows:
------------------------------------------------------------------------
Location 1997 funding Scientists
------------------------------------------------------------------------
Albany, CA................................. $559,300 2.5
Ames, IA................................... 803,300 2.2
Beltsville, MD............................. 4,514,600 15.3
Brookings, SD.............................. 148,600 1.0
Columbus, OH............................... 99,200 0.4
Columbia, MO............................... 267,700 .8
Coshocton, OH.............................. 69,400 .3
Florence, SC............................... 198,400 .8
Ft. Collins, CO............................ 279,100 .5
Frederick, MD.............................. 83,900 .1
Gainesville, FL............................ 52,900 ...........
Ithaca, NY................................. 22,100 .6
Lincoln, NE................................ 63,900 .2
Madison, WI................................ 21,200 .1
Manhattan, KS.............................. 128,200 .6
Mayaguez, PR............................... 120,200 .1
Morris, MN................................. 249,700 1.3
New Orleans, LA............................ 1,063,100 4.0
Oxford, MS................................. 101,000 .3
Peoria, IL................................. 5,643,200 18.0
Raleigh, NC................................ 1,022,600 6.0
St. Paul, MN............................... 307,500 .9
Stoneville, MS............................. 3,515,500 12.0
Tifton, GA................................. 64,000 .4
Urbana, IL................................. 2,117,800 11.1
W. Lafayette, IN........................... 793,900 3.0
Wooster, OH................................ 297,500 1.4
Wyndmoor, PA............................... 741,300 2.7
----------------------------
Total................................ 23,349,100 86.6
------------------------------------------------------------------------
Question. List recent accomplishments obtained in your research on
soybeans.
Answer. ARS focuses its soybean research on developing new uses for
soybeans and on increasing soybean production efficiency so that
production costs are lowered and soybeans are more competitive in the
global market. Several ink formulations have been developed by
scientists at Peoria, Illinois. This work resulted in a patent being
issued for newspaper printing ink and a pending patent for heat-set and
sheet-fed printing inks. Market potential use of soy or vegetable oil
in ink formations is estimated at one billion pounds or eight percent
of domestic soybean oil production and would represent a 300 percent
increase in current industrial use of soybean oil. Modified soybean oil
continues to be evaluated as an alternative for diesel fuel by
developing cost-effective technology for conversion to fatty acid
esters and commercial testing of performance enhancing additives. Work
is progressing on use of soy foamed plywood glues. Soybeans could be
used as a foaming agent for softwood plywood adhesives and replace
blood protein at a lower cost. Work is also continuing to develop
soybean-derived lubricants that are biodegradable and friendly when
lost to the environment such as when used on chainsaws.
Significant advancement has been made toward broadening the genetic
base of soybeans by obtaining hundreds of soybean lines from China and
adding these to the soybean collection maintained at Urbana, Illinois.
The soybean plant originated in China and adding new lines brings new
genes for pest resistance and for developing new value-added products.
The nation's commercial soybean varieties are descended from a small
number of ancestral lines. Thirty-five lines account for more than 95
percent of the genes in all commercial varieties grown in the United
States. Soybean lines also have been developed that are expected to
have longer shelf-lives without developing rancidity, and other lines
have less capability of developing off-flavors. The projected cost
savings for processors is about $200 million per year. A new variety,
jointly released with the University of Illinois, lacks an enzyme
inhibitor that interferes with protein digestion by people and animals,
thus making the meal a higher quality and more nutritious feed. This
will considerably increase the feeding efficiency of animals fed
soymeal. Progress continues in identifying new lines with resistance to
nematode infections and other disease organisms. Drought-resistant
germplasm is nearing the stage of public release, and lines have been
identified that will contribute flooding tolerance genes to soybeans. A
new soyfood variety, ``Pearl,'' has been released and provides a new
high-value product for export to Japan. Another variety recently
released demonstrates it is possible to achieve simultaneous increase
in protein, oil, and yield. The high protein variety ``Prolina'' should
deliver high protein meal for the poultry and swine feed industries.
human nutrition
Question. ARS now has six human nutrition centers. Please explain
the mission of each.
Answer. The mission of each of the six human nutrition centers
follows:
Beltsville Human Nutrition Research Center, Beltsville, Maryland.--
Defines the role of food and its components in optimizing health and
reducing the risk of nutritionally related disorders in the diverse
American population. To accomplish this mission, the Center develops
new methods of food analysis; determines the role of nutrients and
their interactions in maintaining health; monitors nutritional intakes
and maintains the database of the nutrient content of foods; studies
the expenditure of energy by using direct and indirect calorimetry; and
investigates the consequences of altered nutrient intakes in free-
living humans.
Jean Mayer USDA Human Nutrition Research Center on Aging at Tufts
University, Boston, Massachusetts.--Defines safe and adequate nutrient
intakes and identifies factors that may contribute to degenerative
processes associated with aging. To accomplish this mission, the Center
determines factors related to prevention of age-related loss of bone
density leading to osteoporosis and fracture, and the preservation of
muscle strength; identifies dietary factors critical in slowing or
preventing cataract development; determines the relation of antioxidant
food components to heart disease and immune function; and explores
relationships between vitamins and brain function, stroke, and
dementia.
Grand Forks Human Nutrition Research Center, Grand Forks, North
Dakota.--Determines nutrient needs for humans with an emphasis on
mineral element requirements that prevent disease and promote health
and optimal function throughout life. To accomplish this mission, the
Center determines the importance of mineral elements at the molecular
level with an emphasis on chronic disease; identifies detrimental
functional changes, especially in bone, brain, cardiovascular and
reproductive systems, that occur in the U.S. population because of
improper mineral element nutriture; identifies and validates
biochemical and physiological status assessment indicators for use in
the study of populations at risk from inadequate mineral element
nutrition; and defines the impact of environmental, dietary,
physiological and psychological stressors on specific mineral
requirements.
Children's Nutrition Research Center at Baylor College of Medicine,
Houston, Texas.--Defines the nutritional needs of pregnant and
lactating women and of their infants and children from conception
through adolescence. To accomplish this mission, the Center establishes
nutrient requirements to prevent low birth weight babies, particularly
in pregnant adolescents; elucidates nutrient-gene interactions that
regulate metabolism and disposition of nutrients; determines nutrient
requirements for growth and development of school-aged and adolescent
children; and establishes nutritional relationships to acute and
chronic childhood diseases.
Western Human Nutrition Research Center, San Francisco,
California.--Determines the impacts of dietary, environmental,
behavioral, and genetic factors on nutrient requirements and functions.
To accomplish this mission, the Center establishes markers of
nutritional status in relation to maintenance of healthy body weight,
nutrition, infection and immune disorders; and protective factors in
foods.
Arkansas Children's Nutrition Research Center, Little Rock,
Arkansas.--Determines the role of nutrition in cognitive and behavioral
function, and the health consequences of infant consumption of dietary
factors (phytochemicals) such as phytoestrogens on endocrine and
metabolic development and prevention of chronic diseases.
Question. Provide existing resources, both funding and staff years,
for each center. Provide the resources planned for each.
Answer. The funding and scientific staffing for the ARS Human
Nutrition Research Centers and other related programs for fiscal year
1997 and fiscal year 1998 are as follows:
------------------------------------------------------------------------
Fiscal year 1997
Centers and other related --------------------------- Fiscal year
programs Funding Staffing 1998 funding
------------------------------------------------------------------------
Beltsville Human Nutrition
Research Center, Beltsville,
MD.......................... $18,499,900 43 $19,499,900
Grand Forks Human Nutrition
Research Center, Grand
Forks, ND................... 7,999,700 12 8,999,700
Human Nutrition Research
Center on Aging at Tufts.... 14,747,900 42 15,747,900
University, Boston, MA
(Includes Geriatric
Nutrition Research,
Danville, PA)............... (188,000) ......... (188,000)
Children's Nutrition Research
Center at Baylor College of
Medicine, Houston, TX....... 10,756,600 26 11,756,600
Western Human Nutrition
Research Center, San
Francisco, CA............... 5,317,600 12 6,317,600
Arkansas Children' Nutrition
Research Center, Little
Rock, Arkansas.............. 1,878,800 5 2,878,800
Lower Mississippi Delta
Intervention Research
Initiative (LA, AR, MS)..... 3,166,900 16 3,166,900
National Agricultural Library 693,400 7 693,400
Headquarters................. .............. ......... 6,000,000
Other Locations.............. 1,075,600 5 1,089,600
------------------------------------------
Totals................. 64,136,400 168 76,150,400
------------------------------------------------------------------------
Of the total staff of 168, 85 are Federal FTE and 83 are cooperator
employees.
Question. There appears to be significant overlap in the research
carried out at the nutrition centers. Can the resources of these
centers be combined? Explain.
Answer. Each of the described missions of the USDA/ARS Human
Nutrition Research Centers are distinct and unique. It would be
difficult, if not impossible, to combine resources at these Centers
because of the different populations and nutrients studied and
approaches used at each that require specific types of skills,
equipment, and facilities. To best use their limited resources, the six
USDA/ARS Human Nutrition Research Center Directors meet regularly with
the National Program Staff for Human Nutrition Research in ARS to
assure that there is no overlap in research programs and that critical
and high impact research is carried out at the Center with the
appropriate staff, equipment and facilities. A specific research
problem such as the cause of a certain nutritional disorder, or the
assessment or alleviation of a nutritional problem, may require study
at more than one Center because of the specific resources and expertise
available in each.
Question. How do you integrate human nutrition research with the
agricultural mission of your agency?
Answer. Knowledge about health-promoting foods and components of
foods is used by animal, plant, soil, and post-harvest scientists for
development of methods that modify food composition both during
production and processing, expand food choices, and provide more
options for healthful diets. Examples of nutritional input to the
agriculture include:
--Production of meat with less fat.
--Development of grains with more healthful fatty acid profiles and
with increased content of health promoting vitamins and
minerals.
--Development of fruits and vegetables with increased content of
beneficial phytochemicals such as vitamin C and carotene--a
precursor of vitamin A.
--Identification of components of a healthful diet high in
phytonutrients and antioxidant substances.
Nutrition research results can counteract some of the claimed
negative attributes for some nutritious foods such as meat, milk, and
eggs which have affected the market for these products.
remote sensing
Question. What remote sensing research are you pursuing?
Answer. ARS research on the development of remote sensing
technologies that can benefit agricultural production, resource
management, and the environment is conducted at the following
locations: Phoenix, Arizona; Tucson, Arizona; Shafter, California; Fort
Collins, Colorado; Beltsville, Maryland; El Reno, Oklahoma; University
Park, Pennsylvania; and Weslaco, Texas.
Phoenix, Arizona.--Research is focused on four main areas:
development of satellite-based remote sensing for assessing large-area
evapotranspiration rates over croplands and rangelands to assess plant
vigor, soil moisture conditions, and biomass production; development of
decision support tools for farm managers using both on-site
measurements of physical and biological conditions, and geospatial
information provided by sensors mounted on farm equipment and aircraft;
use of hand-held radiometers for non-destructive estimation of light
and water use efficiencies by agricultural crops and native plant
communities; and improvement of basic sensor design, use, and image
quality.
Tucson, Arizona.--Research is targeted toward the scientific and
inventory needs of the SALSA (Semi-Arid Land-Surface Atmosphere)
project. The primary goal of this multi-year, multi-disciplinary
project, involving several agencies and research institutions, is to
understand, model, and predict the consequences of natural and human-
induced changes on the basin-wide water balance and ecological
diversity of semi-arid regions at storm event, seasonal, interannual,
and decadal time-scales using the San Pedro River Basin. Remotely
sensed data will be used to determine the rates of evapotranspiration
from key landscape features, such as riparian corridors, and to
quantify long-term changes in vegetation for both the U.S. and Mexican
components of this river basin.
Shafter, California.--Remote sensing activities are directed toward
the development and validation of precision farming practices which
would provide economic benefits to California cotton growers and the
industry, and environmental benefits to rural communities. Detailed
ground-based radiometer measurements are being used to develop spectral
signatures for detecting insects, mites, nematodes, and diseases with
the aid of high-resolution imagery. An aircraft-based, multi-spectral
remote sensing system is being developed for scouting early stages of
pest infestations in cotton fields. Procedures for incorporating this
remotely-sensed information into ARS cotton production models will
extend their crop and farm management capabilities.
Fort Collins, Colorado.--Research is aimed at assessing the
potential for using readily available soil survey information and
passive microwave reflectance imagery to map the subsurface hydraulic
properties of agricultural soils. The methodology will be validated
using data from the intensively instrumented ARS watershed on the
Little Washita River in central Oklahoma. The productivity, economic,
and environmental benefits of incorporating remotely sensed data in
farm-level decision support models are also being evaluated using data
from two farms in eastern Colorado.
Beltsville, Maryland.--The Remote Sensing and Modeling Laboratory
is evaluating the potential for using actively induced fluorescence to
determine vegetation condition, retrieve important biophysical
parameters, and estimate large-area crop yields. Laser induced
fluorescence techniques are being used to determine changes in leaf
photosynthesis, and measure water and nutrient stresses. Remotely
sensed biophysical parameters, such as leaf area index, are being used
with process-based crop models to assess changes in crop condition and
predict crop yields at regional scales. Research on the use of spectral
imagery from satellite-based sensors for improving reliability and
performance in precision farming is also being pursued.
The Hydrology Laboratory at Beltsville, Maryland is conducting
research on remote sensing applications to water resources management
and agriculture. Techniques are being developed to use existing and
future satellite-based sensors, with wavelengths in the visible to
microwave bands, for mapping water, energy, and biogeochemical fluxes
over large areas. These techniques will provide resource management
agencies with practical and cost-effective methods for monitoring
environmental conditions. Techniques for measuring the water equivalent
of snow cover are being developed and tested in several western U.S.
basins. ARS is collaborating with the National Aeronautics and Space
Administration in the development of practical technologies for mapping
surface soil moisture over large areas using microwave imagery to
improve both hydrologic and climate forecasts, and agricultural
management decisions. Airborne laser altimeter data is being used to
measure topography, gully and stream cross-sections, vegetative cover,
and other landscape features for large areas. These measurements have
the potential to improve estimates of soil losses from agricultural
landscapes and promote more effective management of the nation's water
resources.
El Reno, Oklahoma.--Remote sensing research is directed toward
using digital elevation data and imagery from satellite-and aircraft-
based sensors to characterize diverse agricultural landscapes at
watershed and river basin scales. Hydrologic and geomorphic analyses of
vital landscape features, such as topography, channel networks,
subdrainage boundaries, and flow paths are being extracted from the
digital elevation data. Spatial distributions of suspended sediment and
chlorophyll contaminants in surface water bodies are being estimated
from low-level, hyperspectral sensor platforms. Soil moisture and
biophysical properties of vegetation, such as leaf area index, are
being mapped using remotely sensed data from aircraft-based sensors.
Future research will include the use of aircraft-and satellite-based
sensors to provide estimates of forage quantity and quality over large
areas.
University Park, Pennsylvania.--Remote sensing research is directed
toward using aircraft-and satellite-based sensors to evaluate spatial
and temporal changes in surface soil moisture over northeastern
landscapes. This information will be used to establish the reliability
and performance of soil water balance, and natural resource management
models that incorporate both the temporal and spatial variability of
the hydraulic properties of soils in agricultural landscapes. The
National Aeronautics and Space Administration and Pennsylvania State
University are collaborating in the work.
Weslaco, Texas.--Remote sensing research includes: development of
near real-time sensors to identify, quantify, and analyze biological
and soil variables; data integration from remote sensing, geographic
information systems, and global positioning systems into technologies
for agricultural and resource management; methodologies for using
sensor imagery in developing site-specific strategies for crop and
pasture land management; and the transfer of spatial information
systems and technologies to public agencies and the private sector.
This work is collaborative with several academic institutions, State
and Federal agencies, and private companies. For example, ARS
researchers, the Animal Plant Health Inspection Service, farmers, and
crop insurance representatives are cooperating in the development of
spatial management systems for monitoring and responding to the impact
of Mexican fruit flies on citrus production in Texas. In April 1997,
the location hosted the 16th Biennial Workshop on Color Photography and
Videography with participants from several companies and 16 foreign and
domestic research institutions.
Question. Please list funding and staff years by location.
Answer. Funding and scientists by location for fiscal year 1997 are
as follows:
------------------------------------------------------------------------
Location Funding Scientists
------------------------------------------------------------------------
Phoenix, AZ................................. $327,300 1.2
Tucson, AZ.................................. 88,600 0.3
Shafter, CA................................. 115,400 .4
Ft. Collins, CO............................. 26,100 .1
Beltsville, MD.............................. 2,236,500 8.4
El Reno, OK................................. 599,600 2.0
University Park, PA......................... 38,400 .1
Weslaco, TX................................. 1,042,700 1.8
---------------------------
Total................................. 4,474,600 14.3
------------------------------------------------------------------------
Question. What is your justification for proposing the elimination
of the ``Remote Sensing Technologies for Crop Production'' project?
Answer. This Cooperative Research Project, which was established by
Congressional Directive in 1989, was targeted toward stimulating
private sector interest in agricultural applications of imagery from
satellite-and aircraft-based sensors, and expanding the use of ARS
developments of Remote Sensing Research by resource managers and food
and fiber producers. In recent years, there has been substantial growth
in the private sector's interest in applying remote sensing
technologies to both resource management and food and fiber production
therefore reducing the need for this project. Because of pressures on
the ARS budget, several current activities, including this project,
must be terminated to support new budget initiatives. Every effort will
be made to insure that the desired inter-action between ARS remote
sensing specialists, public sector resource management agencies, and
industry will continue to be promoted through other remote sensing
initiatives.
hazardous waste clean-up (hwc)
Question. Please list the funds obligated by location for hazardous
wastes projects for fiscal year 1996 and planned for fiscal year 1997.
Answer. The funds obligated by location for hazardous waste
projects for fiscal year 1996 and planned for fiscal year 1997 are as
follows:
Fiscal year 1996 funded projects
Athens, GA.................................................... $7,500
Savannah, GA.................................................. 375,000
Ames, IA...................................................... 243,863
Peoria, IL.................................................... 63,100
Beltsville, MD................................................ 2,662,103
Greenport, NY................................................. 524,569
El Reno, OK................................................... 70,000
Mayaguez, PR.................................................. 12,000
Weslaco, TX................................................... 35,775
St. Croix, VI................................................. 48,890
Madison, WI................................................... 37,200
--------------------------------------------------------------
____________________________________________________
Total................................................... 4,080,000
Fiscal year 1997 planned projects
Shafter, CA................................................... $50,000
Washington, DC................................................ 100,000
Savannah, GA.................................................. 100,000
Ames, IA...................................................... 20,000
Peoria, IL.................................................... 50,000
West Lafayette, IN............................................ 50,000
Beltsville, MD................................................ 2,658,000
East Lansing, MI.............................................. 116,000
Greenport, NY................................................. 1,030,000
Coshocton, OH................................................. 150,000
Weslaco, TX................................................... 15,000
Temple, TX.................................................... 36,000
Madison, WI................................................... 25,000
--------------------------------------------------------------
____________________________________________________
Total................................................... 4,400,000
Question. Provide amounts and brief description of each project
funded from both Agency funds and departmental HWC funds.
Answer. The amounts and a brief description of each project funded
from both Agency funds and departmental HWC funds for fiscal year 1996
and planned for fiscal year 1997 are as follows:
Fiscal year 1996 Agency Funded Projects:
Athens, GA: Underground Storage Tank Removal/Replacement.. $7,500
Beltsville, MD:
Remedial Investigation/ Feasibility Study at National
Priorities List Sites............................... 1,400,191
Removal Actions at National Priorities List Sites..... 436,850
Greenport, NY:
RCRA Site Closure Activities.......................... 360,017
Petroleum Contamination Cleanup....................... 164,552
El Reno, OK: Environmental Site Assessment Phase II/
Sampling................................................ 70,000
Mayaguez, PR: Underground Storage Tank Removal/Replacement 12,000
St. Croix, VI: Underground Storage Tanks Removals/
Replacements............................................ 48,890
--------------------------------------------------------------
____________________________________________________
Subtotal.............................................. 2,500,000
==============================================================
____________________________________________________
Fiscal year 1996 HWC Funded Projects:
Savannah, GA: RCRA Sampling and Remedial Actions.......... 375,000
Beltsville, MD:
Biodegradable Site Cleanup............................ 574,606
Remedial Investigation/ Feasibility Study at National
Priorities List Sites............................... 14,837
Underground Storage Tanks Removals/Replacements....... 235,619
Ames, IA: Underground Storage Tanks Removals/Replacements. 243,863
Peoria, IL: Sampling and Remedial Actions..................... 63,100
Weslaco, TX:
Investigate Acid Neutralization Tank.................. 7,225
Investigate Tractor Rinse Station..................... 16,025
Upgrade Pesticide Rinsewater Underground Storage Tank. 12,525
Madison, WI: Underground Storage Tanks Removals/
Replacements............................................ 37,200
--------------------------------------------------------------
____________________________________________________
Subtotal.............................................. 1,580,000
==============================================================
____________________________________________________
Total................................................. 4,080,000
Fiscal year 1997 Agency Planned Projects
In fiscal year 1997, it is anticipated that all critical hazardous
waste cleanup requirements will be funded via the departmental HWC
central account.
Fiscal year 1997 HWC Planned Projects:
Shafter, CA: Drywell Remediation.......................... $50,000
Washington, DC: Legal Support, Office of General Counsel.. 100,000
Savannah, GA: RCRA Sampling and Remedial Actions.......... 100,000
Ames, IA: Underground Storage Tanks/Remedial Actions...... 20,000
Peoria, IL: Sampling and Remedial Actions................. 50,000
West Lafayette, IN: Underground Storage Tanks Removals/
Replace- ments.......................................... 50,000
Beltsville, MD:
Remedial Investigation/Feasibility Study at National
Priorities List Sites............................... 1,408,000
Removal Actions at National Priorities List Sites..... 1,000,000
Underground Storage Tanks Removals/Replacements....... 250,000
East Lansing, MI:
Site Investigation/Additional Sampling................ 50,000
Underground Storage Tank Removal/Replacement.......... 66,000
Greenport, NY:
RCRA Site Closure Activities.......................... 600,000
Removal Actions at Various Sites...................... 400,000
Underground Storage Tank Removal/Replacement.......... 30,000
Coshocton, OH: Underground Storage Tanks Removals/
Replacements............................................ 150,000
Weslaco, TX: Underground Storage Tank/Remedial Actions.... 15,000
Temple, TX: Site Assessment and Remedial Actions.......... 36,000
Madison, WI: Underground Storage Tanks/Remedial Actions... 25,000
--------------------------------------------------------------
____________________________________________________
Total................................................. 4,400,000
Question. Please provide a listing of ARS locations where
environmental clean-up activities are planned in fiscal years 1997 and
1998.
Answer. A listing of ARS locations where environmental clean-up
activities are planned in fiscal years 1997 and 1998 is provided below:
Shafter, CA
Savannah, GA
Ames, IA
Peoria, IL
West Lafayette, IN
Beltsville, MD
East Lansing, MI
Greenport, NY
Coshocton, OH
El Reno, OK
Wyndmoor, PA
Brownwood, TX
Temple, TX
Weslaco, TX
Madison, WI
Question. Describe the nature of the work and the estimated cost
for each site.
Answer. A description of the nature of the work and the estimated
cost for each planned site in fiscal years 1997 and 1998 is provided
below. The costs have been estimated using fiscal year 1996 cost data
and remediation information. The estimates are subject to increases/
decreases as the project requirements become better defined through
investigative and planning activities.
Shafter, CA: Drywell Remediation.............................. $75,000
Savannah, GA: RCRA Sampling and Remedial Actions.............. 220,000
Ames, IA:
Underground Storage Tanks/Remedial Actions................ 20,000
Site Investigation/Additional Sampling.................... 30,000
Peoria, IL:
Sampling and Remedial Actions............................. 80,000
Underground Storage Tanks Removals/Replacements........... 225,000
West Lafayette, IN: Underground Storage Tanks Removals/
Replace- ments............................................ 50,000
Beltsville, MD:
Remedial Investigation/Feasibility Study at National
Priorities List Sites................................... 3,008,000
Removal Actions at National Priorities List Sites......... 1,750,000
Underground Storage Tanks Removals/Replacements........... 500,000
East Lansing, MI:
Site Investigation/Additional Sampling.................... 50,000
Underground Storage Tank Removal/Replacement.............. 66,000
Greenport, NY:
RCRA Site Closure Activities.............................. 1,100,000
Removal Actions at Various Sites.......................... 400,000
Remedial Investigation/ Feasibility Study................. 800,000
Underground Storage Tank Removal/Replacement.............. 30,000
Coshocton, OH: Underground Storage Tanks Removals/Replacements 150,000
El Reno, OK: Site Assessment and Remedial Actions............. 50,000
Wyndmoor, PA: Underground Storage Tank Removal/Replacement.... 40,000
Brownwood, TX: Site Assessment and Remedial Actions........... 75,000
Temple, TX: Site Assessment and Remedial Actions.............. 86,000
Weslaco, TX: Underground Storage Tank/Remedial Actions........ 15,000
Madison, WI: Underground Storage Tanks/Remedial Actions....... 25,000
--------------------------------------------------------------
____________________________________________________
Total................................................... 8,845,000
Question. What is your estimate of costs, by location, through
fiscal year 2002.
Answer. The estimated cost for each location for fiscal year 1998
through fiscal year 2002 is provided below:
Shafter, CA................................................... $25,000
Savannah, GA.................................................. 250,000
Ames, IA...................................................... 30,000
Peoria, IL.................................................... 305,000
Beltsville, MD................................................15,300,000
East Lansing, MI.............................................. 30,000
Clay Center, NE............................................... 300,000
Greenport, NY................................................. 7,600,000
El Reno, OK................................................... 75,000
Wyndmoor, PA.................................................. 40,000
Kearneysville, WV............................................. 75,000
Temple, TX.................................................... 150,000
Brownwood, TX................................................. 75,000
--------------------------------------------------------------
____________________________________________________
Total...................................................24,255,000
travel
Question. Please provide the Committee with a breakdown of your
actual travel costs in fiscal year 1996.
Answer. fiscal year 1996 travel costs are as follows:
Common Carrier................................................$5,041,459
Mileage Allowance............................................. 431,794
Per Diem Allowance............................................ 3,557,071
Actual Subsistence............................................ 1,706,823
Transfer of Station........................................... 1,005,306
Vehicular Transportation...................................... 361,656
Miscellaneous Travel Expenses................................. 499,889
--------------------------------------------------------------
____________________________________________________
Total...................................................12,603,998
Question. Please identify foreign travel obligations for fiscal
years 1994, 1995, and 1996, and estimates for fiscal year 1997.
Answer. Foreign travel obligations for fiscal years 1994, 1995, and
1996, and estimates for fiscal year 1997 are as follows:
Fiscal year
1994..........................................................$2,030,978
1995.......................................................... 1,654,038
1996.......................................................... 2,012,667
1997 est...................................................... 1,516,300
Question. How many ARS personnel were engaged in foreign trips in
these years and for what purposes?
Answer. The number of employees performing foreign trips for these
years is as follows: 1,363 in fiscal year 1994; 1,226 in fiscal year
1995; 995 in fiscal year 1996; and 654 estimated for fiscal year 1997.
The majority of foreign travel was to present scientific findings
at international conferences, collaborate and review research at
international organizations, and collect germplasm and biological
control organisms in foreign countries.
management costs
Question. How much will ARS expend for Headquarters management
costs in fiscal year 1997?
Answer. ARS will expend approximately $56.1 million for
Headquarters management costs in fiscal year 1997.
Question. How does this correspond to your 10 percent program
assessment?
Answer. The $56.1 million expenditure excludes field management
costs for the Area Administrative Offices and Area Directors of $15.1
million. The combination of these two costs correspond to the Agency's
overhead program assessment.
Question. Please list your management and FTE's by function e.g.,
Personnel, Contracting, Accounting etc., and location for fiscal year
1995 and estimated fiscal year 1996.
Answer.
WASHINGTON, DC, AREA
----------------------------------------------------------------------------------------------------------------
Fiscal year 1995 Fiscal year 1996
-----------------------------------------------------
Function Staff Staff
Funding years Funding years
----------------------------------------------------------------------------------------------------------------
Management................................................ $34,310,496 249.1 $36,805,495 250.5
Personnel................................................. 7,201,650 156.0 7,841,923 150.6
Financial................................................. 1,755,386 29.9 2,069,577 37.2
Contracts................................................. 1,911,486 44.4 2,265,562 42.2
Facilities................................................ 3,102,685 59.8 2,831,847 42.8
Computer.................................................. 2,944,041 34.4 3,088,864 52.8
-----------------------------------------------------
Total............................................... 51,225,744 573.6 54,903,268 576.1
----------------------------------------------------------------------------------------------------------------
OUTSIDE WASHINGTON, DC, AREA
----------------------------------------------------------------------------------------------------------------
Fiscal year 1995 Fiscal year 1996
-----------------------------------------------------
Function Staff Staff
Funding years Funding years
----------------------------------------------------------------------------------------------------------------
Management................................................ $4,499,899 51.0 $4,033,814 48.0
Personnel................................................. 838,224 16.0 770,116 15.6
Financial................................................. 2,691,991 52.1 2,473,262 50.1
Contracts................................................. 5,365,175 99.8 4,929,245 97.8
Facilities................................................ 1,939,738 38.9 1,782,131 36.1
Computer.................................................. 1,023,601 17.9 940,432 19.1
-----------------------------------------------------
Total............................................... 16,358,628 275.7 14,929,000 266.7
----------------------------------------------------------------------------------------------------------------
Question. What are your projected management costs and FTE's for
fiscal year 1997?
Answer.
WASHINGTON, DC, AREA
------------------------------------------------------------------------
Staff
Function Funding years
------------------------------------------------------------------------
Management................................... $36,214,716 239.4
Personnel.................................... 8,400,016 150.5
Financial.................................... 1,822,538 30.5
Contracts.................................... 2,224,765 36.7
Facilities................................... 4,104,630 55.9
Computer..................................... 3,363,581 48.6
--------------------------
Total.................................. 56,130,246 561.6
------------------------------------------------------------------------
OUTSIDE WASHINGTON, DC, AREA
------------------------------------------------------------------------
Staff
Function Funding years
------------------------------------------------------------------------
Management................................... $4,087,600 48.3
Personnel.................................... 598,163 15.0
Financial.................................... 2,580,371 53.2
Contracts.................................... 3,653,333 78.2
Facilities................................... 2,876,769 43.5
Computer..................................... 1,361,564 24.1
--------------------------
Total.................................. $15,157,800 261.8
------------------------------------------------------------------------
According to your responses to Committee questions last year, ARS
planned to spend $69,833,000 for management costs in 1996 and 1997--
about 10 per cent.
Question. ARS proposes to reduce headquarters management by
$550,000 in 1998. This amounts to 2 per cent of the ARS proposed
reductions of $23 million in 1998. It appears that research is being
reduced at a much greater rate than management. What is your rationale?
Answer. The Agency had, in the past, received reductions in its
administrative overhead activities. These administrative savings were,
however, offset by corresponding increases for pay and inflation costs
thereby eliminating the need for showing actual reductions in these
activities. In the fiscal year 1998 Budget, the Agency proposed more
specific reductions for administrative activities carried out at
Headquarters with follow up reductions in fiscal year 1999 for both
Headquarters and field administrative activities. This action is in
line with the Agency's policy to reverse the continuing reduction in
its scientific force by protecting research related dollars at every
opportunity.
Question. According to your response last year, ARS reported as a
result of REE management reorganization effective April 30, 1995,
combining resources of ARS, CSREES, ERS, and NASS, of over 460 FTE's,
you achieved savings of only 3.7 FTE's. This is a negligible savings.
Please explain this result.
Answer. The limited savings in FTE were due to a commitment to
place all administrative and financial management staff in the new
organization.
Question. A major reason for reorganization was to achieve savings
in costs and FTE's. By Agency and in total dollar resources, how much
money was allocated for management services before the reorganization
and subsequently allocated by them.
Answer. The following table reflects the resources allocated to
management services before and after the reorganization by Agency:
[Dollars in thousands]
------------------------------------------------------------------------
Before After
------------------------------------------------------------------------
ARS..................................... $20,272.3 $19,999.4
ERS..................................... 3,306.5 2,783.7
NASS.................................... 3,306.5 3,200.1
CSREES.................................. 2,223.1 2,972.9
-------------------------------
Total............................. 29,108.4 28,956.1
------------------------------------------------------------------------
Question. How much money has been saved through this reorganization
effort?
Answer. We achieved savings of $152,300 through this
reorganization.
Question. How will ARS implement its $550,000 Headquarters
reductions in fiscal year 1998?
Answer. The reduction of $550,000 in management costs in fiscal
year 1998 is tentatively planned to be applied proportionally to the
ARS Headquarters program and administrative support staffs.
Question. How will it achieve proposed management reductions in
fiscal year 1999?
Answer. Alternatives to achieve efficiencies in Headquarters and in
the field management activities are currently under review and
assessment by the Agency leadership.
panama city
Question. ARS Explanatory Notes indicates $898,300 and 4 FTE's
located at Panama City, Panama. Describe the programs carried out at
this location.
Answer. ARS screwworm research is carried out in Panama City. This
program is focused on three principal activities in support of APHIS
and FAO screwworm eradication efforts in Central America and the
Caribbean region respectively. These include: characterization of
screwworm habitats in Panama using remote sensing technology;
improvement of screwworm surveillance, trapping and monitoring methods
which includes development of an ``Artificial Wound'' technology for
survey and trapping of feral screwworm populations; and conducting
studies on ecology, biology and population dynamics of screwworm
populations in the Caribbean region.
montpellier, france
Question. The ARS Montpellier, France location estimates a program
level of $1,728,700. Please describe the program carried out here.
Answer. United States agriculture is subjected to a constant
invasion of foreign insect and weed pests which gain entry through
human immigration and accelerated agricultural trade of diverse
commodities. Many of these foreign insect and weed pests enter the
United States without any of the natural enemies which keep them at
nondamaging levels in their native lands. To combat this threat to U.S.
agriculture, forestry, and the environment, the USDA-ARS laboratory in
France was established in 1919 to collect and evaluate beneficial
natural enemies for eventual import to the U.S. The USDA-ARS
laboratory, although located in France, serves as an extension of the
ARS domestic program in biological control of invasive insects and
weeds. Operationally, the laboratory staff searches for natural enemies
of pests in appropriate areas of origin ranging from Europe, Central
Asia, and Africa. In cooperation with scientists and quarantine
officials in the United States, the ARS staff in France conducts
carefully planned tests of natural enemies to ensure that they are safe
to U.S. agriculture according to established quarantine procedures. The
USDA-ARS laboratory in France provides about 70 percent of all
biological control organisms to researchers and cooperators in the
United States.
Question. What is the SY capacity of the proposed laboratory? Do
you have funds to operate the proposed laboratory at capacity?
Answer. The proposed laboratory is architecturally designed to
accommodate the current staff of three ARS scientists which includes
one vacancy. The laboratory also will accommodate visiting U.S.
scientists, cooperators from U.S. action and regulatory groups, as well
as cooperators from foreign research institutions. With present funding
levels of $1,728,700, the research program is adequately funded to
operate the laboratory at its full capacity and to accommodate
successive TDY visitors of state-side cooperators.
Question. What is the total cost of this laboratory?
Answer. At present, the USDA-ARS laboratory in France is housed in
facilities leased from French institutions. To establish the laboratory
in Montpellier, two hectares of land were purchased by USDA in 1993 and
an architectural design was completed in 1995. The total cost for
construction of the permanent facility, at the prevailing Franc/Dollar
exchange rate, is $3.7 million, of which $.3 million of the necessary
funding will come from anticipated French financial assistance toward
USDA-ARS implantation in Montpellier.
Question. What kind of lease cost comparison has the Agency
completed in determining the need for another U.S. laboratory in
France?
Answer. The Agency is proposing that a permanent laboratory
facility be constructed to relocate present research activities from
temporary leased facilities at a savings to U.S. taxpayers. The current
short term lease cost is $197,000 annually including operation and
maintenance costs. The facilities being leased are temporary
laboratories with minimal quarantine and office space, and inadequate
safety features that do not meet the Agency's minimum facility
requirements. The proposed new laboratory facility after construction
will cost $130,000 annually to operate and maintain. The proposed
facility is necessary to provide adequate laboratory and quarantine
space which would otherwise be more costly to lease.
Question. What is the long-term plan for biocontrol research
activities in France?
Answer. This USDA laboratory in France has been utilized for 78
years by ARS scientists and state-side cooperators to provide
biocontrol agents for immigrant insect and weed pests and thus to
protect U.S. Agriculture. As foreign pests continually enter the United
States, this ARS laboratory will be a key element for the foreseeable
future in the USDA biological control strategy for the long term well-
being of U.S. agriculture.
foreign locations
montpellier, france
Question. Your request for construction is $3.4 million in the 1998
budget. If the Congress provides these funds, will this be sufficient
to meet your program requirements?
Answer. The total fiscal year 1998 appropriation need of $3.4
million for the new USDA-ARS laboratory in France will be sufficient to
meet program needs. It is expected that French subventions totaling
$300,000 will be made available in view of the overall project cost of
$3.7 million.
Question. Does the Agency have plans to add or expand laboratory
and related facilities?
Answer. The new USDA-ARS laboratory in France will provide 850
gross square meters of office, laboratory, and headhouse/greenhouse
space to operate in an efficient and effective manner. While the Agency
has no plans to add to the facilities, the project, as designed has the
capability of being expanded in out years if future domestic pest
problems were to require an accelerated program for discovery and
evaluation of beneficial biological control organisms.
buenos aires, argentina
Question. ARS is also located at Buenos Aires, Argentina. Describe
the program carried out here.
Answer. The Buenos Aires location primarily serves as a support
facility for insect and weed control programs significant to the United
States. The primary scientific area of emphasis is the biological
control of exotic insect and weed pests from South America. Several
weed species common to Florida and the American Southwest have their
source of origin in Patagonia, the Pampas, or the tropical regions of
Brazil and the tropical Parana River Basin of Brazil, Argentina and
Paraguay.
Among the primary target insect species are fire ants, corn
rootworm, corn earworm and sweet potato/silverleaf whitefly. Among the
economically important weeds are water hyacinth, tropical soda apple,
snakeweed, itchgrass and hydrilla.
In addition to funding support from participating ARS laboratories
in the U.S., particularly Gainesville, Florida, the ARS Buenos Aires
Laboratory (SABCL) maintains cooperative relationships with the
University of Arkansas, the Army Corps of Engineers, South Florida
Water Management District, APHIS (USDA), and international research
institutions.
Question. List accomplishments resulting from the work at this
location.
Answer. Currently, fire ant is the primary Target insect of the ARS
Buenos Aires research program (SABCL). Promising beneficial parasitic
wasps and pathogens of the ant have been discovered by SABCL personnel
in Central Brazil. A parasitic wasp has been identified and evaluated
under quarantine conditions and is in the final stage of clearance for
field release in Florida.
Increasingly, water hyacinth, an exotic weed introduced from the
Parana Basin of Brazil, has created major water management problems in
the Gulf States and Florida. Similar infestations in Africa have gained
major international attention. In March 1997, the World Bank hosted an
international Water Hyacinth Conference in Washington, D.C. As a
consequence of these proceedings, SABCL, in cooperation with other
Federal agencies, universities and research institutions will be
involved in a coordinated effort to attack this problem. SABCL, with a
permanent institutional base at the source of origin of hyacinth, is
ideally situated to take the lead in exploratory activities designed
for biological control. Several herbivorous beetles have been collected
and are now under evaluation for use as biological control agents in
the U.S.
buildings and facilities
Question. Please provide the Committee with costs and projects
completed and planned for the modernization of each of ARS' Regional
Research Centers.
Answer. The Department has established a Facility Task Force to
investigate the utilization of Agricultural research facilities.
Pending the results of this Task Force, the status of modernization
efforts at the four Regional Research Centers is as follows:
Southern Regional Research Center (SRRC).--The SRRC Modernization
involved a complete renovation of the surrounding site and Chemical
Wing and included such items as asbestos abatement, new and upgraded
drainage, landscaping, equipment pads, pavement repairs, retaining
walls, and handicapped ramps. Work to the interior of the building will
include replacement of HVAC systems, reconfiguring each laboratory
module, new stairwell to comply with safety codes, replacement of floor
finishes, new windows and complete patched, primed, and painted walls
and ceilings as necessary. Total cost is estimated at $17.8 million,
phased over 9 years.
The design of the Chemical Wing project is complete. Construction
for Phase I was awarded in fiscal year 1991 for $1.4 million. Phase II
was awarded in fiscal year 1992 for $2.4 million using Agency funds.
Phases III, IV, and V were awarded in fiscal year 1992 for $5 million.
(In fiscal year 1992, $1,950,000 was specifically appropriated for
Phase II. However, this budget line item amount was not sufficient to
pay the cost of Phase II which totals $2.7 million for construction,
contingency, and architect-engineer inspection services. The $1,950,000
was used to award Phase V.) In fiscal year 1994, $2.667 million was
appropriated for Phase VI of the Chemical Wing and in fiscal year 1995,
$2.934 million was appropriated for construction of Phase VII. These
phases were awarded in fiscal year 1996. Design and construction of
Phase I site repair work was funded using $1,651,000 in fiscal year
1993 appropriations. The fiscal year 1996 appropriation of $900,000 was
used to award Phase 2 of the site repair work.
The remaining elements of SRRC that need to be modernized are the
Administration Wing, Textile Wing, and the Industrial Wing. It is
estimated the completion of the SRRC modernization program will require
an additional $22.65 million.
Eastern Regional Research Center (ERRC).--In fiscal year 1993, ARS
completed the facility modernization study begun in fiscal year 1992.
The findings indicate that the utilities and building infrastructures
have reached the end of their useful lives, and the facility itself has
been overtaken by the evolution of codes, Agency criteria, and research
needs over the past 50 years.
The proposed modernization program will occur in 9 phases with a
total planning, design, and construction budget of $39 million over 9
years.
In fiscal year 1994, ARS funded design of Phase I (Service
Building) and Phase II (Engineering Research Laboratory in Pilot Plant)
with $595,000 in Repair and Maintenance funds. In fiscal year 1995, ARS
funded construction of Phase I, and design of Phases III through VII,
using $4,175,000 in Repair and Maintenance funds. In fiscal year 1996,
ARS funded construction of Phase II using $4,100,000 in Repair and
Maintenance funds. In fiscal year 1997, $4,700,000 was needed to fund
construction of Phase III, and $4 million was appropriated.
In fiscal year 1988, $5,2000,000 is needed to complete funding of
Phase III and fund construction of Phase IV leaving a balance of
$20,851,000 to complete modernization. This additional modernization
need will be met with a combination of Repair and Maintenance and
Building and Facility funds.
Western Regional Research Center (WRRC):
1. WRRC modernization includes the upgrade of outside utilities and
complete renovation of the North Wing. The renovation includes asbestos
and lead abatement, upgrade of existing HVAC system, laboratory
reconfiguration to comply with safety and accessibility codes,
replacement of all laboratory counters and tops, replacement of floor
and windows, and completely patch, prime, and paint walls and ceilings
as necessary. Total cost is $29.6 million phased over a 7-year period.
2. The design is complete for all phases. Phases I and II were
awarded in fiscal year 1990 for $5.9 million. Phase III was awarded in
fiscal year 1991 in the amount of $3.4 million. Phase IV was awarded in
fiscal year 1993 in the amount of $3.0 million. Phases V and VI were
awarded in fiscal year 1993 in the amount of $4.4 million and $3.2
million. Construction for Phase VI is expected to be complete by the
third quarter of fiscal year 1997.
3. Total construction funds committed to date for 6 phases--$23.5
million.
4. In fiscal year 1997, $6.08 million is available to award Phase
VII construction and A-E support services. In fiscal year 1994, fiscal
year 1995, and fiscal year 1997 $1.161 million, $.919 million, and $4.0
million were appropriated for construction of Phase VII. The Area
funded all necessary fine tuning costs. Construction for Phase VII is
expected to be complete by the fourth quarter of fiscal year 1998.
5. The Small Animal Facility (West Annex Building) planning,
design, and construction is complete for Phase I. Design of Phases II
and III was completed in the third quarter of fiscal year 1994. The
construction of Phases II and III was awarded in the fourth quarter of
fiscal year 1994. Construction was completed in the fourth quarter of
fiscal year 1996. The design and construction costs for all three
phases is approximately $5.0 million.
6. A construction contract was awarded in September 1995 using
Agency funds in the amount of $800,000 to upgrade the building envelope
of the Research and Development Facility (RDF) (Pilot Plant) which
includes Food Processing Laboratory and Industrial Processing
Laboratory. Concurrently, a program of requirements is being developed
using Agency funds, $180,000, for the modernization of RDF. This
facility occupies the south wing of WRRC encompassing approximately
21,000 square feet of space. The estimated design and construction cost
for this project is $15,000,000.
National Center for Agricultural Utilization Research (NCAUR):
1. The National Center for Agricultural Utilization Research is
currently proceeding with a facilities upgrade design and construction
program, as follows:
Phase IA--Utility Tunnel, Steam Lines, and Boiler: Construction
contract was awarded in the fourth quarter of fiscal year 1991.
Construction was completed in the second quarter of fiscal year 1995.
Total project cost of $2.5 million is for construction.
Phase IB--Electrical and Drain System Upgrade: Construction
contract was awarded in the third quarter of fiscal year 1992. Total
cost of $.9 million is for construction. Construction was completed in
the first quarter of fiscal year 1994.
Phase IID--Pilot Plant and Semi-Works Building Upgrades: Total cost
for design is $1,825,000 which was appropriated in fiscal year 1992.
The design for Phase II was awarded in fiscal year 1992 and is
complete.
2. Appropriations to Date: fiscal year 1992--$1,825,000 Planning
and Design for Phase II Pilot Plant; fiscal year 1993--$1,545,000
Planning and Design for Phase III Chemical Wing.
3. In fiscal year 1996 and fiscal year 1997, $3.9 and $1.5 million
has been appropriated instead of $11.7 million requested to implement
modernization efforts. A revised phasing plan was necessary to renovate
the Pilot Plant and Semi-Works Building. A phased renovation plan was
developed in fiscal year 1996 and recommended a three-phase renovation
plan for the North Wing. The initial phase (Segment I of Phase IID)
will renovate four modules of the Pilot Plant, add mechanical rooms and
an exterior stairway. Estimated planning, design, and construction cost
is $5.4 million for this segment. Construction will be awarded in the
fourth quarter of fiscal year 1997.
4. The remaining two segments are: Segment 2 of Phase IID: This
segment will renovate adjoining areas in the North Wing. General
laboratory, support space, and testing facilities will be provided to
support the Pilot Plant modules. The Semi-Works Building will be
renovated to support infrastructure of the Center. Estimated planning,
design, and construction cost of $8.0 million is needed in fiscal year
1998. Segment 3 of Phase IID: This segment will renovate additional
laboratory, support space, and testing facilities will be provided to
support the Pilot Plant modules. Estimated planning, design, and
construction cost is $8.4 million (escalated to 1999).
5. Additional funding needed which has been escalated to the
planned year of implementation is $70.2 million. This will complete
planned modernization efforts at the Center.
Question. Please provide the Committee with an update of the costs
and projects completed and planned for the modernization of the
Beltsville Agricultural Research Center.
Answer. Beltsville Agricultural Research Center (BARC):
Through fiscal year 1997, a total of $103,416,792 has been expended
on the modernization of BARC. The attached is a listing of projects
that have been completed, initiated, or are proposed for fiscal year
1998. The funding source for these projects is the Building and
Facility Modernization funding.
Projects currently underway include the construction of a
Controlled Environment Facility. This will consolidate plant growth
chambers in one building which will reduce staffing needs to monitor
the chambers as well as increase energy efficiency. Construction of the
gut and rebuild of Building 004 (Plant Sciences) is scheduled to begin
in July 1997.
In fiscal year 1998, BARC plans to utilize the limited funding to
upgrade the infrastructure of the Center Road Building Complex Area.
This will prepare the area for the proposed construction of the Human
Nutrition Wing (70,000 square feet), as well as the gut and rebuild of
the existing Human Nutrition Building--Building 308 (69,300 square
feet). Future work in this area includes the gut and rebuild of the
adjacent Buildings 306 and 307; these facilities are needed for
modernization of the Livestock and Poultry Sciences Institute. The
design of the Human Nutrition Wing is scheduled to begin in late fiscal
year 1997, in anticipation of construction funds in fiscal year 1999.
The clustering of animal buildings is another priority of BARC. A
site plan for all animal buildings has been completed. As funds become
available, design and construction will begin. This will ensure that
BARC's animal buildings satisfy all animal care guidelines. In fiscal
year 1998, a new Feed Center will be built near the Dairy Complex. This
will replace the existing out-dated granary facility. In future years,
BARC plans on gutting and rebuilding Building 200 (52,000 square feet)
which is used for research on livestock and poultry-related issues. We
anticipate that the design of a new swine parasitology barn will be
awarded by early fiscal year 1998 with construction scheduled
immediately after the design is complete. The design of two new poultry
barns is also scheduled for award during fiscal year 1998. Funds for
construction of the new poultry buildings will be included in future
budget requests. This will advance the clustering of animal buildings
which is needed for security reasons. Additional infrastructure
upgrades will be needed to support renovated buildings and additional
research facilities on the east side of BARC.
Beltsville Agricultural Research Center (BARC) Modernization--Fiscal
year 1988
Renovate Building 007................................... $2,000,000
Design Building 003..................................... 660,859
Renovate Abattoir, Building 204......................... 57,446
Renovate Building 303................................... 506,877
Modify HVAC, Building 306............................... 372,270
Water Lines............................................. 1,402,195
Miscellaneous Projects, BARC (under $100,000)........... 374,234
Repair Building 307..................................... 88,064
Repair Building 467..................................... 10,835
Repair Building 264..................................... 5,480
Small Animal Facility Contingency....................... 271,740
--------------------------------------------------------
____________________________________________________
Total............................................. 5,750,000
Fiscal year 1989
U.S. National Arboretum Roof Repairs.................... $300,852
U.S. National Arboretum Greenhouse Electrical Repairs... 273,200
Steam Lines, Phase IV................................... 1,100,000
Oil to Gas Conversion................................... 328,237
Renovate Building 203 (Boar Facility)................... 529,026
U.S. National Arboretum, Relocate Service Road.......... 87,643
Hazardous Waste Marshalling Facilities.................. 79,662
Waste Water Treatment Study............................. 194,864
Renovate Building 204................................... 354,335
Beltsville Area Security................................ 91,806
Pesticide Handling Facilities........................... 441,793
Swing Space............................................. 274,100
Miscellaneous Projects.................................. 44,482
USNA Brickyard.......................................... 2,000,000
--------------------------------------------------------
____________________________________________________
Total............................................. 6,100,000
Fiscal year 1990
Steam Lines, Building 169-179........................... $568,752
Steam Lines, Buildings 001-011A......................... 1,407,084
Range 2 Modernization................................... 690,574
Waste Water Treatment Facility.......................... 1,100,056
Electrical Distribution System.......................... 574,157
BARC Roads.............................................. 361,027
Animal Parasitology Unit Planning....................... 30,282
HVAC System, Building 050............................... 44,598
Repair Embankment Failure............................... 211,135
Powder Mill Road........................................ 1,547,588
Swing Space............................................. 103,685
Brooder House........................................... 230,000
Renovate Building 043, 046, 047......................... 148,591
Annual Painting......................................... 200,098
Annual Roofing.......................................... 247,582
U.S. National Arboretum Storage Building................ 90,402
U.S. National Arboretum Plastic Greenhouses (3)......... 235,687
Demolition of Facilities................................ 27,985
Replace Chiller, Building 006........................... 103,965
Renovate Building 209................................... 71,693
Renovate Headhouse 16................................... 35,124
Repairs Building 177B................................... 12,465
Repairs Building 211.................................... 7,965
Renovate Building 1120.................................. 18,391
Elevator, Building 449/Gas Cyl.......................... 50,954
Renovate Building 449................................... 4,865
Key Card Security Gate.................................. 37,002
Small Miscellaneous Projects............................ 625,031
Repairs, Building....................................... 15,000
Contingency Steam Lines................................. 297,170
Contingency............................................. 197,604
Replace Roof, Building 012.............................. 139,000
Contingency............................................. 194,488
--------------------------------------------------------
____________________________________________________
Total............................................. 9,860,000
Fiscal year 1991
Addition, Building 426.................................. $65,000
Conference Room, Building 005........................... 435,000
Electrical.............................................. 1,500,000
Building 001............................................ 735,000
Plant Sciences Building................................. 1,100,000
Dairy Research Facility................................. 2,186,330
Central Hay Storage..................................... 803,670
Repair Building 201..................................... 50,000
BARC-East Waste Water Treatment......................... 6,534,000
Building 200 Modernization.............................. 60,000
Renovate Building 007................................... 1,290,000
Demolition.............................................. 198,904
Swing Space............................................. 991,888
Contingency............................................. 50,000
--------------------------------------------------------
____________________________________________________
Total............................................. 15,999,792
Fiscal year 1992
Renovate Range 2 Greenhouse Complex..................... $3,100,000
Repair/Replace Waste Water Treatment Facility........... 300,000
Construct Plant Sciences Building....................... 12,600,000
--------------------------------------------------------
____________________________________________________
Total............................................. 16,000,000
Fiscal year 1993
Range 2 Greenhouse Complex.............................. $7,400,000
BARC-West Waste Water Treatment Plant................... 4,000,000
BARC-East Water System.................................. 600,000
Controlled Environmental Chamber Facility............... 586,000
Office/Laboratory Economic Analysis..................... 200,000
Animal Space Economic Analysis.......................... 230,000
Contingencies........................................... 531,000
--------------------------------------------------------
____________________________________________________
Total............................................. 13,547,000
Fiscal year 1994
Modernize Building 001.................................. $9,700,000
Modernize East Potable Water System..................... 7,400,000
Design New Animal Building.............................. 530,000
Upgrade West Electrical System.......................... 1,500,000
Design to Modernize Building 004........................ 450,000
Contingencies........................................... 120,000
--------------------------------------------------------
____________________________________________________
Total............................................. 19,700,000
Fiscal year 1995
Modernize Building 004.................................. $3,960,000
--------------------------------------------------------
____________________________________________________
Total............................................. 3,960,000
Fiscal year 1996
Construct Controlled Environment Facility............... $4,700,000
Design/Construct Infrastructure in 300 Area............. 2,000,000
Contingencies........................................... 310,000
New Animal Building Design.............................. 615,000
Cooling Tower for Building 004.......................... 375,000
Renovate Building 001................................... 250,000
--------------------------------------------------------
____________________________________________________
Total............................................. 8,000,000
Fiscal year 1997
Design New BHNRC Building............................... $1,700,000
Infrastructure Upgrades BARC-East....................... 1,400,000
Fiber Optic Backbone Cabling............................ 700,000
Contingencies........................................... 700,000
--------------------------------------------------------
____________________________________________________
Total............................................. 4,500,000
--------------------------------------------------------
____________________________________________________
Total for fiscal year 1988 through fiscal year
1997.............................................. 103,416,792
Proposed fiscal year 1998
Construct New Feed Center............................... $1,970,000
Fiber Optic Backbone Cable.............................. 850,000
Contingencies........................................... 380,000
--------------------------------------------------------
____________________________________________________
Total............................................. 3,200,000
buildings and facilities
Question. Please provide the Committee with costs and projects
completed and planned for the modernization of the Plum Island Animal
Disease Center.
Answer. Plum Island Animal Disease Center (PIADC): Modernization
projects at PIADC are as follows:
Fiscal year 1992
Consolidation (C)....................................... $18,400,000
Fiscal year 1993
Underground Storage Tank Removal/Replacement (C)........ $443,000
Wastewater Treatment Plant (C).......................... 185,000
Boiler Rental (C)....................................... 304,000
Incinerator Repair (C).................................. 74,000
Environmental Assessment (S)............................ 33,000
Chiller Plant (C)....................................... 1,400,000
Sludge Removal (C)...................................... 500,000
Miscellaneous Projects.................................. 784,000
--------------------------------------------------------
____________________________________________________
Total............................................. 3,723,000
Fiscal year 1994
Wastewater Treatment Plant (C).......................... $1,250,000
Miscellaneous Projects.................................. 741,250
--------------------------------------------------------
____________________________________________________
Total............................................. 1,991,250
Fiscal year 1995
Above-Ground Fuel Tanks (Phase I) (C)................... $1,168,000
Miscellaneous Projects.................................. 747,000
--------------------------------------------------------
____________________________________________________
Total............................................. 1,915,000
Fiscal year 1996
Upgrade Fire Alarm System B-101 (D/C)................... $1,000,000
Above-Ground Fuel Tanks (Phase 2) (C)................... 1,000,000
Wastewater Treatment Plant Closure (C).................. 1,500,000
Boiler Plant Design..................................... 500,000
PCB Transformer Replacement (D/C)....................... 51,000
Miscellaneous Projects.................................. 1,006,000
Renovate B-102 (D)...................................... 250,000
DOE-National Renewable Energy Lab Support............... 280,000
Plum Island Harbor Repairs (D/C)........................ 1,514,000
Install Chiller (D/C)................................... 900,000
Electric/Telephone Distribution System (D).............. 199,000
--------------------------------------------------------
____________________________________________________
Total............................................. 8,200,000
Fiscal year 1997
Above-Ground Fuel Tanks (Phase 3) (C)................... $1,400,000
Underwater Electric Cable (C)........................... 2,000,000
Sewage Decon Plant (D).................................. 500,000
Miscellaneous Projects.................................. 500,000
Upgrade Pathological Incinerators (D)................... 400,000
Electric/Telephone Distribution System (C).............. 2,800,000
Energy Savings Performance Contract Windmill Proposal(s) 600,000
--------------------------------------------------------
____________________________________________________
Total............................................. 8,200,000
--------------------------------------------------------
____________________________________________________
Total for fiscal year 1992 through fiscal year
1997.............................................. 42,429,250
Future modernization efforts at PIADC will address numerous
infrastructure and physical plant repair and improvements. While the
original modernization plan was estimated at $81 million in fiscal year
1995 dollars, inconsistent funding levels have resulted in a higher
cost.
Question. Please provide the Committee with costs and projects
completed and planned for the modernization of the Subtropical
Agricultural Research Laboratory at Weslaco, Texas.
Answer. The Modernization Plan for the Subtropical Agricultural
Research Laboratory in Weslaco, Texas, established six phases for
execution as listed below:
Phase 1: Planning and Design--This phase completed the
Environmental Assessment for the entire modernization effort and
initiated the Program of Requirements for Phases 2 and 3. Demolition of
some existing dilapidated buildings was accomplished during this phase.
Construction Cost--$93,000
Planning and Design Cost--$322,000
Status--Design and construction was completed in the first quarter
of fiscal year 1996.
Phase 2: Site Preparation and Utility System Upgrade--Projects in
this phase upgrade the water, sanitary, electrical, and storm drainage
systems at the main laboratory campus. Recently acquired property is
cleared of existing structures in preparation for a new laboratory
facility to be constructed in Phase 3. Some grading and landscaping
work is accomplished as well as construction of a new entrance road
serving the site.
Construction Cost--$1,278,000
Planning and Design Cost--$69,800
Status--Design efforts for the Phase 2 projects are completed.
Construction contract was awarded in July 1996.
Phase 3: Construct New Laboratory Facility, Building N-01--This
phase constructs a new laboratory and office building of approximately
24,700 gross square feet. The new facility will house the Crop Quality
and Fruit Insect Research Unit as well as the Laboratory Director and
administrative support staff. Also included in this phase is renovation
of two existing greenhouses and construction of four new greenhouses.
Construction Cost--$6,773,000
Planning and Design Cost--$570,400
Status--Design for the new laboratory is complete. Construction
contract award is anticipated in July 1997. Design for the renovation
of two greenhouses and construction of two greenhouses is completed. A
construction contract was awarded in April 1997. Design for the
remaining two greenhouses has not started. The construction of these
facilities is partially funded.
Phase 4: Construct Operations Support Facilities and Renovate
Research Facilities--This phase constructs a pesticide storage and
handling facility, farm implement storage facility, and a shipping and
receiving facility. It includes renovation of the primary existing
research building as well as headhouse and greenhouse space on the main
research campus, Highway 83 site.
Construction Cost--$4,290,300
Planning and Design Cost--$377,200
Status--Design for the operations support facilities has been
completed, construction is scheduled for fiscal year 1998. The design
for renovation of the research facilities began in fiscal year 1997 and
award of a construction contract is scheduled in fiscal year 1998.
These construction projects are not currently funded.
Phase 5: Renovation of Existing Laboratory Facilities--This phase
renovates existing headhouse and laboratory space in Buildings 205,
221, 414, and 202 located at both the Highway 83 campus and the FM1015
site.
Construction Cost--$2,890,400
Planning and Design Cost--$218,300
Status--The design for renovation of these research facilities is
scheduled to begin in fiscal year 1998 and award of a construction
contract in fiscal year 1999. The design and construction of these
projects is not currently funded.
Phase 6: Renovation of Existing Laboratory Facilities--This phase
completes renovation of the existing laboratory facilities in Buildings
203 and 204 located at the Highway 83 campus. It also accomplishes
demolition of existing facilities which have been retained as swing
space during the modernization effort.
Construction Cost--$3,218,900
Planning and Design Cost--$328,100
Status--The design for renovation of these research facilities is
scheduled to begin in fiscal year 1998 and award of a construction
contract in fiscal year 1999. The design and construction of these
projects is not currently funded. The total estimated planned, design,
and construction costs for the modernization at this facility is $20.5
million.
Question. Please provide obligations to date and projected funding
requirements for major modernization projects planned by ARS.
Answer. Obligations and projected funding requirements are as
follows:
------------------------------------------------------------------------
Balance of
Modernization location Obligations to funding
date required
------------------------------------------------------------------------
California--Albany...................... $38,270,227 $15,000,000
Illinois--Peoria........................ 4,780,600 70,200,000
Iowa--Ames.............................. 1,620,550 139,000,000
Louisiana--New Orleans.................. 17,836,000 22,650,000
Maryland:
Beltsville.......................... 73,072,837 102,000,000
NAL................................. .............. 18,000,000
Michigan--East Lansing.................. 462,000 18,100,000
New York--Plum Island................... 15,829,000 66,000,000
Pennsylvania--Wyndmoor.................. 4,870,000 25,700,000
------------------------------------------------------------------------
The ``Balance'' represents remaining modernization project funding
requirements that were either originally identified via facility
condition studies, the development of Program of Requirement documents,
in-house estimates, or design drawings. Obligations to date for these
projects was either congressionally funded through the Agency's
Buildings and Facilities account, or through the Agency's Annual Repair
and Maintenance budget line item appropriation.
Question. Please provide obligations and projected funding
requirements for each major new construction project.
Answer. Obligations and projected funding requirements for each
major new construction project are as follows:
------------------------------------------------------------------------
Balance of
Construction locations Obligations to funding
date required
------------------------------------------------------------------------
California--Parlier..................... $1,503,716 $23,400,000
Florida--Ft. Lauderdale................. 43,000 4,000,000
France--Montpellier..................... 500,000 3,400,000
South Carolina--Charleston.............. 1,176,570 14,030,000
Texas--Lubbock.......................... 1,367,079 ..............
------------------------------------------------------------------------
The ``Balance of Funding Required'' represents remaining
construction project funding requirements that were either originally
identified via the development of Program of Requirement documents, in-
house estimates, or design drawings. Funding to date for these projects
was either congressionally funded through the Agency's Buildings and
Facilities account, or through the Agency's Annual appropriation.
Question. The Committee appropriated $18.3 million to ARS for
Repairs and Maintenance of Facilities in fiscal year 1996. How were
these funds used?
Answer. The fiscal year 1996 repair and maintenance budget was
$18.262 million. This amount includes $14.246 million in Agency funds,
$900,000 for the National Agricultural Library, $740,000 for the USNA,
and $2.376 million in BARC Renaissance 1993 funds. Some of the types of
repair and maintenance projects funded in fiscal year 1996 include:
bridge repairs, roof repair, HVAC repair, plumbing repairs, upgrade to
sewage lines, electrical repairs, fencing replacement, painting,
pavement repair, asbestos and lead abatement, accessibility projects,
and replacement of fire alarm systems.
Question. What are the planned use of these funds in fiscal year
1997?
Answer. Some of the types of repair and maintenance projects
scheduled in fiscal year 1997 include: upgrades to building systems
such as HVAC, plumbing, sewage lines, water treatment facilities,
electrical, roof repairs, accessibility requirements, CFC replacement,
asbestos, and lead abatement; removal of underground storage tanks;
correcting building and life safety code deficiencies; repair of
pavement; energy surveys and retrofits, and harbor repairs.
Question. The Budget Appendix reflects year-end 1995 unobligated
balances for $105 million for Building and Facilities. Identify these
balances by project.
Answer. The Budget Appendix reflects a year-end 1996 (September 30,
1996) unobligated balance of $79.1 million for Building and Facilities.
The balance by project is as follows:
Location Balance
Arizona, Maricopa--Water Conservation Laboratory........ $396,000
Arkansas, Stuttgart--Rice Center........................ 1,064,604
California:
Albany--Western Regional Research Center............ 3,370,443
Parlier--Horticultural Crop Research Laboratory..... 2,630,000
Riverside--U.S. Salinity Laboratory................. 881,353
Colorado, Ft. Collins--Storage Laboratory............... 117,648
District of Columbia, National Arboretum................ (9,896)
Florida, Ft. Pierce--Horticultural Laboratory........... 4,524,982
France, Parlier California, Florida..................... 470,001
Hurricane Andrew/Iniki--Florida, Hawaii, Louisiana...... 13,053,794
Georgia, Athens--Poultry Disease Laboratory............. 935,665
Illinois, Peoria--National Center for Agriculture
Utilization Research................................ 5,165,176
Indiana, Lafayette--Purdue University................... 9,892
Iowa, Ames--
Swine Center........................................ 2,111,664
National Animal Disease Center...................... 411,745
Kansas, Manhattan--Grain Marketing Research Laboratory.. 1,201,641
Louisiana, New Orleans--Southern Regional Research
Laboratory.......................................... 889,293
Maryland, Beltsville--Modernization..................... 16,272,258
Massachusetts, Boston--Nutrition Center................. 33,031
Michigan, East Lansing--Regional Poultry Research
Laboratory.......................................... 2,327
Minnesota, Morris--Soil and Water Laboratory............ 43,454
Nebraska, Clay--Meat Animal Research Center............. 19,985
New York, Greenport--PIADC.............................. 4,693,853
North Dakota, Fargo--
Research Laboratory, North Dakota State University
(NDSU)............................................ 14,561
Greenhouse, NDSU.................................... 4,781
Oklahoma:
Lane--Farm Experiment Station....................... 231
Lane--Agricultural Research Facility................ 44,860
Woodward--Greenhouse................................ 355
Oregon, Corvallis--Northwest Small Fruit Center......... 5,198
South Carolina, Charleston--
Feasibility Study................................... 635
Construction Vegetable Laboratory................... 9,460,795
Texas:
Lubbock--Plant Stress Laboratory.................... 5,534,207
Lubbock--Cons Moisture Laboratory................... 1,714
Weslaco--Plan ARS Bee Laboratory.................... 71,287
Weslaco--Southern Agricultural Research Center
Modernization..................................... 3,788,340
Washington, Yakima--Fruit/Vegetable Laboratory.......... 321
West Virginia--National Aquaculture Center.............. 1,821,651
Wisconsin, Madison--Greenhouse.......................... 12,176
--------------------------------------------------------
____________________________________________________
Total............................................. 79,050,025
It is expected that the unobligated balance at the end of fiscal
year 1997 will be $53,400,000.
Question. Congress appropriated $3.9 million in fiscal year 1994 to
complete the construction of the Necropsy incinerator and at the
National Animal Disease Center. In fiscal year 1996, Congress agreed to
the department reprogramming request providing an additional $700,000
to complete this project. When will this project be completed?
Answer. The contract completion date is June 30, 1997. However, due
to delays in shipping, the high efficiency particulate air (HEPA)
filters, which are critical to the overall biocontainment, the
Necropsy/Incinerator building may not be completed until August 29,
1997.
Question. The Committee understands that once the Necropsy
incinerator facility is complete, there will remain serious
biocontainment problems. Is this true? Please explain? How much more
money will be required to remedy this problem and how will it be
financed?
Answer. Currently the NADC does high-level biocontainment work in
Buildings 3 and 4. Pathological waste generated in these buildings is
incinerated in the Building 4 incinerator (the incinerator in Building
3 is only used on an emergency or backup basis because of its
deteriorating condition). After the Necropsy Incinerator facility is
completed and operating, high-level biocontainment waste will be
incinerated in this facility and in Building 4.
However, there will be a need for an animal transport vehicle to
transport live infectious, or potentially infectious animals from the
area where the research is conducted to the Necropsy Incinerator
facility. Materials from other containment buildings, including
Building 3, will have to be transported to either Building 4 or the
Necropsy Incinerator facility for disposal. This animal transport
vehicle must be able to connect via a containment air seal to both the
source containment building and the Necropsy Incinerator facility, and
be able to maintain Biosafety Level 3-Ag containment security while
transporting the animal from the research building to the appropriate
incinerator building.
The cost of a Biosafety Level 3-Ag transport vehicle for large
animals and associated work to the existing buildings has not yet been
determined. It is anticipated that additional Building and Facilities
funds will be required for construction of this specialized vehicle.
In the preliminary design, the Necropsy Incinerator facility was to
be connected to Building 3 in order to address this transportation
problem. However, due to limited funding, and other technical and
logistical problems associated with relocation of existing Center
utilities and the feasibility of upgrading containment of Building 3,
the facility was constructed as a stand-alone building. This decision
was consistent with the NADC needs identified in the Facility Condition
Study being completed at that time.
The NADC has other existing biocontainment problems that have been
identified in the 1992 Facility Condition Study. This fiscal year, the
Agency plans to fund the development of a Master Plan that will provide
the roadmap for the process by which existing facilities at NADC will
be modernized to meet current requirements and standards.
Question. Your justification for BARC modernization states costs in
excess of $190 million, yet the fiscal year 1998 request is only $3.2
million toward this effort. Which is realistic, the $190 million
requirement or the 1.5 percent increase requested to meet this need?
Answer. The $190 million plus requirement is a realistic estimate
of the cost to modernize BARC. The limited increase requested in fiscal
year 1998 is due to other higher priority ARS facility project needs.
Each year every project must compete with other Agency and Department
projects for funding, and decisions are made accordingly.
Question. Each year modernization funds are requested for various
phases of ARS utilization centers. Provide for each center, phases
completed and the work and costs involved. Also, provide the remaining
phase, cost and work to be done.
Answer. The Department has established the Strategic Planning Task
Force as required by the 1996 Farm Bill to investigate the utilization
of Agricultural research facilities. Pending the results of this Task
Force, modernization plans at the four ARS utilization centers are as
follows:
Southern Regional Research Center (SRRC).--The SRRC Modernization
involved a complete renovation of the surrounding site and Chemical
Wing and included such items as asbestos abatement, new and upgraded
drainage, landscaping, equipment pads, pavement repairs, retaining
walls, and handicapped ramps. Work to the interior of the building will
include replacement of HVAC systems, reconfiguring each laboratory
module, new stairwell to comply with safety codes, replacement of floor
finishes, new windows and complete patched, primed, and painted walls
and ceilings as necessary. Total cost is estimated at $17.8 million,
phased over 9 years.
The design of the Chemical Wing project is complete. Construction
for Phase I was awarded in fiscal year 1991 for $1.4 million. Phase II
was awarded in fiscal year 1992 for $2.4 million using Agency funds.
Phases III, IV, and V were awarded in fiscal year 1992 for $5 million.
(In fiscal year 1992, $1,950,000 was specifically appropriated for
Phase II. However, this budget line item amount was not sufficient to
pay the cost of Phase II which totals $2.7 million for construction,
contingency, and architect-engineer inspection services. The $1,950,000
was used to award Phase V.) In fiscal year 1994, $2.667 million was
appropriated for Phase VI of the Chemical Wing and in fiscal year 1995,
$2.934 million was appropriated for construction of Phase VII. These
phases were awarded in fiscal year 1996. Design and construction of
Phase I site repair work was funded using $1,651,000 in fiscal year
1993 appropriations. The fiscal year 1996 appropriation of $900,000 was
used to award Phase 2 of the site repair work.
The remaining elements of SRRC that need to be modernized are the
Administration Wing, Textile Wing, and the Industrial Wing. It is
estimated the completion of the SRRC modernization program will require
an additional $22.65 million.
Eastern Regional Research Center (ERRC).--In fiscal year 1993, ARS
completed the facility modernization study begun in fiscal year 1992.
The findings indicate that the utilities and building infrastructures
have reached the end of their useful lives, and the facility itself has
been overtaken by the evolution of codes, Agency criteria, and research
needs over the past 50 years.
The proposed modernization program will occur in 9 phases with a
total planning, design, and construction budget of $39 million over 9
years.
In fiscal year 1994, ARS funded design of Phase I (Service
Building) and Phase II (Engineering Research Laboratory in Pilot Plant)
with $595,000 in Repair and Maintenance funds. In fiscal year 1995, ARS
funded construction of Phase I, and design of Phases III through VII,
using $4,175,000 in Repair and Maintenance funds. In fiscal year 1996,
ARS funded construction of Phase II using $4,100,000 in Repair and
Maintenance funds. In fiscal year 1997, $4,700,000 was needed to fund
construction of Phase III, but only $4 million was appropriated. In
fiscal year 1998, $5,200,000 is needed to complete funding of Phase III
and construction of Phase IV leaving a balance of $20,851,000 to
complete Phases V through IX modernization. These phases will complete
work in the Chemical and Pilot Plant wings. This additional
modernization need will be met with a combination of Repair and
Maintenance and Building and Facility funds.
Western Regional Research Center (WRRC):
1. WRRC modernization includes the upgrade of outside utilities and
complete renovation of the North Wing. The renovation includes asbestos
and lead abatement, upgrade of existing HVAC system, laboratory
reconfiguration to comply with safety and accessibility codes,
replacement of all laboratory counters and tops, replacement of floor
and windows, and completely patch, prime, and paint walls and ceilings
as necessary. Total cost is $29.6 million phased over a 7-year period.
2. The design is complete for all phases. Phases I and II were
awarded in fiscal year 1990 for $5.9 million. Phase III was awarded in
fiscal year 1991 in the amount of $3.4 million. Phase IV was awarded in
fiscal year 1993 in the amount of $3.0 million. Phases V and VI were
awarded in fiscal year 1993 in the amount of $4.4 million and $3.2
million. Construction for Phase VI is expected to be complete by the
third quarter of fiscal year 1997.
3. Total construction funds committed to date for 6 phases--$23.5
million.
4. In fiscal year 1997 $6.08 million is available to award Phase
VII construction and A-E support services. In fiscal year 1994, fiscal
year 1995, and fiscal year 1997 $1.161 million, $.919 million, and $4.0
million were appropriated for construction of Phase VII. The Area
funded all necessary fine tuning costs. Construction is expected to be
complete by the fourth quarter of fiscal year 1998.
5. The Small Animal Facility (West Annex Building) planning,
design, and construction is complete for Phase I. Design of Phases II
and III was completed in the third quarter of fiscal year 1994. The
construction of Phases II and III was awarded in the fourth quarter of
fiscal year 1994. Construction was completed in the fourth quarter of
fiscal year 1996. The design and construction costs for all three
phases is approximately $5.0 million.
6. A construction contract was awarded in September 1995 using
Agency funds of $.800 million to upgrade the building envelope of the
Research and Development Facility (RDF) (Pilot Plant) which includes
Food Processing Laboratory and Industrial Processing Laboratory.
Concurrently, a program of requirements is being developed using Agency
funds, $.180 million, for the modernization of RDF. This facility
occupies the south wing of WRRC encompassing approximately 21,000
square feet of space. The estimated design and construction for this
project is $15 million.
National Center for Agricultural Utilization Research (NCAUR):
1. The National Center for Agricultural Utilization Research is
currently proceeding with a facilities upgrade design and construction
program, as follows:
Phase IA--Utility Tunnel, Steam Lines, and Boiler: Construction
contract was awarded in the fourth quarter of fiscal year 1991.
Construction was completed in the second quarter of fiscal year 1995.
Total project cost of $2.5 million is for construction.
Phase IB--Electrical and Drain System Upgrade: Construction
contract was awarded in the third quarter of fiscal year 1992. Total
cost of $.9 million is for construction. Construction was completed in
the first quarter of fiscal year 1994.
Phase IID--Pilot Plant and Semi-Works Building Upgrades: Total cost
for design is $1,825,000 which was appropriated in fiscal year 1992.
The design for Phase II was awarded in fiscal year 1992 and is
complete.
2. Appropriations to Date: fiscal year 1992--$1,825,000 Planning
and Design for Phase II Pilot Plant; fiscal year 1993--$1,545,000
Planning and Design for Phase III Chemical Wing.
3. In fiscal year 1996 and fiscal year 1997, $3.9 million and $1.5
million have been appropriated instead of $11.7 million requested to
implement modernization efforts. A revised phasing plan was necessary
to renovate the Pilot Plant and Semi-Works Building. A phased
renovation plan was developed in fiscal year 1996 and recommended a
three-phase renovation plan for the North Wing. The initial phase
(Segment I of Phase IID) will renovate four modules of the Pilot Plant,
add mechanical rooms, and an exterior stairway. Estimated planning,
design, and construction cost is $5.4 million for this segment.
Construction will be awarded in the fourth quarter of fiscal year 1997.
4. The remaining two segments are: Segment 2 of Phase IID: This
segment will renovate adjoining areas in the North Wing. General
laboratory, support space, and testing facilities will be provided to
support the Pilot Plant modules. The Semi-Works Building will be
renovated to support infrastructure of the Center. Estimated planning,
design, and construction cost of $8.0 million is needed in fiscal year
1998. Segment 3 of Phase IID: This segment will renovate additional
laboratory, support space, and testing facilities will be provided to
support the Pilot Plant modules. Estimated planning, design, and
construction cost is $8.4 million (escalated to 1999).
5. Additional funding needed which has been escalated to the
planned year of implementation is $70.2 million. This will complete
planned modernization efforts at the Center.
Question. Funding of $3.4 million is requested for fiscal year 1998
to construct a new biocontrol laboratory in Montpelier, France. Funding
for this facility has been proposed in the President's budget in
previous years but was not approved by the Congress.
The testimony indicates that site acquisition and planning and
design work has been completed. When was this funding made available
and when was this work completed?
Answer. Two hectares of land for a new laboratory in Montpellier,
France, were purchased on September 10, 1992 for $331,290. Fiscal year
1992 Agency funds were used for this purchase. The architectural design
was completed in the fourth quarter of fiscal year 1995. Funding for
planning and design was appropriated in fiscal year 1993 in the amount
of $500,000 from miscellaneous appropriations of $1,200,000.
Question. Why was construction funding for this laboratory not
included in the President's fiscal year 1997 request?
Answer. Each year, every project must compete with other Agency and
Department projects for funding, and decisions were made accordingly.
Question. What is the total construction cost of this facility?
Answer. The total construction cost for this facility is $3.7
million of which $300,000 is expected from French subventions. The
fiscal year 1998 appropriation need is $3.4 million.
Question. Have you determined that ownership is less costly than
leasing?
Answer. The Agency has determined that the proposed permanent
facility in France will, in the long term operation of the Agency's
biological control program, represent a cost savings to U.S. taxpayers.
The current short term lease, with inadequate space and facilities, is
$197,000 annually which includes operation and maintenance. The
proposed permanent facility, with appropriate quarantine facilities and
adequate laboratories, will cost $130,000 annually to operate and
maintain. This cost savings, over the long term will offset the cost of
construction and provide superior facilities to conduct an exemplary
biological control program.
Question. Why can't research planned for this laboratory be carried
out more efficiently by contractors already located in France and
Switzerland?
Answer. Montpellier is a major center for agricultural research in
Europe and hosts the consortium AGROPOLIS of which ARS is a member.
Benefits derived from carefully nurtured relationships with individual
scientists and institutions at this location are very important to the
Agency's research programs. Yet, this research can be carried out more
efficiently by permanent ARS staff than by contractors because ARS
Headquarters and NPS maintain direct control of the Agency's program
and can respond to emerging and shifting priorities in the United
States. ARS has the mandate to meet changing national needs, which
contractors are not able. Research funds maintained by a permanent ARS
facility contribute to developing a far sighted cost effective,
institutional capability which cannot be achieved by contractors who
have their own institutional goals. In particular, contractors in
Switzerland are geographically located far from the natural range of
most ARS target pests, and cannot effectively conduct a research
program to meet the needs of the Agency.
The fiscal year 1998 request includes $4 million for a new
quarantine facility at Fort Lauderdale, Florida, for research on the
control of Melaleuca.
Question. The U.S. Army Corps of Engineers planned and designed
this facility. Why isn't the project being completed by the Corps? Why
should the USDA pick up the construction cost of this facility?
Answer. The planning and design of the facility by the U.S. Army
Corps of Engineers (COE) was actually undertaken at the request of the
Agricultural Research Service (ARS). The Administration determined that
USDA should pay for the construction cost of this facility since ARS
will operate, maintain, and provide leadership for biological control
research on Melaleuca and other aquatic weeds or exotic plant species
in Florida.
Question. There is an excellent, modern quarantine facility at
Stoneville, MS, that is grossly underutilized at the present time. Why
is another facility needed for this program?
Answer. The Stoneville quarantine facility is not adequate to
conduct Melaleuca biological control studies because: 1) the facility
is not, and in all likelihood never will be, quarantine certified for
pests that are not in Mississippi or adjacent states; 2) the facility
is not designed to hold trees like Melaleuca which is necessary for
testing and cultivation; 3) since Melaleuca is not found in
Mississippi, all host plants would have to be produced inside the
quarantine which is not practical and may not even be possible; 4) even
if it would be legal to grow Melaleuca outside of the quarantine
facility, it would not be feasible as this subtropical tree would not
be able to survive the cold winters; and 5) the cooperating research
staffs of ARS, COE, South Florida Water Management District, and the
University of Florida are not located in Mississippi.
Question. In fiscal year 1996, the Agency recommended a
consolidation of research programs by transferring the Bozeman program
to the Sidney, Montana, location. I understand that a new facility (to
include Lab/Office, Greenhouse/Headhouses, and a Biocontainment
Facility) is now needed to accommodate this consolidation of research
programs and that $600,000 in planning and design funds are needed in
fiscal year 1998 for this purpose. Does the Agency agree that this
additional facility is needed as a result of this?
Answer. The consolidated programs will preserve the high priority
research of current programs and allow for the development of an
Integrated Pest Management Center. This is enhanced by (1) the strong
grass roots regional support of producers, agribusiness, and
researchers organized in a rural development effort; (2) the region is
destined to grow agriculturally as it is one of the remaining parts of
the Western U.S. with available water resources to significantly
increase irrigated acres; and (3) research is viewed by producers and
agribusiness as a key to the region's rural development efforts.
termination of kenaf research
One of the projects proposed for termination is kenaf research
which is carried out through an extramural agreement with the
Mississippi Agricultural and Forestry Experiment Station (MAFES). MAFES
believes that kenaf holds much potential for economic development in
Mississippi and the southeastern United States. In recent months,
considerable interest in kenaf has been expressed by major corporations
in the United States and Japan. Continued research support is vital to
stimulate private sector investment which could result in significant
acreage of kenaf. With the commercial interest, it would be very poor
timing to discontinue the research program.
Question. What is your justification for proposing to terminate the
kenaf research program at the Mississippi Agricultural and Forestry
Experiment Station?
Answer. Kenaf has long been proposed as a source of fiber for
production of newsprint. Nonetheless, it has not gained a foothold in
the newsprint market, and at current low newsprint prices kenaf is
unlikely to be produced at a suitable cost. Major newsprint producers
are committed to wood feedstock, and recycling is increasing in
importance, so the future of kenaf for this market is speculative.
The project at the Mississippi Agricultural and Forestry Experiment
Station (MAFES), funded through an extramural agreement with ARS,
focuses largely on how to produce and harvest kenaf in Mississippi for
fiber. Soft commercial interest and market demand, however, does not
justify Federal investment in production research for kenaf fiber at
this time. Redirection of these funds to various pest management
research programs in Mississippi are expected to have a much greater
beneficial impact on the agriculture industries and market economies in
the mid-south.
Commercialization of kenaf products has taken place as a result of
the ARS funded kenaf program at the Mississippi Agricultural and
Forestry Experiment Station (MAFES). Products currently manufactured at
the Charleston, MS complex include:
(a) Bio-Sorb, an industrial sorbent and bioremediation agent,
distributed by Delta Environmental Services, McComb, MS;
(b) Delta-Dri, a high quality bedding for the animal research
industry, distributed by Shepherd Specialty Paper, Kalamazoo, MI;
(c) Lizard Litter, a high quality terrarium ground cover for the
retail pet trade, distributed by Energy Savers, Frampton, CA;
(d) Kenaf bark fiber for the interior automotive panels, used by
Findlay Industries, Troy, MI;
(e) Kenaf bark fiber for other nonwovens applications, used by
Danforth International, Point Pleasant, NJ;
(f) Kenaf bark fiber for pulp/paper applications, used by Ecusta,
Pisgah Forest, NC.
Question. Shouldn't kenaf research continue in order to improve
efficiency in production, processing, and marketing to assist in
further expansion of existing markets?
Answer. With the failure of kenaf to make inroads in the wood pulp
market, attention has turned to other uses of the plant, especially the
use of the core (not the fiber) as an absorbent. Several commercial
applications exist, such as animal bedding, but these are not high-
volume applications requiring large acreage of kenaf to be grown. ARS
believes that uses of kenaf other than newsprint have limited
commercial potential and that the research funding now available for
kenaf would have much greater short and long-range impact on market
economies if applied to various pest control programs. These include
the development of mass propagation technologies for biological control
organisms which could lead to the establishment of new, locally-based
industries to serve mid-south agriculture.
Funding and support by the Southern U.S. Trade Association has
found a significant demand in Japan for kenaf pulp and composite panel
products. The report and trade missions suggests that major paper
companies in Japan will require over 100,000 mt of kenaf pulp by the
year 2000. These same companies have shown interest in investing in
pulp mills and composite plants in Mississippi in order to economically
transport value-added products to Japan. These include companies such
as Oji Paper, Mishima Paper, Yamaha Livingtec, OG Corporation and
Marubeni. Senior executives are impressed with the agricultural
infrastructure available in Mississippi and the comprehensive kenaf
research program at MAFES.
Question. If the kenaf research program is eliminated, don't you
believe it would significantly alter the perception of these potential
major investors and cripple the opportunity for major economic
development in Mississippi and the Southeast?
Answer. ARS believes funding now available for kenaf would have
much greater short and long-range impact on market economies in
Mississippi and the Southeast if applied to various pest control
programs. These include the development of mass propagation
technologies for biological control organisms which could lead to the
establishment of new, locally-based industries to support agriculture
in Mississippi and the Southeast.
The kenaf research and development team hosted and/or provided
information to numerous corporations in 1996. These companies are
evaluating the technical, economic and environmental advantages of
kenaf in their respective industries. Many of these companies are quite
impressed with the potential advantages of kenaf and are seriously
evaluating commercial use. With a research and development team of some
twenty-two scientists at the MAFES, the industrial clients can find the
appropriate expert to provide the information required. There is no
other public institution in the United States that has this capability.
Question. Without reliable, up-to-date information provided by the
public sector, do you believe further kenaf developments are likely?
Answer. Further commercial developments of kenaf using available
research information and technology are very likely if a real market
demand develops for kenaf products. Good communication between public
and private sectors is vital for proper targeting of public research.
Considerable information from ARS in-house and sponsored research on
kenaf is available to the industry. ARS will work with the industry to
transfer technology to industry to foster the development of
commercially feasible products and markets. However, kenaf production
and processing costs remain high. For a market to develop, the use of
kenaf fiber must add considerable value to products, compared to other
fibers.
Interest in kenaf commercialization in other states is increasing.
Besides Mississippi, commercial developments are in process or planned
in Arkansas, Alabama, Georgia, Florida, Texas and Delaware. Investors
and university personnel utilize MAFES scientists extensively to aid
commercialization in the states mentioned.
Question. Without this support from MAFES, don't you believe the
momentum for commercialization in other states would be limited?
Answer. MAFES and ARS scientists always have a continuing role to
transfer available information and technology arising from past
research. Such activities will assist future commercial developments.
In Texas, ARS fulfilled its mission by developing and transferring
nematode-resistant varieties. Entrepreneurs there are satisfied with
the varieties, and are now concentrating on establishing a vertically-
integrated industry to reduce costs and improve efficiency.
Commercialization will succeed or fail based primarily on the economics
of kenaf production and use.
Question. Where else does ARS perform research on kenaf?
Answer. Kenaf research carried out in fiscal year 1997 is conducted
at the following locations: College Station and Weslaco, TX; Lane, OK;
New Orleans, LA; Stoneville, MS; and Athens, GA.
insect rearing facilities
ARS recently submitted an assessment of its insect rearing
facilities to the Committee. That report indicates the need for two new
insect mass rearing facilities within ARS to support research and
control efforts. It proposes that two old and inadequate facilities in
Mississippi be combined into a single new facility at Stoneville to
enable ARS to develop and support USDA and grower action program in
field crop pest control (projected cost of $10 million); and a Fruit
Fly Rearing Research Laboratory in Hawaii to address research needs for
fruit fly control in fruit and vegetable crops supporting
implementation programs conducted by the States of California and
Hawaii, and APHIS (estimated cost of $5 million).
Question. When does the Administration intend to propose funding
for the two new insect rearing facilities the report indicates are
needed?
Answer. ARS will continue to consider insect rearing needs as we
develop budget proposals for buildings and facilities over the next
several fiscal years. ARS will also be guided by recommendations of the
Strategic Planning Task Force which has been established in accordance
with the 1996 FAIR Act. This Task Force will be making a national
assessment of future federal investments for agricultural research
facilities.
Question. Was there any planning money for either of these
facilities in the Agency's original fiscal year 1998 budget submission
to OMB?
Answer. No, the Agency did not request funding for either the
Mississippi or the Hawaii insect rearing facilities in the fiscal year
1998 budget submission to OMB.
Question. What amount of planning funds are needed for each of
these facilities?
Answer. The estimated amount required to conduct planning and
design efforts for the Waimanalo, Hawaii, insect rearing facility is
$500,000, and the amount needed for the Stoneville, Mississippi,
rearing facility is $1,000,000.
With respect to the ARS insect rearing facility planned for
Stoneville, MS:
Question. Can the biological control program continue to advance on
a major scale without the new facility?
Answer. ARS has identified the area of augmentation biological
control as a major new area of technology that needs to be developed to
support the USDA Initiative on Integrated Pest Management (IPM) and
agrees with the findings of the National Research Council report that
research and development on mass propagation of biological control
agents needs to be expanded. In anticipation of these needs, ARS has
conducted substantial supporting research in this area and has
developed new cost effective artificial diets capable of producing
large numbers of effective biological control agents. Unfortunately,
neither ARS nor any other research and development organization (public
or private) has adequate facilities to conduct the necessary scale-up
research to develop and demonstrate the technical and economic
feasibility of mass rearing these new biologically-based pest control
agents. Without new facilities to conduct research on technology scale-
up and pilot scale production for field testing, augmentative
biological control can not effectively advance.
Question. How many jobs will the proposed new facility bring to the
Mississippi Delta?
Answer. An ARS planning document developed cooperatively by the
Midsouth Area Office and the National Program Staff estimated that the
proposed National Augmentative Biological Control Laboratory at the
Jamie Whitten Delta States Research Center in Stoneville, Mississippi,
would need to be staffed by 65 to 70 employees.
Question. Who are the expected customers of the output of this
facility?
Answer. Direct customers of this facility, may include agricultural
producers interested in managing insect and weed pests in a number of
different crop, commodity and rangeland/pasture situations, private
companies interested in the production of biological control agents,
USDA, APHIS and FS who are interested in using augmentative biological
control agents to control pests of agriculture and forestry, and other
federal and state land managers who are interested in non-pesticidal
methods to control insect and weed pests. Other possible indirect
customers include research and development personnel interested in new
mass production technologies, private agricultural consultants that may
recommend the use of these new biologically-based pest control
technologies, and the general public that are expected to benefit
through the reduced use of chemical pesticides.
Question. What is industry's role now in biological control of
pests and what is it expected to be in the future?
Answer. Currently, the biological control industry is in a
fledgling state as it relates to the commercialization of biologically-
based technology for large-scale pest control. Although some major
industrial groups such as Ciba-Geigy have invested in this industry
through subsidiary companies such as Ciba-Bunting, the majority of
companies are small, family owned and operated businesses that exploit
small niche markets rather than large-scale agricultural production
markets. ARS feels that the primary bottleneck in using this technology
for commercial agriculture is the development of scale-up mass rearing
technology and other supporting research that can only be accomplished
in a pilot production facility as is being proposed at the Stoneville
location. Through research and development activities at this facility,
ARS believes that large and small businesses alike can be assisted
through Cooperative Research and Development Agreements and joint
patents to further develop and commercialize new biologically-based
pest control alternatives for major agricultural commodities and
production systems.
______
Questions Submitted by Senator Bumpers
human nutrition
Question. Would you offer your views of why the Human Nutrition
research initiative is important?
Answer. The human nutrition research initiative is important
because it will provide information to (1) better define the
relationship between diet, genetic inheritance, and lifestyle and the
risk for chronic disease such as obesity, diabetes, ischemic heart
disease, and cancer; (2) improve the resistance to acute infections and
immune disorders by investigating the interaction between nutrition and
immune function; (3) enhance the capacity to promote changes in dietary
habits by basic research on neural processes, memory and learning,
appetite regulation, and physiological factors influencing food habits;
(4) improve the scientific basis for more effective Federal food
assistance programs by better defining nutrient requirements and
monitoring food and nutrient consumption and identifying socio-
economic, cultural, and environmental forces that influence eating
habits; (5) extend dietary guidance to nutritionally-vulnerable groups
within the U.S. by determining how food consumption at critical points
in the life cycle affects normal development and risk of disease; (6)
generate a more nutritious food supply by defining the basis for
modifying the health promoting properties of plant and animal foods,
and making beneficial changes in the composition of foods.
Specific benefits of the Human Nutrition Research Initiative will
include: 1) a delineation of the roles of phytonutrients, e.g.,
beneficial substances found in fruits, vegetables and grains--in
preventing chronic diseases such as cancer, cataracts, and heart
disease; in maintaining healthy body weight to avoid diabetes and other
diseases; in the role of nutrition in brain function and the resistance
to mental decline; 2) determination of factors assuring good bone
growth and the protection from osteoporosis; and 3) identification of
foods that help in the fight against infectious diseases. The
Initiative also provides for a supplemental survey on the food
consumption patterns of infants and children so that the Environmental
Protection Agency can be provided with the statistically valid sample
size for estimating the pesticide residue intakes of children as
required by the Food Quality Protection Act.
Question. In what ways will this initiative be applicable to
production agriculture?
Answer. Knowledge about health-promoting foods and components of
foods can be used by animal, plant, soil, and post-harvest scientists
to develop methods to modify food composition both during production
and processing, expand food choices, and provide more options for
healthful diets. Plant foods have over 600 phytochemicals that have
antioxidant, immune-stimulating, sex hormone-modifying, and
detoxification properties. Human nutrition research is needed to
determine which of these phytochemicals can prevent disease associated
with aging such as cancer, cataracts, and heart disease, and enhance
the ability to resist infectious disease.
Knowledge from human nutrition research indicates that a group of
chemicals known as carotenoids, which have antioxidant and immune
stimulating properties, help prevent specific diseases such as cancer.
This knowledge has been a stimulus for researchers in plant genetics
and breeding to significantly increase carotene availability in the
food supply. Through genetic research, the total carotene content in
tomatoes, sweet potatoes, corn, carrots, and cantaloupes has been
increased. Genetic selection has also yielded germplasm that initiates
carotene production in such typically carotene-free vegetables as
cauliflower, yams, cucumbers, and potatoes. Similar research is needed
to exploit the isoflavonoids and lignans, phytoestrogens found in
soybeans, and fiber-rich foods such as flax, rye, and legumes, to help
prevent sex hormone-related diseases such as breast and prostrate
cancer.
Other examples of nutritional input to modify food consumption
include the production of meat with less fat and the development of
grains with more healthful fatty acid profiles and with increased
content of health promoting vitamins and minerals.
Nutrition research results can counteract some of the claimed
negative attributes for some nutritious foods such as meat, milk, and
eggs which have affected the market for these products.
aquaculture
Question. Would you provide your views about the future of
aquaculture generally and in terms of activities at Stuttgart and Pine
Bluff, Arkansas?
Answer. Aquaculture is poised to become a major growth industry of
the 21st century. With increasing seafood demand and declining capture
fisheries, global aquaculture production will have to increase some 500
percent by the year 2025 to meet projected needs. Although the United
States is the world's largest exporter of seafood, the annual U.S.
trade deficit in fisheries products has been $4.5 billion to $7 billion
since 1987. This trade deficit is the largest for any agricultural
commodity. The expansion of domestic aquaculture could help offset this
deficit and reduce pressure on threatened capture fisheries. Led by
catfish farming, U.S. aquaculture has expanded steadily in the 1980's
and 1990's. Production increased from 308.4 million ponds in 1980 to
665.6 million pounds in 1994, while farm-gate value increased from
$260.8 million to $751.1 million during the same period.
Aquaculture accounts for approximately 181,000 jobs in the U.S.
with a total economic impact estimated at $5.6 billion annually.
Despite recent growth, the U.S. presently ranks only tenth in the
world in the value of its aquaculture production and many sectors of
the U.S. aquaculture industry are challenged to compete in the global
marketplace. Other nations, including China, Japan, Thailand, the
Philippines, and Norway, have made aquaculture a national priority with
substantial government investments in research and development. Farm-
raised seafood from foreign nations is capturing a growing share of the
U.S. seafood market. The U.S. has an important opportunity to develop
an aquaculture industry to serve national needs and the global
marketplace with high quality, safe, and wholesome aquaculture
products.
The continued growth and competitive position of the U.S.
aquaculture industry in a global marketplace will be directly related
to the resources invested in research and technology development. A
strong ARS aquaculture research and technology development program
offers significant benefits to both producers and consumers of aquatic
products by enhancing the production efficiency and quality of aquatic
organisms cultivated for both food and non-food purposes.
ARS aquaculture research at Stuttgart and Pine Bluff, Arkansas,
contributes substantially to the Agency's national aquaculture research
program. Research at Stuttgart is aimed toward improving production
efficiency, health management, product quality, and value of a variety
of important U.S. aquaculture species. ARS research at Pine Bluff,
carried out in cooperation with the University of Arkansas at Pine
Bluff, focuses on development and evaluation of new or alternative
components of aquaculture systems to improve production efficiency and
quality of freshwater fish.
rice germplasm lab
Question. What plans does USDA have to bring the rice germplasm lab
into full operation?
Answer. The National Rice Germplasm Evaluation and Enhancement
center has been designed and planned to include an expansion of
existing research efforts to include new programmatic thrusts as
follow:
Molecular Genetics.--To apply modern techniques of molecular
marking of rice genes to keep pace with technologies being developed in
the Japanese Rice Genome Project.
Cereal Chemistry.--To focus upon basic factors affecting
traditional long grain rice quality, especially sensory factors of
taste and aroma and to help develop aromatic rice varieties for U.S.
production. Ten percent of current U.S. consumption is aromatic rice
from Asia. There is also a need to develop medium grain varieties
suited to the Japanese market.
Molecular Plant Pathology.--To utilize modern biological tools to
incorporate diverse resistance in improved varieties. Major diseases
include sheath blight, blast, and a new fusarium-type disease.
Molecular Cytogenetics.--To transfer useful genetic
characteristics, such as disease resistance and improved quality from
20 species of wild relatives of rice and apomixis, which allow cloning
of plants through seeds for production of true breeding hybrids.
Plant Physiology.--To determine basic factors affecting yields and
raise the present yield ceiling. The goal is to bring high yielding
traits into new varieties, while maintaining desirable grain quality.
Question. What will the operational cost requirements be in the
short term?
Answer. The operational cost for the new facility is estimated at
$8 per square foot. This translates to an annual cost for this 46,000
sq. ft. facility of $368,000.
Question. What are the long term goals for the lab?
Answer. The long-term goal is to conduct germplasm based research
directed of the needs at the U.S. rice industry; high yields, superior
grain quality, and pest resistance. In order to keep the U.S. industry
competitive in the world marketplace, we need to be at the forefront in
the development of new technology.
ars facility closures
Background
The prepared statement of Secretary Woteki states that ARS is
moving ahead with the Strategic Planning Task Force, mandated by the
1996 Farm Bill to determine which, if any, ARS facilities should be
closed. Still, the fiscal year 1998 budget proposes to close four
facilities next year.
Question. Why did you not wait until completion of your Task Force
review to make the decisions to close facilities?
Answer. The question of which programs and locations to maintain
and which ones to phase out involved many complex issues. Although the
ARS budget has grown gradually over the last 20 years, in real terms
there has been little if any growth. Because of inflation, the rising
costs of high technology scientific equipment, unfunded increases in
personnel costs, and the expense of maintaining an aging infrastructure
ARS has seen its scientific work force shrink from 3,400 to 1,900
scientists. In addition, new programmatic demands are constantly being
made on the agency as the high priority needs of American agriculture
change. In this tight budget environment, the agency has to constantly
reevaluate what it is doing and what it needs to be doing. That process
makes us identify and discontinue areas of good and useful research
that are deemed to be of lower priority at the present time. Where
several projects at a given location are terminated, it impacts on the
agencies's ability to maintain that location. In such situations the
cost of keeping a location open cannot be borne by the remaining
programs. Regarding Prosser and Mandan, those projects that are to be
retained will be moved to other suitable locations. The facility
closures contained in the President's fiscal year 1998 budget are
driven by programmatic and budgetary considerations and not by issues
related primarily to the facilities themselves.
Question. Did you not think that Congress should have the benefit
of your Task Force recommendations before acting on your request to
close facilities?
Answer. The Strategic Planning Task Force will explore a host of
issues over the next several years regarding ARS and other federally
funded research facilities before it submits its recommendations to
Congress and the Department. We anticipate that Congress, USDA, and the
Land Grant University system will all benefit from the work of this
task force. But in the interim, we will have to continue working within
the limits of the resources available to us as we adjust and redirect
over research program to address emerging problems and initiatives
established by the Administration, the Department, and by Congress.
update on ars items
Question. Would you provide me an update on the following ARS
items: Endophyte research at the University of Arkansas and the
University of Missouri.
Answer. Endophyte research at the University of Arkansas and the
University of Missouri is continuing as follows:
At the University of Arkansas (Fayetteville), ARS is providing
funding for cooperative research on reducing the effects of tall fescue
toxicosis through development of persistent nontoxic populations of
tall fescue, identifying the toxins, identifying beef cattle with
genetic tolerance of the toxins, determining the effect of toxins on
reproduction in cattle, and development of grazing management to
minimize the effects of the toxins.
At the University of Missouri (Columbia), ARS is providing funding
for cooperative research on effective management practices to enhance
tall fescue field persistence and to determine methods to reduce the
effects of tall fescue-fungal endophyte toxicosis. Funding will
continue at the current level to the fullest extent possible for the
Center of Excellence in Endophyte/Grass Research at the University of
Missouri and the University of Arkansas. Endophyte Grass (Univ. of MO/
AR): Fiscal year 1996 gross, $200,000; fiscal year 1997 gross,
$198,400; and fiscal year 1998 gross, $198,400.
Extramural Agreements with University of Missouri ($81,456) and
University of Arkansas ($80,152) in fiscal year 1997.
Question. Would you provide me an update on the following ARS
items: Lower Mississippi Delta Nutrition Intervention Project.
Answer. This nutrition project is a fully participatory consortium
of seven diverse partners organized to address the problems and needs
of the population of the Lower Mississippi Delta. The seven partners
are: Alcorn State University, Arkansas Children's Hospital Research
Institute, Pennington Biomedical Research Center, Southern University
and A&M College, University of Arkansas at Pine Bluff, University of
Southern Mississippi, and the Agricultural Research Service (USDA/ARS).
An electronic communication system among the partners (including
electronic mail, fax, and video conferencing) was implemented and is in
regular use. The consortium is publishing a monograph of existing data
relative to the nutritional status and health of people in the Delta of
Arkansas, Louisiana, and Mississippi. Advisory Groups have been
established in each State. A pilot/validation study of food consumption
and food security was developed. All partners participated in three
capacity building workshops focused on nutritional and dietary
assessment methods, community assessment methods, and nutrition
intervention methodology. Thirty-six counties (10 in Arkansas, 12 in
Louisiana, 14 in Mississippi) have been selected for the research based
on rates of unemployment, population, and percent of population below
the poverty level. A key informant survey has been piloted and the main
survey will be implemented in the 36 counties in May/June, 1997. With
direction from a USDA Scientific Review Board, a pilot/validation study
to determine the feasibility of using telephone interview methodology
to obtain food consumption and food security data will be underway
during the summer of 1997. This information will be used as baseline
data to evaluate the impact of welfare reform in the area at a later
time. Other research protocols are being developed including a
community assessment survey and a longitudinal study of nutritional
status of select segments of the population.
national center for agricultural law research and information
Question. Would you provide me an update on the following ARS
items:
The National Center for Agricultural Law Research and Information.
Answer. The National Agricultural Library (NAL) administers funding
for the National Center for Agricultural Law Research and Information
(NCALRI) through a grant to the University of Arkansas School of Law.
NAL assists NCALRI in the dissemination of information on agricultural
law; operation of the Center's information programs; training of Center
staff; implementation of compatible cataloging and indexing methods;
and addition of the Center's records to NAL's AGRICOLA database and
online catalog.
The NAL home page on the Internet provides a link to the NCALRI
home page, and NCALRI links to the USDA home page. Potential users may
identify NCALRI publications using INFOLINKS, the University of
Arkansas online library catalog, NAL's AGRICOLA database and ISIS
online catalog, and catalogs of other libraries. Users may obtain many
of these publications through interlibrary loan departments at the NAL,
the University of Arkansas Mullins Library, and other libraries. Order
information for many NCALRI publications is provided on the NCALRI home
page.
______
Question Submitted by Senator Harkin
I have reviewed the draft strategic plan for the Agricultural
Research Service and applaud the effort expended in developing this
document. I am concerned about the measurement of performance mainly on
the basis of peer-reviewed journals articles. We all want excellent
science from our national labs, but we also want science that is
relevant to the problems faced by farmers in the field. Producers want
answers to critical problems of agricultural production.
Question. How will you incorporate the needs of producers for
answers to specific problems such as wheat/barley scab, the need for
new crops, insect infestations and the need for increasing yield of
crops and livestock into your strategic plan? What specific
measurements in addition to scientific articles, will you employ to
ensure that you are meeting yield goals? pest resistance goals?
environmental goals? food safety goals? development of new product
goals?
Answer. Let me stress that we have a long history of working
closely with our customers to determine their research needs. Our
customers range from USDA action and regulatory agencies, other Federal
and State agencies, commodity groups, processors, farmers, ranchers, to
scientists around the world. We try to track ``emerging problems''
(diseases, weeds, insects, pathogens, and so forth) before they begin
to affect American agriculture. In the case of Karnal bunt for example,
our scientists followed its movement northward through Mexico and,
before it infected American wheat fields, were searching for ways to
control and eradicate the fungi. In addition, we were already searching
world-wide for Karnal bunt resistant wheat that might become the bases
for a long-term solution to this problem. We respond with similar speed
and vigor to any threat that could jeopardize the safety and security
of U.S. agricultural production systems
Before we started to draft the ARS strategic plan, we held five
regional visioning conferences specifically to obtain input from our
customers on what they saw as the future needs of American agriculture.
When we begin or renew a research project, conduct a program review at
a research location or center, or establish a new National Program we
involve customers in the process to ensure that our research is
relevant to their needs. In part as a result of our customer outreach
efforts, all of the issues you noted in your question, yields,
environmental protection, food safety, and pest resistance, are covered
in the ARS strategic plan.
______
Questions Submitted by Senator Kohl
Recently I wrote you with questions regarding the ARS commitment to
the new Integrated Farming Systems program initiated by the agency, and
funded by Congress, in fiscal year 1997. I greatly appreciated your
prompt written response to my questions, which has been very helpful in
clarifying some of my concerns. However, a few of your written
responses raise additional questions, which I would like to have
clarified for the record. Specifically,
Question. In your letter, you state that the $1 million provided in
fiscal year 1997 for the IFS program has been ``institutionalized into
ARS' base research program on IFS which agency-wide is proposed to
total $7,517,800 in fiscal year 1998.'' Could you please provide me
with an accounting of the full $7,517,800 request. Specifically, what
activities does ARS intend to conduct with this funding, and where
would these activities take place?
Answer. The ARS base funding for Integrated Farming Systems (IFS)
research is currently at $7,597,800 and is proposed to become
$7,517,800 in fiscal year 1998. The focus of integrated farming systems
research is two-fold: 1) Develop farming systems that are sustainable,
economically viable and environmentally friendly; and 2) Provide
management decision aid and information systems that enable farmers and
their consultants to evaluate alternatives, both strategically and
tactically, so that they may make informed decisions about farming
operations in the context of a large number of variables.
The following ARS locations are conducting research relative to the
development of farming systems: Athens, GA; Ames, IA; St. Paul, MN;
Columbia, MO; Oxford, MS; Lincoln, NE; Columbus, OH; University Park,
PA; Florence, SC; and Madison, WI.
The following ARS locations are conducting research on decision aid
and information systems: Tucson, AZ; Ft. Collins, CO; Morris, MN; and
Madison, WI.
Question. Last year, it had been my impression that the IFS
program, as described in the fiscal year 1997 budget request, was a new
program. Now, I am getting the impression that the agency is viewing
the IFS program as an ongoing program that existed prior to fiscal year
1997. Could you clarify any confusion with regard to this matter?
Answer. IFS is a designation for a new research emphasis rather
than for a new program of research. As a result of a presidential
initiative in 1990, ARS and other federal agencies embarked upon an
agricultural water quality initiative, one aim of which was the same as
focus number 1 above. The first seven locations conducting research on
farming systems are also involved in the USDA Water Quality Program
where a systems approach is being taken to create harmony between
agriculture and the environment. Concurrently, other ARS units were
developing models, expert systems, and other types of decision
assistance tools to help farmers make complex decisions about their
farm operations. Those units are included in the second part of the
above list.
Several years ago, the U.S. scientific community realized the
benefits of a systems approach, and scientists began characterizing
some of their work as being oriented towards IFS. ARS began
unofficially recognizing and tracking IFS about three years ago. In
fiscal year 1997, however, a first attempt has been made at an official
designation and tracking of this area of research. In common with the
rest of the scientific community, ARS has not come to a final decision
about establishing boundaries around what is to be called IFS research.
Such boundaries are usually indistinct. The list of locations given
above may change in the future.
______
Questions Submitted by Senator Byrd
national center for cool and cold water aquaculture
Question. Please detail the progress in developing the National
Center for Cool and Cold Water Aquaculture.
Answer. A detailed progress report follows:
--Senate Report No. 101-468, 1991, directed ARS to report on the
feasibility for establishing a National Fresh Water Aquaculture
Research Center (subsequently named the National Center for
Cool and Cold Water Aquaculture [NCCCWA]) in Appalachia. ARS
submitted the report in March 1991.
--Senate Report 102-116, 1992, directed ARS to report on the program
and site requirements for the NCCCWA. The report was submitted
in March, 1992.
--Senate Report 103-102, 1994 directed ARS to proceed with the
environmental assessment required to make final recommendations
on a suitable site for the NCCCWA. A report was submitted in
June 1993. Since then an additional site in Leetown, WV, was
identified. An environmental assessment for that site is
underway.
--ARS received $1.9 million in fiscal year 1995 for land purchase and
laboratory planning and design. ARS received $6 million in
fiscal year 1997 for construction of the NCCCWA. An additional
$6 million will be required for construction.
--ARS held a program planning workshop in March 1996 to define the
research program and criteria for laboratory site and
facilities needs.
--Through a September 1996 Memorandum Of Understanding, ARS will co-
locate the NCCCWA with the U.S. Department of the Interior's
(USDI) Leetown, WV, Science Center. This site, already
federally owned, will enable ARS to develop a cooperative
program with the USDI Fish Health Laboratory at Leetown, WV,
and to share ARS administrative overhead with the ARS
Appalachian Fruit Research Station, Kearneysville, West
Virginia, within a mile of the Leetown site.
--In December 1996, ARS selected an A-E firm to carry out the design
for the NCCCWA. The design is expected to be completed by
September 1998.
--ARS is presently negotiating for the purchase of a 215-acre farm
adjacent to the Leetown site, to provide for additional
watershed protection.
--The projected research program will require a modern laboratory
complex, comprising approximately 30,000 square feet, with 12
scientists, and require an annual operating budget of
approximately $4 million. No funds have yet been appropriated
for the research program.
--A staffed research facility to address cool and cold water
aquaculture production problems could be operational as early
as the year 2000.
Question. While the center is under construction, what actions will
the USDA take to expand cool and cold water aquaculture opportunities
in the state? Through the land-grant university research, extension,
and higher education system? Through the Freshwater Institute at
Shepherdstown, West Virginia?
Answer. While the National Center for Cool and Cold Water
Aquaculture (NCCCWA) is under construction, the Agricultural Research
Service (ARS) will continue its ongoing cool and cold water aquaculture
research programs through the ARS Appalachian Fruit Research
Laboratory, Kearneysville, WV. ARS has conducted an in-house research
program in cooperation to develop means to remove with the Freshwater
Institute in Shepherdstown, West Virginia, wastes and dissolved
nutrients from the water used for aquaculture before it is returned to
streams or rivers. The water used in this research comes from the
intensive culture research tanks of the Freshwater Institute.
Most of the ARS research has been focused on removing the nutrients
through the technique of thin-film hydroponics, and using the nutrients
to grow commercially valuable crops such as lettuce, sweet basil,
strawberries, and turf grass. Research also has been done on artificial
wetlands, that efficiently remove nutrients, but do not produce
commercially valuable crops.
ARS has recognized the strong potential for cooperation in
aquaculture with the University of West Virginia, and has had
preliminary discussions with the University to identify opportunities
for collaborative aquaculture research and technology transfer programs
while the NCCCWA is under development and after it has been
constructed.
As soon as program funding for the NCCCWA has been appropriated,
ARS will initiate hiring of aquaculture scientists so that research
programs can be undertaken, even before the NCCCWA is constructed. The
Leetown Science Center has offered the use of research facilities and
space during the interim period.
freshwater institute
Question. Please provide an update on the programs being carried
out through your cooperative research arrangement with the Freshwater
Institute. Detail the specific research projects and problems currently
being addressed.
Answer. Through a cooperative research arrangement with the
Freshwater Institute, ARS has provided funds to the Freshwater
Institute to support a portion of its research program on aquaculture
in Appalachia. The research problems to be studied have been developed
jointly by ARS and the Freshwater Institute, and the research proposals
have been developed by the Freshwater Institute.
The cooperative research arrangement between ARS and the Freshwater
Institute is consolidated under a cooperative program entitled,
``Development of Aquacultural Systems for Appalachia,'' and has
resulted in two highly productive, ongoing research projects. The first
project is ``Water Quality Control in Intensive Recycle/Reuse
Aquaculture Production Systems.'' This project is focusing on
developing new or improved technologies for intensive recycle/reuse
aquaculture systems, including modifications to and evaluations of
fluidized sand-bed filter design, application of ozone with low-head
oxygenator technology, new carbon dioxide control techniques, waste
feed detection technology, control of bacterial and nodular gill
disease, economic modeling, and quality control. The second project is
``Arctic Char: Development of Production Technologies Suited to Water
Resources in Appalachia.'' This project is identifying, studying, and
addressing the constraints to Arctic char egg, fry, and fingerling
production using the water resources of Appalachia. Arctic char
production is new and rapidly expanding in the aquaculture industry of
the northern hemisphere, but there is a very limited research base to
support domestic production in the U.S. Research from this project will
develop and evaluate optimal production technologies and engineered
systems that will be required for producing Arctic char seedstock.
Question. What progress and/or accomplishments have been achieved
through this cooperative research arrangement? What are the funding
levels provided for these efforts in fiscal year 1997 and 1998?
Answer. Noteworthy recent progress and accomplishments for the
programs carried out through our cooperative research arrangements with
the Freshwater Institute are as follows: Scientists at the Freshwater
Institute have developed an improved ultrasonic waste feed monitor
through a cooperative arrangement with the University of Mississippi's
National Center for Physical Acoustics. This device efficiently detects
waste feed, while ignoring fecal material, and represents an
improvement over earlier technology developed by these scientists. The
device is currently being commercialized through a computer company.
Arctic char were successfully hatched and reared to the fry/fingerling
stage in recirculating systems conditions. Hatching success was from 95
to 97 percent and post-hatch survivorship was from 80 to 90 percent.
This is an important accomplishment for this difficult-to-culture
species.
Funding levels provided for the cooperative research program with
the Freshwater Institute are estimated at $1,447,200 in both fiscal
year 1997 and fiscal year 1998.
appalachian soil and water conservation research laboratory
Question. Please describe research being conducted for
agroforestry.
Answer. The agroforestry research conducted by ARS is focused on
increasing income to small family farms in forested Appalachia and the
mid-South, where rainfall is abundant but intensive agriculture can
occupy only a small proportion of the land because of steep slopes and
infertile and shallow soils. Agroforestry has been highly successful in
other parts of the world, but it has not been widely adapted to our
economy and environment, or to the kinds of small-farm enterprises
common in the eastern U.S. The basic objective is to develop
diversified and value-added production systems, including crops and/or
livestock, which provide income during the 25 to 30 years required for
growth of merchantable trees. In part, this involves the planting of
genetically improved trees which provide products other than lumber,
such as nuts, but spaced so that forages, niche-market or specialty
crops like herbs, or other marketable crops can be produced between and
beneath the trees. This research identifies compatible tree and
understory species, develops integrated pest and weed management
practices, and provides efficient management of inputs such as
fertilizer. In addition, the research provides basic knowledge
concerning the ways desirable trees and understory plants interact,
either competing with each other or synergistically promoting greater
growth by sharing the sun's energy, water, and nutrients, so that more
efficient systems can be designed and evaluated. The integration of
livestock, such as cattle, sheep and goats, into this land-use is also
studied. ARS research is focused more on management of crops and
livestock components than on forestry issues. The U.S. Forest Service
is also involved in agroforestry research through its Agroforestry
Center in Lincoln, Nebraska. ARS scientists maintain close ties with
the Agroforestry Center through communications, cooperation and
collaborations. The ARS unit in Booneville, Arkansas has both a
Memorandum of Understanding (MOU) and a interagency agreement (IAG)
with the Forest Service unit in Pineville, Louisiana regarding tree
growth research and data. The ARS unit in Beckley, West Virginia
although not a formal participant in the MOU and IAG, is knowledgeable
of these activities and also utilizes this information. The ARS
agroforestry program also explores ways that trees, shrub, and grass
plantings can be used in soil and water conservation efforts, to
stabilize streambanks, stop erosion, and improve water quality by
capturing runoff water and sediment.
Question. Please advise the committee of the potential of the
agroforestry industry in stimulating economic development in the
Appalachian region and describe research progress being made in this
area.
Answer. Twenty-eight percent of Appalachia's approximately 197,000
square miles is currently in agricultural production. Of this, the
dominant agricultural enterprise is livestock grazing by beef cattle
and sheep, although production of poultry, swine, dairy, fruit and
vegetable, and tobacco are also important. The typical Appalachian farm
is less than 150 acres in size, includes one or more hilly wooded
acres, and requires off-farm income for economic survival. Agroforestry
systems, which allow production of two or more complementary crops on
the same land base, have the potential for diversifying and increasing
total income on such farms. One example of an agroforestry system is
forage production within black walnut plantations. Research at the
University of Missouri has demonstrated a 5-fold increase in value over
a 20-year period on a black walnut/forage system versus on a similar
acreage used for forage alone. In this example, the largest increase in
value was from annual nut production income, although under this tree
species forage production also remained high. Additional value was
accrued as a future high-value veneer harvest. Research is needed to
develop sacomparable agroforestry systems for Appalachia. These systems
should emphasize species-diverse, sustainable production and include
high-value specialty crops and products that provide raw materials for
novel, value-added rural enterprises. The Appalachian Region's
proximity to major eastern population centers provides access to
markets for such niche products. Research to develop agroforestry
systems specifically suited to Appalachia was initiated at the
Appalachian Soil and Water Conservation Research Laboratory in Beckley,
West Virginia. In fiscal year 1993, funds were appropriated for
agroforestry research at Beckley, West Virginia. In fiscal year 1995,
funds were appropriated to purchase land and initiate a program on
agroforestry at Beckley, West Virginia. One area of emphasis includes
adding tree components to existing grazing enterprises; a second new
area examines production of high-value understory crops in managed
woodlots. Anticipated benefits from this research include; 1)
diversifying and improving the economic status of small, hill-land
farms; 2) development of innovative production systems which are
sustainable and ecologically compatible with the region; 3) increasing
the provision of raw materials to supply small, locally owned, value-
added enterprises; and 4) making a positive contribution to the
survival of small rural communities.
At Beckley, black walnut and honey locust were planted in
experimental spacings with various forage species on instrumented
watersheds, on a very steep hillside with varying soil depth, typical
of the region, for studies of productivity, water requirements, and
nutrient cycling. Improved strains of black walnut, honey locust, and
other trees with potential value for multiple-use plantings were
selected and planted for evaluation within forage production systems. A
modeling effort has begun on partitioning of solar radiation, water,
and nutrients between trees and understory for use as a tool to
generalize research findings for a wide range of production conditions
found in Appalachia. The objective is to find the most efficient and
cost effective plant established strategies. Other work being
implemented in this new program addresses the use of desirable trees in
the management of new varieties of chestnut and hazelnut which produce
high-carbohydrate nuts very soon after planting, as an early source of
income.
Agroforestry research began at Booneville, Arkansas, in fiscal year
1992. There, ARS scientists developed the practice of harvesting the
plentiful supplies of pinestraw for sale to homeowners and landscapers
as mulch. This provides cash flow averaging about $440.00 per acre
annually, while pine plantings mature. ARS scientists at Booneville
have demonstrated that various forages can be produced profitably
within timber plantations of various spacings, and are defining the
optimum numbers of trees and orientation of tree rows for maximizing
production of forage in the tree understory. Working with cooperators
from universities and other Federal agencies, Booneville scientists are
adapting the New Zealand Forest Research Initiative's Agroforestry
Estate Model to U.S. conditions and requirements. This model is a
decision aid which provides yields and profits for any specific
situation. It is being evaluated in the field by agroforestry
cooperators across the U.S. Booneville scientists and their cooperators
at Langston University in Oklahoma also demonstrated that goats can be
used profitably and effectively in place of herbicides to clear the
vegetation from land to control weeds and shrubs that would compete
with tree seedlings.
Question. Please identify additional program and resource
requirements to enhance the productivity of this facility.
Specifically, please provide the committee with an analysis on
constructed biosystems for disturbed hill lands.
Answer. The Appalachian region is experiencing the following
activities that potentially threaten its natural resources. Accelerated
harvesting of forests for chips and pulp and continued extraction of
minerals are creating an increasing number of disturbed sites. Because
of low population density, Appalachia is being targeted by surrounding
regions as a site for disposal of wastes. Industrial activities such as
coal power plant production in the Appalachian region are also creating
large quantities of by-products requiring disposal. A program focusing
on constructed biosystems for disturbed hill lands would benefit
Appalachia by developing management strategies for these activities.
The constructed biosystems program would focus on research in which
best management practices are developed for the integration of animal,
industrial, and municipal by-products in the development of
nontraditions agricultural with the selection of new plant materials
systems. The goals are to improve disturbed areas, develop new
agricultural enterprise and promote rural economic development.
Projected benefits include: new environmentally sound technologies for
management of disturbed lands; maintained or improved environmental
quality and enhanced standard of living; and opportunities for
cooperation with industry and other Federal and State agencies.
Question. Please describe research being done regarding the
utilization of coal combustion by-products, which are generated
abundantly in West Virginia, as a means of managing acidic hill-land
soils for improved growth of forage and crop plants.
Answer. Plant growth on acidic soils is limited by the deficit in
both magnesium and calcium. Coal combustion by-products from the flue
gas desulfurization process pose a disposal problem, but contain
significant amounts of calcium. A Cooperative Research and Development
Agreement (CRADA) has been developed between ARS scientists at Beckley,
WV, and Dravo Lime Company of Pittsburgh, PA, to produce a magnesium
enhanced local combustion and gypsum by-product. This now patented by-
product improved yields of forage and row crop species in acid soils.
Other research has shown that some coal combustion by-products are of
concern because trace elements, such as boron, may accumulate in
plants. Research has shown, however, that plants showed no excessive
accumulation of heavy metals. Gypsum enhanced by-products have also
been shown to raise subsoil pH and improve root growth. Another
approach under investigation is combining coal combustion by-products
with animal manures to create a nutrient source and acidic soil
conditioner.
Fluidized bed combustion residue along with polyacrylamide also
reduced erosion on tilled hillsides. This coal combustion by-product
combined at a moderate rate with phosphate rock and dolomitic lime
improved phosphorus, calcium and magnesium levels in infertile acid
soils while reducing levels of phytotoxic aluminum.
Question. Please identify the department's current research
efforts, including funding and scientific support of each project at
the Appalachian Soil and Water Conservation Laboratory.
Answer. The fiscal year 1997 funding and scientific support for
each project at the Appalachian Soil and Water Conservation Laboratory
are shown below:
------------------------------------------------------------------------
Project title Scientists Funding
------------------------------------------------------------------------
Potentials for Agroforestry................. 1.6 $396,900
Alleviation of Acid Soil Constraints to
Plant Growth............................... 2.5 1,006,200
Selection and Improvement of Plants for
Infertile Acid Soils....................... 3.5 912,100
Livestock Grazing Systems and Water Quality
in Appalachia.............................. 2.5 744,700
Management and Ecology of Pastures in the
Appalachian Region......................... 2.5 763,800
Forage Legume Breeding for the Appalachian
Region..................................... 1.4 400,200
---------------------------
Total................................. 14.0 4,223,900
------------------------------------------------------------------------
Question. Please provide significant accomplishments attributed to
each project.
Answer. Potentials for Agroforestry--The use of black locust, honey
locust and black walnut within forage pastures appears to be
beneficial. The trees provide shade for the livestock and their seed
pods are a good source of nutrients for the livestock. The growth of
shade tolerant forage species among the trees also may allow the
pastures to be grazed for a longer time during the summer.
Alleviation of Acid Soil Constraints to Plant Growth--The
application of a coal combustion power plant residue, a flue gas
desulfurization (FGD) by-product, to an Appalachian acid soil resulted
in increased crop yields. This gypsum quality by-product was effective
in raising calcium levels and reducing phytotoxic soil aluminum
concentrations. When this by-product was combined with phosphate rock
and dolomitic lime, improved soil phosphorus and magnesium levels and
higher soil pH also resulted. The development of this combined product
is being pursued through a Cooperative Agreement and Development Act
(CRADA) activity. The FGD by-product combined with polyacrylamide was
also shown to reduce soil erosion from tilled hillsides.
Selection and Improvement of Plants for Infertile Acids Soils--Poor
plant growth in acid soils is most often caused by excessive aluminum
adsorption by plant roots. This toxic effect of aluminum on plants is
dependent upon the form or species of aluminum in soil, which in turn
is dependent upon the other minerals present in a soil. The form or
species of aluminum in acid soils toxic to plants has been reevaluated
based on new information. These data were used to develop a
mathematical model that describes the interaction between aluminum and
other soil minerals that can relieve the aluminum toxicity. This model
also describes the adsorption of aluminum and other minerals by plant
root membranes. It can be used to predict the likely toxicity of
various acid soils to plants. Not only do soils differ in their
toxicity, but plants and varieties of plants differ in their tolerance
to acid soil toxicity. The Alfagraze alfalfa variety was shown to be
more tolerant and thus produce higher yields than the Vernal variety at
a soil pH of 4.6.
Livestock Grazing Systems and Water Quality in Appalachia--Grazing
studies in the Beckley area show that a balance of fiber, energy, and
protein improves nitrogen (N) use efficiency in grazing livestock. If
fiber energy and protein are in proper balance, less N will be excreted
and the reduction in manure nitrogen will improve the quality of water
leaving the watershed. A predictive energy model for grasses has been
developed that will help managers decide how to stock or utilize a
pasture to meet the energy demands of livestock. Water resource
management practices, grazing techniques, and pasture management
strategies were tested and shown to improve and preserve water quality
in highly agriculturalized karst landscapes.
Management and Ecology of Pastures in the Appalachian Region--
Different types of plants are being evaluated for use in Appalachia to
lead to improved production efficiency. The composition of new and
nontraditional plants is being examined as is the potential for
production of bioactive compounds that may serve as herbivore
deterrents. Some grasses infected with a beneficial mycorrhizal fungal
symbiont were shown to have improved nutrient uptake ability and
enhanced competitive ability, important features for low-input pasture
systems in Appalachia.
Forage Legume Breeding for the Appalachian Region--The capability
of legumes, such as clover and alfalfa, to fix atmospheric nitrogen in
combination with a bacterial rhizobia symbiont and; thus, help the
plant meet its requirement for this major nutrient as well as their
digestibility makes legumes highly desirable forage plants.
Unfortunately, most legumes are sensitive to acid soils. White clover
cultivars currently used in Appalachia were found to be less acid soil
resistant than those available from New Zealand and elsewhere. These
more resistant cultivars are now being used to develop white clover
varieties more suitable to Appalachian soils and conditions.
appalachian fruit research station
Question. Please identify the department's research projects being
carried out by the Appalachian Fruit Research Station and identify the
funding and scientific support for each.
Answer. There are twelve base funded research projects at the
Appalachian Fruit Research Station in Kearneysville, West Virginia. The
individual projects, funding and scientific support for each project
are provided for the record.
Molecular Biology and Genetic Engineering of Fruit Trees--$835,500,
2.8 scientist years.
Genetics and Cultivar Development of Pear and Peach--$536,000, 1.5
scientist years.
Cold Hardiness and Stress Adaptation in Fruit Trees--$271,500, 1.0
scientist years.
Related Costs for Apple Research--$201,300. In consultation with
industry these funds have been redirected to high priority research on
assessment of apple quality ($100,000 to East Lansing, Michigan) and in
support of apple rootstock breeding and development ($100,000 to
Geneva, New York).
Biological Management of Deciduous Tree Fruit Insect Pests--
$371,100, 1.7 scientist years.
Utilization of Waste & Byproducts from Aquaculture to Enhance
Economic . . . Sustainability--$482,800, 1.4 scientist years.
Mechanization for Deciduous Tree Fruits and Small Fruits--$301,200,
1.2 scientist years.
Vegetation and Soil Management in Fruit Production--$568,200, 2.2
scientist years.
Improved Deciduous Tree Fruit Product, Efficiency and Fruit Quality
Through Integrated Cultural Management--$606,200, 1.7 scientist years.
Deciduous Fruit Crop Diseases--$438,700, 2.0 scientist years.
Nondestructive Sensors Measuring the Postharvest Quality of
Apples--$415,000, 1.1 scientist years.
Development of Aquacultural Systems for Appalachia--$1,302,700,
extramural project.
Question. Please provide the accomplishments made by the station in
developing naturally based products that can be used by the fruit
industry as alternatives to pesticide control of post-harvest rotting.
Answer. A significant discovery has been made in pest and disease
control with the observation that a naturally occurring hydrophobic
clay material when applied to foliage will greatly reduce the severity
of insect attack and severity of disease on susceptible fruit trees.
Question. Significant losses are occurring each year in the
production of peaches due to plant stress. Please advise the committee
of the progress being made by the Appalachian Fruit Research Station in
identifying stress-resistant genes which would enhance peach quality
and production.
Answer. ARS scientists at the Appalachian Fruit Research Laboratory
in Kearneysville, West Virginia have identified genes that may provide
resistance to plant stress in peaches, specifically freezing stress. A
gene has been isolated from peach tree bark that encodes a protein
known as a ``dehydrin.'' Similar proteins have been identified from
other plants, and they seem to protect plant cells against damage from
freezing and drying. In peaches, either drought or fall dormancy caused
the dehydrin to accumulate, and the amount in a tissue closely followed
the degree of cold hardiness. This long-term research, when combined
with other research underway at the laboratory, is expected to lead to
more frost-tolerant peach trees.
Question. Please identify recent research accomplishments by the
Appalachian Fruit Research Station of significance to the fruit
industry.
Answer.
Molecular Biology and Genetic Engineering of Fruit Trees.--
Transgenic plums showing immunity to plum pox virus were obtained via
genetic engineering.
Genetic and Cultivar Development of Pear and Peach.--Genes for
resistance to viral and bacterial diseases that have devastating
economic impact on grape production each year were transferred into
``Thompson Seedless'' grapes by genetic engineering. The same gene
transfer techniques are being used to develop pear and peach cultivars
resistant to viral and bacterial diseases.
Cold Hardiness and Stress Adaptation in Fruit.--A gene encoding a
``cryoprotective'' protein was isolated from peach bark; manipulation
of the expression of this gene could potentially decrease current tree
fruit losses due to cold temperatures and expand the range of temperate
tree fruits.
Related Costs for Apple Research.--Nine specific cooperative
agreements were initiated with university researchers to address
problems of fruit storage and pesticide reduction.
Utilization of Waste and Byproducts from Aquaculture to Enhance
Economic and Environmental Sustainability.--Hydroponic plant production
cleaned aquaculture wastewater to water quality standards equal to the
original water in the spring source. Hydroponic plant production of
lettuce, strawberry, and basil also generated a gross additional gross
income of $4/ft of greenhouse area while removing a waste product.
Mechanization for Deciduous Tree Fruits and Small Fruits.--In 1995,
a mechanical harvester for fresh market blueberries was developed,
tested, and licensed to a Michigan firm. This same harvesting concept
was used to build a mechanical harvester for processing citrus. The
citrus harvester was built, tested, and shown to be highly effective in
removing various citrus fruits without damage to fruit, tree, or
developing fruit. A unique trellis system for eastern thornless
blackberries was developed that separates fruiting canes from
vegetative canes. This trellis system together with the mechanical
blackberry harvester are able to harvest fresh-market quality
blackberries.
Vegetation and Soil Management in Fruit Production.--A tensiometer
irrigation valve was designed, tested, and patented in 1993. In 1995, a
cooperative research and development agreement was in place with a
Virginia company to commercialize this invention. The tensiometer valve
senses the water content of the soil and opens an irrigation valve when
the soil needs water and closes the valve when wet. It operates without
electricity and only one moving part. It will have application in
horticulture greenhouses, landscape settings, nurseries, and home
gardens. Inert and non-toxic hydrophobic particles reduced disease
incidence and repelled major insect pests of apple and pear.
These reflective particles also reduced water stress. A cooperative
research and development agreement is being negotiated to commercialize
this broad spectrum, non-toxic pest control product.
Improved Deciduous Tree Fruit Production Efficiency and Fruit
Quality Through Integrated Cultural Management.--Selected ground cover
systems or a new plant growth regulator reduced vegetative growth in
apple trees and the number of shoots exhibiting fire blight symptoms.
These findings could lead to improved fruit productivity and reduced
tree losses from fire blight, a major problem in the Appalachian
Region.
Nondestructive Sensors Measuring the Postharvest Quality of
Apples.--A prototype on-line system that non-destructively measures
apple quality has been developed and is being evaluated in cooperation
with an industry partner.
Water Quality Control In Intensive Recycle/Reuse Aquaculture
Production Systems.--Results of a field trial of the ultrasonic waste
feed controller (UWFC) showed that satiation feeding with the UWFC or
by hand produced the same feed conversion and 30-50 percent faster
growth than ration feeding produced. A tagging experiment showed that
growth of rainbow trout stocked at 8-12 cm (within a mixed cohort
system) and harvested at 340 g was not strongly dependent upon initial
length. Adding ozone to the water within a recirculating system was
found to improve microscreen filtration, water quality, and reduce
bacterial gill disease problems.
Question. Please identify additional program and resource
requirements to enhance the productivity of this facility.
Answer. Pest and disease control is the single greatest cost in
fruit production. The impact and productivity of the Kearneysville
research group would be enhanced by strengthening the following areas
of research. (1) Identify, characterize and implement the development
and utilization of natural compounds and microorganisms as biocontrol
agents in preventing or suppressing diseases and pests in pre- and
post-harvest crop production. (2) Expand activities in biotechnology
and the application of genetic engineering technologies in the
development of transgenic plants with improved product quality and
resistance to pests and diseases. (3) Investigate pesticide degradation
and movement in orchard soils under various ground cover management
systems to reduce ground water contamination.
______
Questions Submitted by Senator Leahy
foodborne illnesses
Question. Under the draft research agenda for the Office of Food
Safety and Inspection Services, there are a number of recommendations
for food borne illnesses in humans. What research is the Agriculture
Department currently conducting to address this issue and what level of
funding would be necessary to implement the recommendations for further
research?
Answer. The Agriculture Department is not addressing those
questions from the draft research agenda of the Food Safety and
Inspection Service which relate to food borne illness in humans, that
is, such questions relating to the epidemiology and incidence of human
disease related to food borne pathogens, and the sensitivity of
specific human populations to these pathogens. The minimum funding
necessary to implement these recommendations for further research would
be $10 million.
asian long-horned beetle
Question. Without immediate attention, spread of the Asian Long-
Horned beetle into forested areas of New York, Vermont and
Massachusetts could threaten the important maple sugar and fall foliage
industries of the northeast. Has the Agriculture Department proposed a
research program to investigate and develop potential control
mechanisms for this pest?
Answer. Currently, the State Departments of Agriculture are
attempting to eradicate this insect pest by felling, chopping up, and
burning trees in which the beetle has been found. For example,
contractors hired by New York State started cutting down the first of
up to about 50 trees in February of 1997, from backyards and streets in
infested communities. New York plans to replace the trees with
varieties the beetle doesn't eat and conduct periodic surveys to see if
the insect is in other locales. Other states that may become infested
could use similar tactics. USDA will add $500,000 to efforts in New
York to replace trees being removed and destroyed because of the
beetle. The state and city will each expend $1 million. USDA Animal and
Plant Health Inspection Service and Forest Service have requested that
the public contact them if they suspect an infestation in their area.
USDA Animal and Plant Health Inspection Service (APHIS) and Forest
Service have also requested that ARS determine what natural enemies
might exist in the pest's native habitats of Japan, Korea and Southern
China through its European Biological Control Laboratory in
Montpellier, France. Cornell University scientists are also studying
the situation. No large scale research effort has been formulated as
yet.
Question. What level of funding is necessary to undertake such a
research project?
Answer. If the pest cannot be prevented from spreading and
eradicated, then a research project that would include studies on the
biology and ecology of the pest, as well as development of effective
IPM tactics, should be initiated. Such a project should be funded at a
minimum of $600,000.
Question. Would the Department include and/or delegate the project
to a university research program?
Answer. The Department would include appropriate university
research scientists as partners in addressing this pest.
Question. Will some of the $2.5 million requested increase in
support of emerging disease and exotic pests be used to address the
Asian Long-Horned beetle?
Answer. ARS has requested a $5,000,000 increase to address emerging
diseases and exotic pests in fiscal year 1998. Of the $5,000,000
requested, ARS plans to allocate $2,500,000 for studies on emerging
plant diseases, $1,100,000 for studies on emerging exotic diseases of
livestock, and $1,400,000 for studies on emerging domestic and zoonotic
diseases of livestock. ARS has not planned to use these funds for
research on the Asian longhorn beetle.
Question. Outside of the U.S. Forest Service, please list the
research projects being conducted by the Department on forestry issues.
Answer. ARS does not conduct forestry research per se. ARS does,
however, conduct some research that can be related to forestry issues
as follows: Agroforestry Systems for the Family Farm--Booneville, AR;
Potentials for Agroforestry--Beckley, WV; Systematics of Flies of
Importance in Biocontrol, Agricultural Crops, and Forests--Beltsville,
MD; Genetic Improvement of Trees for Soil and Water--Mandan, ND;
Genetics and Germplasm Evaluation of Landscape Woody Plants--
Washington, D.C.; The Development of Pest-Resistant Landscape Trees to
Enhance Environment and Reduce Use of Pesticides--Washington, D.C.;
Development of Sustainable Urban Agro-Systems and Biocontrol Strategies
for Gypsy Moth and Turf Pests--Beltsville, MD. Agroforestry is a land-
use system that attempts to optimize the benefits from the interactions
created when trees and/or shrubs are deliberately combined with crops
and/or livestock. ARS agroforestry research is focused more on the crop
and livestock components than on trees and shrubs. Less directly, but
still potentially related to forestry, is ARS' research on trees for
windbreaks, arboretums, and horticultural applications. Some of the
research findings on genetics, diseases, and biocontrol may be
applicable to forestry issues. Colleges of Agriculture at many land
grant and other universities include Forestry Departments and;
therefore, CSREES conducts research on forestry related issues.
Individual researchers in ARS cooperate with CSREES scientists on
specific topics related to tree and forestry issues, but ARS is not in
a position to address the CSREES forestry research program.
Question. The President's budget request includes an increase of $1
million to support the Grazing Lands Initiative. What will this
additional funding be used for? How will the funding be dispersed? Are
there research projects proposed for specific regions?
Answer. The increase of $1 million to support grazing lands
research will be utilized to strengthen the ARS rangeland and pasture
research program in the areas of utilization and natural resource
conservation. This funding will be directed to the ARS laboratories at
El Reno, Oklahoma ($400,000) and University Park, Pennsylvania
($300,000) for research to determine the impact of pasture design and
grazing animals on the quality of water emerging from watersheds, and
to develop pasture management systems that will optimize water quality
and pasture productivity. In addition, $300,000 will be directed to ARS
research at Las Cruces, New Mexico, to develop low-input technology for
seeding native grasses and shrubs on degraded rangelands and riparian
areas. Current methods of reseeding rangeland require mechanical
seedbed preparation, which is costly and encourages erosion. Methods of
distribution of seed which do not disturb soils or require expensive
equipment include overland water flow during rainfall events, wind
dispersal, and distribution by cattle themselves after passing through
the digestive tract.
Question. The President's request includes an increase of $2.5
million for research in support of emerging exotic diseases in
livestock. The focus of this increase is on limiting the introduction
of exotic disease. What activities has the Department undertaken to
develop a tracking system for livestock to address the spread of
disease once it has been introduced?
Answer. The ARS animal health research program develops diagnostic
tests and vaccines for monitoring or tracking livestock disease. ARS
works closely with APHIS and producer groups to use new diagnostic
tests to track spread of disease. This type of research has been
particularly important recently in detecting new domestic strains of
bovine viral diarrhea and porcine reproductive respiratory syndrome.
ozone standards
Question. In response to the U.S. Environmental Protection Agency's
proposed tighter ozone and fine particulate standards, agriculture
groups have asserted that the new standards would have a detrimental
impact on farm operations. Has the Department undertaken any research
projects to assess these claims?
Answer. ARS is pursuing an aggressive research program to assist
U.S. farmers in meeting air quality standards, but is not doing
research on claims that new air quality standards would adversely
affect farm operations.
integrated pest management
Question. How much funding is the Department directing towards
Integrated Pest Management and environmentally-friendly techniques?
Answer. The information on the funding for Integrated Pest
Management and related programs by USDA agencies is provided for the
record.
Agency Fiscal year 1997
AMS..................................................... $2,556,000
APHIS................................................... 34,493,000
ARS..................................................... 75,612,000
CSREES:RES.............................................. 58,441,000
CSREES:EXT.............................................. 13,997,000
ERS..................................................... 2,500,000
FS...................................................... 16,117,000
NASS.................................................... 5,700,000
NRCS.................................................... 6,617,000
--------------------------------------------------------
____________________________________________________
Total............................................. 216,033,000
Question. What is the status of the USDA goal to have 75 percent of
U.S. agriculture using IPM?
Answer. Upon the commencement of USDA's Integrated Pest Management
(IPM) initiative in 1994, the Department's Economic Research Service
estimated that American farmers have adopted IPM methods on nearly half
of all fruit and nut, vegetable, and major field crop acreage. Total
land used for crops in the United States is estimated at 332 million
acres. The level of use of IPM practices depends on the crop, the
region and the pest problem. The National Agricultural Statistical
Service is currently conducting national surveys of major field crops,
and selected fruits and vegetables to ascertain levels of IPM adoption
and chemical use. The results of the first of these surveys will be
available in early 1998. Much more work is needed to refine and
implement a sound measurement methodology. After the Economic Research
Service (ERS) report was published in 1994, additional studies have
been completed by Department analysts and outside experts, and most
support ERS' conclusion that 50 percent or more of the nation's crop
acreage is currently managed under at least a ``low'' level of IPM.
However, several analyses, including the one published by Consumers
Union in Pest Management at the Crossroads, have concluded that
considerable more work is needed to help producers move along the IPM
continuum to the ``medium'' and ``high'' levels. We believe that an
accelerated effort is needed, and warranted, to help growers reduce
reliance on high-risk pesticides and enhance the sustainability of farm
operations.
Question. What research activities are being undertaken to help
farmers reach this goal?
Answer. A variety of interagency partnership research activities
are being undertaken to provide the necessary components for adoption
by farmers into an integrated pest management systems approach.
Practices and methods being developed vary among crops and among
different regions of the country. For example, in some regions, the
introduction of parasites or predators, which naturally prey on
particular pests are being developed for introduction into infested
areas. In other areas, crop rotation and planting date tactics,
resistant crop varieties, and cultural practices are being developed
for use in combination with other methods, such as microbial
biocontrol, mating disruption, and sterile insect technology, to manage
pests before they reach damaging levels. The pests that are targeted by
these studies include insects and mites, plant pathogens and nematodes,
and weeds. The control tactics may be used in greenhouse, on crop
acreage, and in urban gardening settings.
Under the USDA IPM initiative all the activities of the agencies
and the land-grant system State Agricultural Experiment Stations have
been pulled together into a coordinated effort that is more efficient
and more effective in getting new knowledge and technology resulting
from the research activities into the hands of the farmers. The
priority needs identified by state and regional IPM teams are being
used to orient area-wide IPM programs conducted by the Agricultural
Research Service, IPM research conducted at State Exp. Stations and
Extension IPM programs. All of these activities are being directed to
meet the educational needs of farmers and their advisors for IPM
adoption.
Question. What research activities is USDA undertaking to develop
alternatives to comply with the Food Quality Protection Act?
Answer. The USDA recognizes the critical need to develop
alternatives as the Food Quality Protection Act is implemented and
needs for pest management alternatives are identified. The USDA IPM
Initiative is a critical activity for addressing pest management needs
identified by farmers and others through a comprehensive needs
identification and priority process involving every state. A number of
major research and education programs are currently underway to develop
and deliver alternative management methods to producers as increasing
broad restrictions on pesticide use and continuing development of pest
resistance occur. For example, the ARS area-wide IPM program, in
partnership with CSREES and the land-grant university system, other
state and federal agencies, and the private sector are undertaking
research on sustainable systems including biological, cultural and
other biorational technologies. CSREES provides funds to support
mission-linked research that is focused on biological control, host
resistance, cultural control and applied ecology, and management of
resistance. CSREES also supports IPM education and training programs
needed to transfer pest control alternatives to farmers, crop
consultants, and other IPM end-users via Cooperative Extension Service
programs in every state. The Food Quality Protection Act includes
language requiring the Secretary of Agriculture to ensure support for
minor-use pesticide research. ARS and CSREES in partnership with the
Land Grant Universities carry out research under the IR-4 program which
supports the use of registered pesticides and biological control agents
for minor crops where there are no economic incentives to do so by
private industry. Regulatory action prompted by the Food Quality
Protection Act has increased the burden on this program in terms of
alternative control materials compatible with IPM systems.
pear thrips research
Question. The fiscal year 1997 Senate Agriculture Appropriations
report provides $78,000 for Pear Thrips research in Vermont and
includes the following report language: ``ARS application of project
funds for overhead expenses are not to exceed 10 percent of the amount
appropriated for the project.'' How much of the original $78,000 award
has ARS directly granted to the research institution? Please provide a
breakdown of how the balance of the $78,000 award has been used by ARS.
Answer. The fiscal year 1997 funding level for pear thrips research
in the northeastern U.S. is $80,300. Of the $80,300 provided to ARS,
$45,000 is provided under a cooperative agreement to the University of
Vermont. The emphasis of the Vermont program has been to use
entomopathogenic fungi to control pear thrips in sugar maple
plantations. The remaining $35,300 is allocated to Ithaca, NY to
directly support activities conducted by the pear thrips program in
Vermont and has included the cryogenic storage of fungal pathogen
isolates important to the program, the taxonomic identification of
collected isolates, molecular systematics research on associated fungal
pathogen species, assistance with fungal pathogen isolation and
culturing techniques, and other similar support services.
______
Question Submitted Senator Faircloth
project termination
Question. The White House budget proposal eliminates 71
Agricultural Research positions. I just learned that the Agriculture
Department contacted some of those researchers and, in essence,
directed them to accept new posts. I understand that the Department
told these researchers that a failure to accept the new posts will
result in possible unemployment if Congress fails to restore their
current positions in the appropriations process. I am informed, in
fact, that several of these researchers were told that reluctance to
accept the new posts will jeopardize their careers. I am thus concerned
that some of these scientists construed these job ``offers'' as an
effort to ensure that their current posts are vacated prior to
congressional action on the budget and possible restoration of these
positions (these researchers were told that these posts will not be
left open through the fiscal year). However, if these people accept the
new positions, they will be unavailable to return to their current
posts if Congress opts to restore funds for the positions. Their
decisions will appear voluntary, but, as you know, these circumstances
paint a rather different situation. As you know, these decisions are
the province of the Congress, and it appears that the Department is in
the midst of an effort to undermine the congressional prerogative. How
does the Department justify these actions?
Answer. The proposed fiscal year 1998 budget for ARS identifies 71
research projects to be terminated to help fund several new research
initiatives. New positions associated with the new research initiatives
will be established that will offset those positions associated with
projects that will be terminating. In addition, there are a number of
available unencumbered positions currently in the Agency as a normal
process of attrition. Managing the transition from positions associated
with project terminations to new or existing positions poses many
challenges. There is no provision for an orderly transition because we
will not know what the content of our fiscal year 1998 budget will be
until final legislative and executive approvals occur, usually in
September. We are very sensitive to the effect these actions are having
on the specific projects and personnel involved. We are making every
attempt to plan for the reassignment of these impacted employees to
other available positions. To the greatest extent feasible, we are
attempting to coincide the timing of the relocation of our researchers
with the beginning of the 1998 fiscal year so that in those situations
where Congress restores projects, those decisions can be reversed. No
employee was told that their job would be in jeopardy. Whether an
employee voluntarily elects to transfer to another position in the
Agency is independent of the Agency's commitment to maintaining a given
project. As long as appropriated funds are in the ARS budget for the
project, however, ARS is obligated to maintain the program. If
placement within the local area is not possible, we will be offering
reassignments to vacant positions at other ARS locations to all
permanent employees. For those who are unable to relocate, we will
provide counseling and assistance in finding jobs in the local area.
Unfortunately, this uncertainty and inability to develop definitive
plans presents many dilemmas for our impacted employees from a personal
perspective. Most of them will not know what ultimately will happen to
them until final action is taken on the budget.
______
Questions Submitted by Senator Grassley
biofuels
Question. How has your relationship with the Department of Energy
progressed during the past year with regard to biofuels? What new areas
are being researched in science and economics? What are the
Department's plans for this coming year to increase cooperation with
DOE on biofuels? What is the status of the Memorandum of Understanding?
Answer. During the past year ARS has had 2 workshops with DOE and
its laboratories. The areas covered were fuel ethanol research and
biodiesel research. The participants also set up a joint steering
committee to plan for future coordination at the research level, began
sharing materials, and agreed to implement a scientist exchange. DOE's
National Renewable Energy Laboratory (NREL) has provided their new
biomass fermenting organism to 2 ARS Research Centers, both of which
are concerned with applying that technology to making ethanol from corn
biomass. The steering committee will also facilitate sharing plans.
ARS also has a CRADA with NREL and the Fats and Protein Research
Foundation to examine the use of biodiesel feedstocks such as animal
fats and restaurant grease, enzymatic hydrolysis, and using branched
chain alcohols as biodiesel fuel.
Question. Has the Department designated a single person to
coordinate ethanol, and separately biodiesel, research Department-wide?
Who is that person? If not, why has the Department chosen that course
of action?
Answer. The Associate Deputy Administrator for Crop Production,
Product Value, and Safety coordinates ethanol and biodiesel research
for ARS. The Director, ERS-Office of Energy and New Uses has
responsibility for the Department.
biofuels
Question. Will the Office of Energy receive the same amount of
funding as last year, or has the Department asked for increased
funding? Does the Office of Energy still have the ability to contract
out for special studies? How much money has been allocated for this
purpose? If not, why has the Department curtailed funding and activity
in this area?
Answer. In fiscal year 1996, the Office of Energy and New Uses was
funded for $849,000. In fiscal year 1997, the estimated funding is
$499,000. The Office, as a part of ERS, does have the authority to
contract out for special studies. Thirteen thousand has been allocated
for nonsalary expenses. Funding has been reduced in this area for two
reasons: First, ERS is moving and must pay some of the moving expenses
out of its nonsalary expenses. Second, the budget allocation process
was redesigned by me to establish a central, flexible pool of funds
from the Agency's nonsalary expenses to be allocated by collective
management decisions, rather than portioning out the entire Agency
allocation to ERS divisions and office at the start of the year.
Question. Will the Department maintain, at least, level funding for
ethanol research at ARS and CSREES? If not, why not?
Answer. ARS proposes level funding for ethanol research at $5.2
million. CSREES estimates a decline from a current estimate of $2.9 in
fiscal year 1997 to $1.8 in fiscal year 1998 due to reductions proposed
for special research grants.
Question. Has the Department assisted the biodiesel industry in
their efforts to achieve alternative fuel status in Department of
Energy regulations? In what way? Will the Department increase these
efforts? If needed, will the Department support changes in EPACT
favorable to biodiesel?
Answer. ARS has and continues to foster biodiesel development from
the early 1980's to its present programs in fiscal year 1997. Specific
research that has been conducted includes the following: feedstocks,
e.g., soy oil, tallow, recycled greases and soap stocks; fuel quality
assessment to demonstrate that biodiesel and blends of biodiesel (B20)
are energy equivalent to petrodiesel, substantially similar (sub sim)
regulations; and engine testing as well as emission testing of neat
biodiesel and B20. ARS plans to maintain its current level of effort on
this issue. DOE is the lead agency determining implementation of EPACT
rules and regulations. USDA is prepared to provide whatever information
it has to DOE on the net benefits of biodiesel to facilitate its use.
If the changes considered in EPACT are legislative, then an
Administration position would need to be developed depending upon the
nature of the change.
Question. What USDA agencies are involved in value added research?
What is the proposed budget for new uses? How does this differ from the
previous budget request?
Answer. The USDA agencies involved in value added research and
their proposed budgets for new uses are follows:
[Dollars in thousands]
------------------------------------------------------------------------
Fiscal year--
Agency -------------------------
1997 funds 1998 funds
------------------------------------------------------------------------
Agricultural Research Service................. $82,368 $76,326
Alt. Agric. Research and Comm. Corp........... 7,000 10,000
Cooperative State Research, Education, and
Extension Service............................ 28,701 18,885
Economic Research Service..................... 1,274 1,274
Forest Service................................ 9,482 9,482
Office of Operations.......................... 49 51
-------------------------
Total................................... 128,874 116,018
------------------------------------------------------------------------
The fiscal year 1998 budget for USDA reflects a decrease of $12.9M
in new uses research.
office of energy and new uses biofuels function
Question. Will the Office of Energy be capable of fulfilling its
function of advocating for biofuels under this budget request?
Answer. The Office of Energy and New Uses is responsible for
assisting the Secretary in developing departmental energy policy and
coordinating departmental energy programs and strategies. Secretary
Glickman has made clear that he has a policy of encouraging the
development of an agriculturally-based biofuels industry. The Office
will continue to support the policy position of the Secretary of
Agriculture under the current budget request.
______
Questions Submitted by Senator Dorgan
project termination
In its evaluation of research projects, ARS used a subjective point
system to screen which projects to consider and subsequently recommend
for termination. The data collected through this subjective review has
not been made available to Congress. In fact, Congress has been told
that the data developed through this screening process has been
destroyed because it was part of a ``pre-decision'' review. Congress
must have such information available not only to determine the
effectiveness of the screening process, but also to consider whether
ARS priorities are consistent with the public policy objectives
established by Congress.
Question. Since the screening process was an essential component of
determining which projects would be considered for termination, what is
the purpose of withholding this data from Congressional review as it
considers budget and research priorities for USDA?
Answer. Our intent was not to withhold information; the initial
ratings of research projects based on the ARS Project Evaluation Guide
were only the first step in the process to identify projects for
proposed termination. All projects that fell into the lower quartile
were further scrutinized and evaluated by the ARS top management team.
This collection of information which included the consensus scores plus
the scientific and programmatic knowledge and experience of the ARS
management team, was then used to select those projects that were
judged to be less critical to agriculture from a national perspective
at this point in time, in relation to all other research ongoing in the
Agency. The initial data, without the benefit of the followup analysis,
debate, and judgmental inputs that occurred to develop the final list
of proposed project terminations could be misinterpreted and therefore
be potentially detrimental to those individual employees and programs
implicated.
The original project scores were not conscientiously destroyed but
simply were not retained in computer files after they had served their
purpose in the initial part of the overall evaluation process.
The 1996 farm law established a ``Strategic Planning Task Force''
which was given the responsibility of reviewing ``all currently
operating agricultural research facilities constructed in whole or in
part with Federal funds,'' as well as proposed future research
facilities. These facilities were to be reviewed in the context of the
development of a ten-year strategic plan which reflects ``both national
and regional perspectives for development, modernization, construction,
consolidation, and closure of Federal agricultural research
facilities.''
The fiscal year 1998 recommendation by ARS to close four research
facilities, does not in my view give equal consideration to the
importance of research from both national and regional perspectives.
The ARS fiscal year 1998 budget proposal precludes the ``Strategic
Planning Task Force'' from considering these four facilities in its
review, thereby prejudging the outcome of this process.
Question. Based on the 1996 farm law directive, would it not be
more appropriate for ARS to postpone any facility closures until the
Strategic Planning Task Force is able to consider all currently
operating agricultural research facilities from both national and
regional perspectives and make its recommendations to the Secretary and
Congress?
Answer. The Federal Agriculture Improvement Act of 1996 established
a Strategic Planning Task Force to explore a host of issues, over the
next several years, regarding ARS and other Federally funded research
facilities. It will be approximately two years before the task force
submits its recommendations to Congress and the Department. We hope
that Congress, USDA, ARS, and the Land Grant University system will all
benefit from the work of this task force. But in the interim, we will
have to continue working within the limits of the resources available
to adjust and redirect our research program to address emerging
problems and new initiatives established by the Administration, the
Department, and by Congress.
The question of which programs and locations to maintain and which
ones to phase out involved many complex issues. Although the ARS budget
has increased gradually over the last 20 years, in real terms there has
been little if any growth. In addition, new programmatic demands are
constantly being made on the agency as the high priority needs of
American agriculture change. In this tight budget environment, the
agency has to constantly reevaluate what it is doing and what it needs
to be doing. That process makes us identify and discontinue areas of
research that are deemed to be less critical at the present time. One
of the factors we keep in mind when making these decisions is our
desire to maintain research capabilities in all regions of the country.
The facility closures contained in the President's fiscal year 1998
budget are driven by programmatic and budgetary considerations and not
by issues related primarily to the facilities themselves.
There appears to be a shift in emphasis within USDA away from basic
production-related agricultural research. Currently, production
agriculture is being called upon to be more environmentally sensitive
and sustainable, while also being internationally competitive. In order
to achieve these objectives, basic production research needs to pay
particular attention to the specific regional ecosystems in which
farmers and ranchers operate.
Question. To what extent were these objectives particularly as they
relate to regional ecosystems considered in the project evaluation
process by USDA in its recommendation to terminate 71 projects and four
ARS facilities and specifically, the Mandan, North Dakota ARS facility?
Answer. ARS research priorities continue to reflect the
sustainability, environmental harmony and international competitiveness
aspects of production agriculture. The process used by ARS to evaluate
research projects included a consideration of similar research being
conducted elsewhere in the Agency that would have applicability to
those regions or areas where research projects would be terminated. For
example, the three projects proposed for termination at Mandan focus on
water management systems, soil management, and forage germplasm.
Similar research on water management is being conducted at ARS
locations in Akron, Colorado; Sidney, Montana; and Bushland, Texas.
Research related to soil management is conducted at Lubbock, Temple,
and Weslaco, Texas; and Morris, Minnesota, and research to improve
forage germplasm is carried out at ARS in Lincoln, Nebraska, and Logan,
Utah. ARS researchers at these locations have the capacity to extend
and apply their work on a broad regional basis to include the Northern
Great Plains.
USDA is in the process of terminating ARS projects and facilities,
as well as embarking upon a study of research capacity through the
Strategic Planning Task Force. At the same time funds from prior
appropriations and other sources have been set aside or held in reserve
for the modernization, expansion, refurbishing, etc. of ARS offices and
facilities.
Question. Please identify the amount of funding which is being held
by USDA for such purposes, the sources of such funding, and the ARS
facilities for which such funding is being held. Also, please
distinguish between the funding held for administrative offices and
laboratory facilities.
Answer. The agency is currently holding in reserve a total of
$25,480,000 of prior appropriations to the Buildings and Facilities
account. These amounts are being held until sufficient funds are
accumulated for a design or construction contract award. Full funding
of a design or construction project is required before a contract can
be awarded. Of the total, $3,065,000 is being held for the
modernization efforts at the National Center for Agricultural
Utilization Research, Peoria, Illinois ($1,545,000) and U.S. Grain
Marketing Research Laboratory, Manhattan, Kansas ($1,520,000). The
remaining $22,415,000 is being held for construction of the following
replacement laboratories: U.S. Horticultural Crop and Water Management
Laboratory, Parlier, California ($2,630,000); U.S. Vegetable
Laboratory, Charleston, South Carolina ($12,453,000); National Center
for Cool and Cold Water Aquaculture, Leetown, West Virginia
($6,000,000); Poultry Disease Laboratory, Athens, Georgia ($936,000);
and the Water Conservation and Western Cotton Research Laboratory,
Maricopa, Arizona ($396,000). It is not possible to distinguish the
agency-held funds by laboratory or office space usage.
------------------------------------------------------------------------
Replacement Modernization
laboratories projects
------------------------------------------------------------------------
Parlier, CA............................. $2,630,000 ..............
Athens, GA.............................. 936,000 ..............
Charleston, SC.......................... 12,453,000 ..............
Leetown, WV............................. 6,000,000 ..............
Maricopa, AZ............................ 396,000 ..............
Peoria, IL.............................. .............. $1,545,000
Manhattan, KS........................... .............. 1,520,00
-------------------------------
Total............................. 22,415,000 3,065,000
------------------------------------------------------------------------
______
Economic Research Service
Questions Submitted by Senator Cochran
travel
Question. Please provide the Committee with a breakdown of ERS
actual travel costs in fiscal year 1996.
Answer. ERS travel costs in fiscal year 1996 were $1,184,000. Of
this amount $621,000 or percent was paid by ERS appropriations, and
$563,000 or 48 percent was paid from reimbursements from other
government agencies. The primary reimbursement source for ERS travel is
the Foreign Agricultural Service for technical assistance studies in
Eastern Europe.
Question. Please identify foreign travel obligations for fiscal
years 1994, 1995, and estimates for fiscal years 1996 and 1997.
Answer. A table that shows travel obligations paid from ERS
appropriations and reimbursement funds will be submitted for the
record.
[The information follows:]
Economic Research Service Foreign Travel Obligations
Fiscal year Amount
1994.......................................................... $383,000
1995.......................................................... 407,000
1996.......................................................... 607,000
1997 (est.)................................................... 700,000
Question. How many ERS personnel were engaged in foreign trips in
these years and for what purposes?
Answer. A table that shows the number of ERS personnel engaged in
foreign trips will be submitted for the record. The primary purpose of
these trips was to provide technical assistance to Former Soviet Union
countries and Eastern Europe countries to facilitate their transition
toward market economies. Commodity outlook and policy analysis training
in the form of seminars and hands on experience was provided.
ERS travel to Eastern Europe and the FSU has been part of a program
to provide technical assistance to help develop and institutionalize
the capacity to conduct and disseminate market reporting, analysis and
forecasting for key agricultural commodities. The funding for these
activities came initially from AID (SEED Act), and subsequently from
USDA's Emerging Democracies Program. These trips have been very
successful. Programs for agricultural market analysis and forecasting
now exist as self sustaining programs in Poland, the Czech Republic,
and Slovakia, where ERS programs are ending. ERS training in Russia led
to the establishment of successful reporting and analysis programs in
20 oblasts, and provided the model for a larger World Bank loan (ARIES)
to allow the Russians to spread the system to all oblasts. The
transition from technical assistance to a Russian led program was a
hallmark of the recent Gore-Chernomyrdin meeting. Programs in Bulgaria,
Romania and Ukraine are still ongoing, but have already led to a series
of market analysis and forecasting reports which are produced regularly
and widely disseminated.
Improved transparency and availability of market information has
benefited the US--both public and private sector--as well as the
recipient countries. The technical assistance activities have
significantly increased the quantity and quality of information
available to the United States on these countries' agriculture. The
Foreign Agriculture Service has included reports produced by these
countries on its website for use by the private sector and other
government agencies and organizations. Current market assessments and
forecasting of likely future conditions has helped to improve the trade
and investment climate and provides private sector with valuable
information on which to base its decisions. The countries themselves
also benefit. Better information on their markets reduce costly and
counter-productive interventions by governments, and has been important
to countries in conducting the analysis needed to meet international
trade obligations. The trips have also helped develop a network of
well-trained economists and market analysts who are able, in turn, to
provide additional training in their own countries and in other
emerging democracies not covered by the ERS program.
In fiscal year 1997, a group of ERS employees will be participating
in the American Agricultural Economics Association meetings in Toronto,
Canada.
[The information follows:]
Economic Research Service Personnel Engaged in Foreign Trips
Fiscal year Personnel
1994.............................................................. 210
1995.............................................................. 305
1996.............................................................. 243
1997 (est.)....................................................... 313
gpra initiative description
Question. Would you please briefly describe the Administration's
initiative to develop performance measures and indicators that can be
employed to carry out program assessments mandated by the Government
Performance and Results Act. What is the total cost of this initiative
in fiscal year 1998 and future years? How much is USDA to contribute in
each of these years?
Answer. The initiative ``Provide Statistical Expertise for GPRA
Measurement'' draws upon the expertise of eight federal agencies to
develop performance measures and indicators to assist federal
government agencies in meeting their GPRA requirements. The overall
initiative statement explains a number of reasons for undertaking the
activities. Many agencies have been struggling with measurement
problems associated with outcome based performance. Consistent
concepts, scales, and sampling methods are critical for reliable
performance-based comparisons among Departments. Many Federal services
contain common dimensions--e.g. courtesy, timeliness, knowledge--that
are currently measured on different scales that undermine useful
comparisons. Many agencies have asked for help in developing a catalog
of tested questions and satisfaction scales. The American Consumer
Satisfaction Index is the only nation-wide standardized satisfaction
measure that permits consistent comparison of private sector products
and services with Federal agency products and services.
The total budget request for the initiative is $3.55 million and is
composed of the following parts: a.--$1.6 million to develop or refine
comparable ``turn-key'' data collection and measurement resources for
use by agencies throughout the Government; b.--$0.75 million to develop
standardized questions and satisfaction scales for common elements of
Federal services; and c.--$1.2 million to add 10 Federal agencies to
the American Consumer Satisfaction Index. USDA, through the
participation of ERS and NASS, is requesting a total of $665,000.
gpra initiative time frame
Question. Shouldn't government-wide performance measures and
indicators be available for agencies to use in the development of their
strategic plans, goals and measures? What is the proposed time frame
for the development of these statistical measures and indicators?
Answer. Development of measures and indicators is inextricably tied
to the goals set. The benefits from the outcome oriented GPRA
management approach depends first upon setting the correct goals.
Challenges agencies governmentwide face in setting goals include: a.--
balancing the relative importance of cost effective outcomes versus
effectiveness at any cost; b.--setting goals to obtain outcomes which
the agency can definitely control versus broader policy outcomes; and
c.--balancing goals relative to customer satisfaction measurement--
e.g., responsiveness and courtesy shown to customers--with basic goals
for the program--e.g., retiring most environmentally sensitive lands at
the lowest cost to U.S. taxpayers. Setting simplistic quantity goals
for people served and answers provided may undermine the quality of the
service and the answers. The choice of goals must define the measures
and indicators used rather than allow the ease of measurement dictate
the formulation of the goals. As agencies government-wide make progress
in developing their strategic plans and setting goals, the statistical
agencies involved in the initiative will be charged with finding what
and how common performance measures and indicators can be developed to
improve comparisons between different agencies' progress towards
similarly defined goals. Identifying commonality in goals across the
complex and sometime apparently conflicting array of outcomes sought
will not be easy. Work on development of these statistical measures and
indicators will begin in fiscal year 1998. Because all agencies will
have developed their strategic plans by this time, the GPRA initiative
will help agencies to refine and improve their goals and measures.
Furthermore, the availability of these strategic plans will greatly
assist ERS in identifying common goals in the various plans and allow
ERS to focus our efforts.
ers role in gpra initiative
Question. No staffing increases are proposed. What specifically
will be funded with $125,000 in ERS funding and the $540,000 in NASS
funding requested for fiscal year 1998?
Answer. The additional funding for ERS and NASS would allow ERS to
participate regarding performance measurement issues. NASS would be
involved in all three phases of the initiative including formulation of
sampling plans, development of standard survey instruments and scales,
and work with the American Customer Satisfaction Index on development
of measures for farm/rural programs and nutrition programs.
other participants in gpra initiative
Question. Which other six federal statistical agencies will
participate in this initiative, in addition to the Economic Research
Service and the National Agricultural Statistics Service? Is there a
lead agency?
Answer. In addition to ERS and NASS, the other federal agencies
participating in this initiative include the Bureau of Labor
Statistics, Bureau of Transportation Statistics, Census, Energy
Information Agency, National Center for Health Statistics, and the
Statistics of Income in the Internal Revenue Service. The Interagency
Council on Statistical Policy, chaired by OMB's Chief Statistician,
will determine the most cost-effective tasks and division of labor with
inputs from the President's Management Council and OMB Resource
Management Officer's staff on priority objectives.
______
Questions Submitted by Senator Grassley
usda-doe biofuels collaboration
Question. How has your relationship with the Department of Energy
progressed during the past year with regard to biofuels? What new areas
are being researched in science and economics? What are the
Department's plans for this coming year to increase cooperation with
DOE on biofuels? What is the status of the Memorandum of Understanding?
Answer. The Department of Agriculture--USDA--has developed a close
working relationship with the Department of Energy--DOE--on biofuels
activities. For example, during the past year, the Agricultural
Research Service--ARS--along with the Economic Research Service's--
ERS--Office of Energy and New Uses have had two workshops with DOE and
its laboratories to develop collaborative scientific activities. The
areas covered were ethanol research and biodiesel research. The
participants also set up a joint steering committee to plan for future
coordination at the research level, to began sharing materials, and
agreed to implement a scientist exchange. DOE's National Renewable
Energy Laboratory--NREL--has provided their new biomass fermenting
organism to two ARS Research Centers, at Peoria, Illinois and Wyndmoor,
Pennsylvania. These labs plan to apply that technology to experiment
with making ethanol from corn biomass. The steering committee will also
facilitate sharing and coordinating strategic plans. ARS also has a
cooperative research and development agreement with NREL and the Fats
and Protein Research Foundation to examine the use of biodiesel
feedstocks such as animal fats and restaurant grease, the use of
enzymatic hydrolysis technology for making biodiesel fuel, and the use
of branched chain alcohols as biodiesel fuel.
The Forest Service is collaborating with the Quincy Library Group
in California and DOE and its NREL lab to develop a feasibility study
that includes ethanol as an option for disposal of wood waste from tree
thinning. The Forest Service and DOE are also developing hybrid poplars
on conservation reserve land in the north central region for use as an
energy source for electric generation. One power company has already
contracted with farmers to purchase their wood when it reaches maturity
in 6 to 10 years. Oak Ridge and ARS have developed a new switchgrass
variety, Shawnee, that combines higher forage value for livestock with
high biomass yields. Finally, DOE and USDA cosponsored a request for
proposal for a biomass power for rural development project to
demonstrate and commercialize new biomass for power technology
agencies. As part of the request for proposal, the Rural Utilities
Service, Farm Service Agency, and Natural Resource and Conservation
Service in USDA offered to use existing programs and authorities to
help facilitate this project. Three awards were made in New York,
Minnesota, and Iowa in response to the request for proposals.
Ongoing economic research includes a project with DOE and the
University of Tennessee to use an agricultural intercommodity model to
evaluate how an expanding energy crop market would affect agricultural
food and fiber markets and farm income. In addition, USDA is
collaborating with DOE to update the net energy balance of corn ethanol
and to look at the climate change emission benefits and is also working
with DOE's NREL lab to examine the transition economics of moving from
a corn-based to a biomass-based ethanol industry. USDA and DOE have
nearly completed a life-cycle analysis of biodiesel's net environmental
benefits. The next step will be to monetize the benefits in an economic
analysis. USDA and DOE are cooperating with the Environmental
Protection Agency--EPA--on an analysis of the effects of using
oxygenates in gasoline on toxic emissions. USDA, DOE, and EPA are also
participating in a benefit-cost analysis of the Oxygenated Fuels
Program with the White House Office of Science and Technology Policy.
All of these projects are ongoing into the coming year.
ERS and DOE analysts will continue to evaluate the short-run and
long-run marketing opportunities for biofuels response to the changing
economic and policy environment. The Department will also take a fresh
look at existing programs and authorities that could complement DOE
biofuels efforts.
The Memorandum of Understanding with DOE on biofuels research
lapsed this past January. Nevertheless, USDA and DOE are continuing
close coordination and mutual research on biofuels issues as I have
discussed.
usda biofuels coordination
Question. Has the Department designated a single person to
coordinate ethanol, and separately biodiesel, research Department-wide?
Who is that person? If not, why has the Department chosen that course
of action?
Answer. Yes, Dr. Roger Conway, Director of the ERS Office of Energy
and New Uses has overall responsibility for coordinating energy and
biofuels research for the Department. Most agencies within the
Department also have an energy contact person.
office of energy and new uses funding
Question. Will the Office of Energy receive the same amount of
funding as last year, or has the Department asked for increased
funding? Does the Office of Energy still have the ability to contract
out for special studies? How much money has been allocated for this
purpose? If not, why has the Department curtailed funding and activity
in this area?
Answer. In fiscal year 1997, the Office of Energy and New Uses has
been funded at $544,000. Of that amount, $58,000 has been allocated for
non-salary expenses that may include contracts for special studies. It
is likely that another $45,000 for non-salary expenses will be
allocated to the Office in the last quarter of the fiscal year.
Assuming a total $103,000 of non-salary funds is ultimately available
to the Office, it would have a more than proportionate share of such
agency resources: with about one percent of the staff, it would claim
10 percent of the agency's non-salary expenses. With the Departmental
reorganization, the Office of Energy and New Uses becomes a component
of the Economic Research Service, a move that facilitates the ability
of the Office to draw on the agency's analytical resources and, indeed,
it has. Consequently, the need for non-salary funds to contract for
special studies should decrease commensurately. The allocation for
fiscal year 1998 has yet to be determined.
ars and csrees ethanol funding
Question. Will the Department maintain, at least, level funding for
ethanol research at ARS and CSREES? If not, why not?
Answer. ARS proposes level funding for ethanol research at $5.2
million. CSREES estimates a decline from a current estimate of $2.9
million in fiscal year 1997 to $1.8 million in fiscal year 1998. The
decline in the fiscal year 1998 estimate reflects the reduced level of
funding for Special Research Grants in the CSREES 1998 President's
Budget Request.
usda biodiesel support
Question. Has the Department assisted the biodiesel industry in
their efforts to achieve alternative fuel status in Department of
Energy regulations? In what way? Will the Department increase these
efforts? If needed, will the Department support changes in EPACT
favorable to biodiesel?
Answer. Yes, the Department has assisted the biodiesel industry in
its efforts to achieve alternative fuel status in DOE regulations. One
hundred percent biodiesel fuel has been accepted by DOE as an
alternative fuel. USDA research and economic analysis was used in the
industry petition to include biodiesel blends in DOE's EPACT program.
USDA is working with DOE on a biodiesel life-cycle analysis to estimate
the comparative environmental benefits of biodiesel and biodiesel
blends relative to petroleum diesel. A report on using alternative
fuels in urban transit buses was cofunded by the biodiesel industry and
USDA and published by ERS. This study shows that B20 is cost
competitive with other alternative fuels such as natural gas and
methanol. An ERS study published in the Industrial Uses of Agricultural
Materials, Situation and Outlook Report shows that using B20 in Federal
fleets can increase soybean prices and enhance farm income. In
addition, USDA has met with DOE on several occasions to discuss the
appropriate role of biodiesel in EPACT's alternative-fueled vehicle
program. DOE has consistently stated that a biodiesel blend could
qualify as an alternative fuel, although the level must be consistent
with certain criteria to qualify as an alternative fuel.
The Department also supports biodiesel through its research program
to lower production costs of biodiesel fuels. ARS has and will continue
to foster biodiesel development in fiscal year 1997. Specific research
that has been addressed to feedstocks, e.g. soy oil, tallow, recycled
greases and soap stocks; fuel quality assessments to demonstrate that
biodiesel and blends of biodiesel--B20--are energy equivalent to
petrodiesels, and engine and emission testing of neat biodiesel and
B20.
DOE is the lead agency determining implementation of EPACT rules
and regulations. USDA is prepared to provide whatever information it
has to DOE on the net benefits of biodiesel to facilitate its use. If
the changes considered in EPACT are legislative, then an Administration
position would be developed depending upon the nature of the change.
usda new uses research
Question. What USDA agencies are involved in value added research?
What is the proposed budget for new uses? How does this differ from the
previous budget request?
Answer. USDA agencies involved in nonfood new uses include the
Agricultural Research Service--ARS--the Alternative Agricultural
Research and Commercialization Corporation--AARCC--Cooperative State
Research, Education, and Extension Service--CSREES--the Economic
Research Service--ERS--and the Forest Service--FS. The current total
USDA budget estimate for nonfood new uses for fiscal year 1997 is $70.2
million, and the proposed fiscal year 1998 budget is $63.6 million. The
decrease is a result of declines in ARS funding from $40.2 million in
fiscal year 1997 to $36.5 million in fiscal year 1998 and in CSREES
from $13.4 million in fiscal year 1997 to $7.6 million in fiscal year
1998.
office of energy and new uses biofuels function
Question. Will the Office of Energy be capable of fulfilling its
function of advocating for biofuels under this budget request?
Answer. The Office of Energy and New Uses is responsible for
assisting the Secretary in developing departmental energy policy and
coordinating departmental energy programs and strategies. Secretary
Glickman has made it clear that he has a policy of encouraging the
development of an agriculturally-based biofuels industry. The Office
will continue to support the policy position of the Secretary of
Agriculture under the current budget request.
______
National Agricultural Statistics Service
Questions Submitted by Senator Cochran
gpra initiative description
Question. The fiscal year 1998 request includes increased funding
of $125,000 for the Economic Research Service and $540,000 for the
National Agricultural Statistics Service to participate in an
initiative to provide statistical support to Federal agencies in
meeting the requirements of the Government Performance and Results Act.
Would you please briefly describe the Administration's initiative to
develop performance measures and indicators that can be employed to
carry out program assessments mandated by the Government Performance
and Results Act.
What is the total cost of this initiative in fiscal year 1998 and
future years? How much is USDA to contribute in each of these years?
Answer. The initiative, ``Provide Statistical Expertise for GPRA
Measurement,'' draws upon the expertise of eight federal statistical
agencies to develop performance measures and indicators to assist
federal government agencies in meeting GPRA requirements. The overall
initiative statement explains a number of reasons for undertaking the
activities. Many agencies have been struggling with measurement
problems associated with outcome based performance. Consistent
concepts, scales, and sampling methods are critical for reliable
performance-based comparisons among Departments. Many Federal services
contain common dimensions such as courtesy, timeliness, and knowledge
that are currently measured on different scales that undermine useful
comparisons. Many agencies have asked for help to develop sampling
schemes, a catalog of tested questions, and satisfaction scales to
obtain reliable results which can be compared across agencies and
tracked over time. The American Customer Satisfaction Index is the only
nation-wide standardized satisfaction measure that permits consistent
comparison of private sector products and services with Federal agency
products and services.
The total budget request for the initiative is $3.55 million and is
composed of the following parts: a) $1.6 million to develop or refine
comparable ``turn-key'' data collection and measurement resources for
use by agencies throughout the Government; b) $0.75 million to develop
standardized questions and satisfaction scales for common elements of
Federal services; and c) $1.2 million to add 10 Federal agencies to the
American Customer Satisfaction Index. USDA, through the participation
of both NASS and ERS, is requesting a total of $665,000 in fiscal year
1998. Development of sampling plans, questionnaires, and satisfaction
scales would require one-time development costs, followed by much lower
costs to maintain and refine. Actual measurement tasks would be funded
by the sponsoring agencies.
gpra initiative time frame
Question. Shouldn't government-wide performance measures and
indicators be available for agencies to use in the development of their
strategic plans, goals and measures? What is the proposed time frame
for the development of these statistical measures and indicators?
Answer. Development of measures and indicators is inextricably tied
to the goals set. The benefits from the outcome-oriented GPRA
management approach depends first upon setting the correct goals.
Challenges agencies governmentwide face in setting goals include: 1)
balancing the relative importance of cost effective outcomes versus
effectiveness at any cost; 2) setting goals to obtain outcomes which
the agency can definitely control versus broader policy outcomes; and
3) balancing goals relative to customer satisfaction measurements, such
as responsiveness and courtesy shown to customers with basic goals for
the program. Setting simplistic quantity goals for people served and
answers provided may undermine the quality of the service and the
answers. The choice of goals must define the measures and indicators
used rather than have the ease of measurement dictate the formulation
of the goals. As agencies government-wide make progress in developing
their strategic plans and setting goals, the statistical agencies
involved in the initiative will be charged with finding what and how
common performance measures and indicators can be developed to improve
comparisons between agencies of progress made towards achievement of
similar goals. Identifying commonality in goals across the complex and
sometime apparently conflicting array of outcomes sought will not be
easy. Work on development of these statistical measures and indicators
will begin in fiscal year 1998. Because all agencies will have
developed strategic plans by this time, the GPRA initiative will be
available to help them refine and improve their goals and measures.
Furthermore, the availability of these plans will facilitate
identification of common goals and measures, allowing NASS to focus its
efforts on developing standard instruments and scales that will be
useful to many agencies.
nass role in gpra initiative
Question. No staffing increases are proposed. What specifically
will be funded with the $540,000 in NASS funding requested for fiscal
year 1998?
Answer. NASS would be involved in all three phases of the project
including formulation of sampling plans, development of standard survey
instruments and scales, and work with the American Customer
Satisfaction Index on development of measures for farm/rural programs
and/or nutrition programs.
other participants in gpra initiative
Question. Which other six federal statistical agencies will
participate in this initiative, in addition to the Economic Research
Service and the National Agricultural Statistics Service? Is there a
lead agency?
Answer. In addition to ERS and NASS, the other federal agencies
participating in this initiative include the Bureau of Labor
Statistics, Bureau of Transportation Statistics, Census, Energy
Information Agency, National Center for Health Statistics, and the
Statistics of Income in the Internal Revenue Service. The Interagency
Council on Statistical Policy, chaired by OMB's Chief Statistician,
will determine the most cost-effective tasks and division of labor with
inputs from the President's Management Council and OMB's Resource
Management Office staff on priority objectives.
nass data collection costs
Question. The fiscal year 1998 request includes an additional
$500,000 to cover higher costs for survey interviewers employed under a
cooperative agreement with the National Association of State
Departments of Agriculture whose salary increases are not covered by
Federal pay cost increases, and for increased costs of per diem and
mileage. Are these pay cost increases mandated under the cooperative
agreement with the National Association of State Departments of
Agriculture?
Answer. No, the pay cost increases are not mandated by the
agreement with the National Association of State Departments of
Agriculture (NASDA). NASDA interviewers are intermittent, part-time
employees. It has become extremely difficult in many areas of the
country for NASDA to hire and retain enumerators because salaries are
generally below local wages for comparable jobs. A failure to adjust
salaries and mileage reimbursement of survey interviewers to keep pace
with competing employers will result in higher turnover rates, lower
morale, and a reduction in the overall quality of the survey work.
Question. How much of the $500,000 increase requested is for pay
cost increases and how much is for per diem and for mileage expenses?
Answer. The total request is actually $640,000. The request is in
two parts: $500,000 is for increased costs in NASS's regular survey
program and an additional $140,000 is for increased data collection
costs associated with the 1997 Census of Agriculture. The $640,000
breaks down as follows: $470,000 is for increased pay costs; $30,000 is
for increased per diem costs; and $140,000 is for increased mileage
costs.
travel
Question. Please provide the Committee with a breakdown of NASS's
actual travel costs in fiscal year 1996.
Answer. Total NASS travel costs in fiscal year 1996, including
appropriated and reimbursable travel, were $1,396,000.
Question. Please identify foreign travel obligations for fiscal
years 1994, 1995, and estimates for fiscal years 1996 and 1997.
Answer. Foreign travel costs for fiscal years 1994 through 1997 are
as follows:
Fiscal year
1994.......................................................... $73,700
1995.......................................................... 223,400
1996.......................................................... 377,200
1997 (est.)................................................... 400,000
Question. How many NASS personnel were engaged in foreign trips in
these years and for what purposes?
Answer. The following table shows the number of people and the
purpose of the foreign trips for fiscal years 1994-97.
NUMBER OF PEOPLE TAKING FOREIGN TRIPS
------------------------------------------------------------------------
1997
Purpose 1994 1995 1996 (est.)
------------------------------------------------------------------------
Technical Training and
Survey Assistance.......... 29 42 45 40
Workshops, Meetings and
Conferences................ 11 15 4 10
------------------------------------------------------------------------
______
Questions Submitted by Senator Kohl
cheese price survey
Question. NASS recently started conducting a nationwide survey of
dairy manufacturing plants to determine the prices being paid for
cheese nationally. I applaud the efforts of USDA to move forward with
this survey, which I believe will help provide more accurate market
information about cheese prices. Accurate market information is an
important prerequisite to an efficient pricing system for cheese in the
private sector, as well as being important to the overall federal milk
pricing reforms that are underway at USDA. However, with any new
survey, it takes some time to determine if the data retrieved is
reliable and accurate. This is particularly true when the survey is
voluntary, as is the case with this cheese price survey. In that
regard, I have the following questions. How many dairy plants receive
the survey each week?
Answer. NASS contacted 112 plants for the cheddar cheese price
survey. These plants accounted for over 99 percent of production.
Thirty of the plants screened out of the survey because they had no
bulk sales, aged all their cheese, used all production internally, etc.
Seven plants refused to participate in the survey and another 12 have
not made a final determination.
Question. How many plants are responding?
Answer. The 63 plants reporting price data weekly account for about
80 percent of all bulk, wholesale sales of natural cheddar cheese.
Question. In your view, does the rate of nonparticipation threaten
the accuracy of the survey?
Answer. Currently the survey accounts for about 80 percent of
qualifying sales, which is a high level of coverage. However, there is
no guarantee NASS will be able to maintain this high level of voluntary
cooperation. Declining cooperation rates could threaten the accuracy of
the series in the future.
Question. Would the survey be more accurate if all the surveyed
plants participated?
Answer. Yes, it would be more accurate if all plants participated.
This would ensure that the survey would be representative of all sales
and produce consistent, statistically valid results. By consistency, we
mean it is important for a large portion of the sales to be reported by
the same firms every survey period.
Question. Are there other aspects of the survey which raise
concerns about the accuracy of the data? For example, are some regions
more fully represented in the survey than others, and if so, does that
in any way skew the data?
Answer. The plants not participating in the survey are fairly
evenly distributed across the country. But NASS has no way to measure
the effect the nonreporting plants would have on the cheese prices.
Question. Since industry has traditionally used the price
established by the National Cheese Exchange (NCE) each week as a
benchmark price for the large majority of off-exchange bulk cheese
sales, is there any attempt being made in the survey to distinguish
between forward-contract sales, which are linked to the NCE price, and
spot market sales, which may be more independent of the NCE?
Answer. All sales data recorded in the survey are for sales
transactions completed during the survey week. Completed transactions
generally mean cheese is shipped or title transfers. The possibility of
collecting contracted sales was explored when the plants were initially
contacted. It did not prove to be feasible to collect contracted sales
since prices for the future were not generally established.
forage statistics
Question. As farmers seek to take advantage of new crop insurance
programs, dairy farmers in my state have had continuing difficulty with
crop insurance on their forage crops, such as alfalfa. In discussing
the matter with crop insurance providers in Wisconsin, one of the
concerns that has been raised in this regard is related to an
inadequacy of NASS data reporting. Specifically, the concern is that
payments under Group Risk Plans (GRP) for forage crops are triggered by
county average losses as reported by NASS. However, it is my
understanding that while NASS calculates and reports figures for county
average harvests, you do not report data for losses due to winterkill,
which is a predominate form of forage loss for northern-tier states.
In order to make the GRP crop insurance plans work effectively for
forage crops, it would seem appropriate for NASS to augment its data
retrieval process to show not only forage harvested, but also forage
lost to winterkill. Would you be willing to make that change?
Answer. The NASS program for forage is limited to dry hay
statistics and includes acres harvested, yield, and production
estimates. Since most hay crops are perennial, the acreage planted each
year is not the same as the area devoted to hay.
The GRP insurance program was implemented by the Risk Management
Agency (RMA) using existing county data series published by NASS. NASS
is very concerned that the yield data being used to determine payments
under the GRP are not adequate to measure all losses which farmers may
incur. The lack of data on forage losses due to winterkill is just one
of many examples of the inadequacy of the existing NASS county
estimates data series to measure losses due to adverse weather such as
drought, flooding, hail, or severe winter temperatures which can cause
excessive winterkill.
The GRP insurance program for all crops, including forage, rely on
the final average county yield per harvested acre. This means that
severely damaged acres not harvested are not accounted for in the final
county yield estimates. Also, severe natural disaster losses, such as
those caused by hail and flooding, frequently occur in only a portion
of any given county. Therefore using the county average statistics
provide very limited risk protection for farmers since it requires a
significant number of other farms to also incur severe losses.
Forage crops in particular present special challenges. Because of
the multiple uses of forage crops, NASS seriously questions whether
reliable statistical data could be collected that would accurately
measure winterkill and other factors which cause forage acres not to be
harvested. For example, in most areas, forage crops can be cut for dry
hay, green chop, silage, pastured by livestock, or plowed under for
green manure. Also, a certain percentage of forage acres require
reseeding every year--would those acres be reported as abandoned acres?
Therefore, NASS has never attempted to measure forage acres planted.
Finally, the RMA would probably need several years of historical forage
data for use in the payment calculations.
______
Additional Committee Questions
Questions Submitted by Senator Cochran
Dr. Woteki, you indicate in your prepared testimony that the
``returns for all research and development in agriculture are estimated
to be 35 percent annually, while those for pre-technology or pre-
development research--much of the kind of work funded through the
National Research Initiative--are considerably higher.''
returns to pre-technology/pre-development agriculture research
Question. What are the returns for pre-technology or pre-
development agricultural research?
Answer. Although there have been many studies that provide
estimates of the rate of return to public agricultural research, few
provide estimates for pre-technology and applied research separately.
An important exception is a landmark study by Wallace E. Huffman and
Robert E. Evenson--professors of economics at Iowa State University and
Yale University, respectively--entitled ``Science for Agriculture,''
published by Iowa State University Press, Ames, 1993. In this study,
Huffman and Evenson examined the contribution of research, extension,
and improvements in farmer's schooling to productivity growth in U.S.
agriculture between 1950 and 1982. They derived a separate rate of
return to ``pre-technology'' or ``pre-invention'' research, which they
define as ``research directed specifically toward producing discoveries
that enable and assist technology invention'' (p. 42). A table that
summarizes their findings is provided for the record.
Their estimates measure social rather than private rates of return.
The social rate of return includes benefits from research that go to
farmers, agricultural input suppliers, food processors, and consumers.
The private rate of return, on the other hand, is the return to the
individual or group that conducted it.
Their results indicate that while public agricultural research as a
whole had a rate of return of 41 percent, the rate of return to pre-
technology research was considerably higher, at 74 percent. Private
agricultural research, which is almost entirely applied research, had a
rate of return of 46 percent, comparable to public agricultural
research. The private rate of return to private research is probably no
more than 20 percent, indicating that a large share of the benefits
from private research spills over to other firms and to consumers.
The results of pre-technology research often benefit a wide range
of commodities and regions, whereas applied research tends to be more
commodity- or location-specific. This may explain why pre-technology
research has apparently earned a higher rate of return. Public support
for pre-technology research is especially important because the private
sector lacks an incentive to fund it. Pre-technology research is
usually long-term and high-risk in nature, and the results are often
too general to be patented.
[The information follows:]
Social Rates of Return to Agricultural Research, Extension and Education
All agriculture
Source (percent)
Public agricultural research (all)................................ 41
Public pre-technology research................................ 74
Public extension.................................................. 20
Private research.................................................. 46
Farmer's schooling................................................ 40
Source: W.E. Huffman and R.E. Evenson, ``Science for Agriculture,'' Iowa
State University Press, Ames, 1993. Table 9.1, p. 245.
---------------------------------------------------------------------------
returns to nri-funded research
Question. What are the returns to research funded through the
National Research Initiative specifically?
Answer. To our knowledge, no study has estimated the returns to
research funded specifically through the National Research Initiative
(NRI). However, support for fundamental, pre-technology research is a
stated goal of the NRI. According to the NRI annual report prepared by
the Cooperative State Research, Extension, and Education Service, 63
percent of NRI grants were awarded for fundamental research in 1994.
This implies that a high proportion of NRI funds are allocated to pre-
technology research. Given the findings of the Huffman and Evenson
study, this would indicate that research funded through the NRI might
earn a rate of return above the average for all USDA research.
documentation for returns to research
Question. What is the documentation for these findings?
Answer. The findings about returns to research are documented in a
1996 report issued by the Economic Research Service, ``Agricultural
Research and Development, Public and Private Investments Under
Alternative Markets and Institutions,'' Agricultural Economic Report
No. 735 and in a Wallace Huffman and R. E. Evenson study, ``Science for
Agriculture'' that was published by the Iowa State University Press in
1993.
______
Cooperative State Research, Education, and Extension Service
Questions Submitted by Senator Cochran
food safety
Question. Funding of $4.365 million, a $2 million increase, is
proposed for the Food Safety extension program. What is the
justification for this increase? How are current program funds
allocated and what have been the achievements of the program to date?
Answer. Currently, food safety education programs funded under the
Smith-Lever Act, Section 3d, address a wide variety of food safety and
quality issues nationwide, and their intended purpose is to provide
education, skills, and information needed to safeguard America's food
supply, while reducing the risk of foodborne illness among consumers.
Funded programs provide education and training for the development and
implementation of Hazard Analysis and Critical Control Point--HACCP--
programs for the meat and poultry industry, and for Federal and state
inspectors of meat and poultry plants. In addition, food safety
education programs focus on increasing consumer awareness and
understanding of food irradiation, microbiological pathogens, pesticide
residues, and safe food handling practices for both industry and
consumers.
As part of the President's Food Safety Initiative, the requested
budget increase of $2 million will be used to further enhance food
safety education programs and to increase the capacity of the research
and extension system to address the ongoing critical issues in food
safety, particularly as they relate to Hazard Analysis and Critical
Control Point education and to food handler certification training.
New HACCP regulations have presented significant challenges to the
Department of Agriculture to provide compliance education for food
handlers. Food handler certification training is provided by
Cooperative Extension System faculty in many states as described below,
and there is a growing trend for partnership and collaboration with
state health departments and others to provide food handler
certification training for food handlers from all areas of the food
industry. States providing food handler certification training to
industry, school foodservice workers, and health care facilities will
be required to incorporate HACCP principles into their food handler
programs. Food handler training and certification for foodservice
workers at congregate meal sites for older Americans, foodbanks, day
care, and child care facilities, among others, will also require
compliance education to meet new Federal regulations. Increasingly,
community kitchens, public service and public outreach programs rely on
workers with limited foodhandling skills. HACCP and quality assurance
education for consumers can provide education and training to support
gleaning and other food rescue programs, two priority areas for the
Department.
Since 1991, 49 states and 5 territories have established food
safety education programs with Smith Lever 3d funds and are addressing
at least one of three major food safety educational objectives:
--To increase the adoption of recommended food handling practices
--To improve practices and processes that promote the production and
protection of a safe food supply
--To improve the understanding of risks and responsible practices
related to food and health
In subsequent years, food safety education programs have achieved
the following impacts based on participant surveys:
--42 percent of food safety education program participants have
increased their adoption of recommended food handling
practices.
--70 percent of participants have increased their adoption of
practices that protect the food supply.
--53 percent of participants have increased their knowledge of food
safety public policy issues.
Food safety education funds were used to support the development of
the National Food Safety Database, which completed its second phase of
development in fiscal year 1996. The database is now available on the
World Wide Web for use by consumers, educators, researchers, and others
seeking food safety information and resources for a wide variety of
uses. Further development of the database will be completed with fiscal
year 1997 competitive funds awarded to a multi-state, interdisciplinary
team of database researchers coordinated at the University of Florida.
Food safety education funds were used to support the development of
the Food Animal Residue Avoidance Databank, a central source of residue
avoidance information for producers, veterinarians, extension
specialists, and regulatory agencies. Drug and pesticide tolerances for
food animal products, residue screening methods, and pharmacokinetics
of chemicals in food animals have been included in the database. In
fiscal year 1996, the Food Animal Residue Avoidance Databank grew to
include a seafood and aquaculture component. The Databank has been
jointly developed by a multi-state, interdisciplinary team of
researchers at the University of California-Davis, North Carolina State
University, and the University of Florida. The University of Illinois,
a partner in the development of the Food Animal Residue Avoidance
Databank, is no longer active in the project.
Food safety education programs funded through Smith Lever 3d have
included the following:
--24 states and territories have implemented Hazard Analysis and
Critical Control Point education programs with food safety
education funds.
--20 states and territories have implemented food safety programs
related to biotechnology.
--28 states and territories have conducted educational programs
focused on microbiological pathogens.
--24 states and territories have developed educational programs on
pesticide residues.
--44 states and territories have conducted educational programs in
food processing and food preservation.
Audiences targeted by food safety education programs funded through
Smith Lever 3d have included the following:
--33 states and territories have implemented food safety programs
targeting youth audiences.
--32 states and territories have targeted industry.
--8 states and territories have focused on providing food safety
education to immigrants, those with low literacy skills, or
those who speak English as a second language.
Since the program's inception in 1991, approximately $18.5
million--$10.5 from Federal sources, and $8 million from State matching
funds--have supported the development and implementation of 283 food
safety education projects. More than half of those funded projects
remain active and continue to impact both national and international
audiences.
integrated pest management
Question. How have extension activities supported with Integrated
Pest Management (IPM) funds accelerated the transfer of proven pest
management technologies from the researchers to farmers, crop
consultants, ranchers, and other users?
Answer. Presently, $10.8 million of Smith-Lever 3(d) funds are
distributed to land-grant universities for extension activities to
educate farmers and others about IPM methods. This investment has
resulted in an increased use of IPM methods by farmers in the United
States. The extension effort is focusing on the expansion of team-
based, multidisciplinary programs in areas where tough pest problems
continue to cause major losses to growers, threaten the competitiveness
of food industries, and sometimes pose unacceptable risks to the
environment and workers. USDA investments have resulted in improved
management of a wide array of pests that inflict economic and quality
damage on nearly every crop produced in the country.
The Department is supporting IPM education programs at every land-
grant university in the country, and successful outcomes resulting from
this investment can be cited for virtually every state. At Mississippi
State University, Cooperative Extension estimates that its IPM
education efforts have helped cotton growers increase their yields by
approximately $50 per acre and reduce control costs by approximately
$40 per acre, an economic benefit to Mississippi cotton growers of more
than $90 million. The use of IPM tactics has played a crucial role in
maintaining the viability of cotton as one of Mississippi's leading
agricultural commodities, despite the problems with insecticide
resistance. Research and extension efforts conducted by the University
of Missouri have provided Missouri farmers with resistant soybean
varieties and other management techniques that have increased their
profits by $7.5 million per year. It is estimated that Iowa corn
farmers save $15 million annually as a result of improved management of
black cutworms made possible by Iowa State University's early-
monitoring program. Washington Cooperative Extension has worked closely
with the Agricultural Research Service to implement an Areawide IPM
Program for codling moth on over 3,000 acres of apples. This program
has reduced pesticide use by over 75 percent, improved quality, and
increased net profits by more than $30 per acre. The University of
Wisconsin's IPM program developed decision support software that saved
potato growers more that $5.9 million per year by reducing input costs
while protecting the water resources of the region through reductions
in applications of pesticides, nitrogen and water. Stored grain IPM
strategies developed by Kansas State University research and extension
staff helped reduce pest management costs by 45 to 70 percent, leading
to a net savings of more than $1 million per year in Kansas. These
technologies have been distributed nationwide to over 2,400 elevator
operators. In Oklahoma alone, elevator operators and producers have
saved $20 million per year by reducing pesticide use and grain losses.
pesticide applicator training
Question. Funding of $1.5 million is being proposed for fiscal year
1998 to initiate a redesigned Pesticide Applicator Training Program. No
funding was provided for the program for fiscal year 1997. Is this
program currently being carried out? How will the program be
redesigned?
Answer. It is anticipated that $1.7 million will support the
Pesticide Applicator Training Program in fiscal year 1997 through a
reimbursable agreement with the Environmental Protection Agency. The
proposed funds would provide ``seed money'' for states to develop
partnerships with other public programs such as EFNEP, 4-H, Master
Gardener and selected private organizations to educate the general
public, especially homeowners and small or part-time farmers that will
reduce exposure of toxic pesticides to users and the environment.
Educational programs are needed in the areas of risk management that
will mitigate exposure, when pesticides are used in a pest management
program, and minimize risk to public health and the environment. The
lack of education in use of pesticides has resulted in gross misuse in
home environments, threatening personal health, as well as possibly
causing the loss of the pesticide to production agriculture.
children, youth, and families, at risk
Question. An increase of almost $2.15 million is requested for the
Children, Youth, and Families at Risk [CYFAR] program. Of this
increase, $446,000 is to bolster ongoing programs and $1.7 million is
to be targeted to the 1890 Institutions. What is the justification for
the increase in funding for this program?
Answer. Since 1991, USDA has received an annual appropriation to
expand Extension programs to reach at-risk children and families. The
Children, Youth, and Families at Risk [CYFAR] National Initiative
mission is to marshal resources of the land grant university
Cooperative Extension System to develop and deliver educational
programs that equip limited resource families and youth who are at risk
for not meeting basic human needs, to lead positive, productive,
contributing lives.
The CYAR funds are distributed to 1862 land-grant universities'
Cooperative Extension Service through a competitive application and
review process. Projects are funded for five years. Since only 1862
land-grant universities have been eligible for funds, they were urged
to partner with 1890 universities on Children, Youth, and Families
Networks and State Strengthening Projects. Changes in the 1996 Farm
Bill allow 1890 institutions to apply for these programs--if there is
new or increased funding over the fiscal year 1995 appropriated level.
Increased funding would open the CYFAR Initiative to 1890
universities and provide them the opportunity to support community-
based programs for children, youth and families at risk. Educational
resources of the entire university/Extension System could be made
available to people and communities least likely to have access. 1890
universities would be able to support prevention education programs
which meet critical needs of children and families.
Question. How are the current program funds allocated and what has
been accomplished through the program?
Answer. In 1997, Children, Youth and Families at Risk funds have
been allocated for community-based projects for at risk children and
their families and for support systems for these community-based
projects.
Children, Youth and Families at Risk Fiscal year 1997
Youth At Risk Community Project Renewal....................... $149,834
40 State Strengthening Projects--50 percent to communities.... 6,709,787
Five CYF Networks............................................. 900,000
CYFERNet Coordination......................................... 184,000
Technical Assistance liaisons................................. 215,000
CYFAR Evaluation Collaboration................................ 494,000
Annual CYFAR Conference--for community projects............... 40,000
Annual Report Publication, Distribution....................... 40,059
CYFAR Video/Brochures: Product/Distribution................... 25,000
State Strengthening Review Team Expenses...................... 15,000
State Strengthening Project Meeting........................... 17,000
--------------------------------------------------------------
____________________________________________________
Subtotal................................................ 8,789,680
Federal Administration........................................ 764,320
--------------------------------------------------------------
____________________________________________________
Total................................................... 9,554,000
Through this Initiative, the Cooperative State Research, Education,
and Extension Service has supported 170 community-based projects with
sites in over 500 communities in 49 states and 3 territories. These
programs serve 99,000 youth and 17,000 parents.
CYFAR projects incorporate research-based strategies for effective
programs through collaboration, citizen involvement, inclusiveness,
community-base, and ecological principles. Extension staff have formed
collaborations with other community agencies and with citizens to
create programs that meet critical needs of children and families. Each
year state and local public and private agencies and organizations
contribute cash and in-kind resources that match or exceed the Federal
appropriation for the Children, Youth and Families at Risk program. In
addition, approximately 25,000 youth and adult volunteers contribute
time to the community programs.
In the interest of sustaining and expanding these community
programs, the Children, Youth and Families at Risk Initiative has also
funded a broad variety of support and technical assistance including:
The 5 National Children, Youth, and Family Networks which merge
resources of all the land grant universities to provide research-based
program and curriculum information, technical assistance, and training
to communities. National Networks focus on Child Care, Family
Resiliency, Science and Technology, Collaborations, and Decisions for
Health.
CYFERNet, the electronic information infrastructure which links and
supports all the five networks and assists communities with computer
and technology issues.
Forty (40) State Strengthening Projects which each support a
minimum of three community-based programs for at risk youth and
children through the universities.
The Children, Youth, and Families at Risk Evaluation Collaboration
which is assessing program impact and assisting communities evaluate
their prevention education programs. This evaluation is finding that
many of the community-based projects funded previously for five years
by CSREES are no longer receiving federal funding and are continuing to
operate with a variety of community and county public and private
resources. The Children, Youth, and Family Networks have stimulated
collaboration across universities, more efficient use of faculty and
program monies, and broad dissemination of information on the World
Wide Web which meets quality standards established by consensus of
multidisciplinary faculty teams from many universities.
Question. What specific activities will be carried out with the
increased funding proposed?
Answer. 1890 Universities could apply for Children, Youth, and
Families at Risk Projects for statewide staff development and training,
technical assistance to community programs, and direct funding to
community programs designed to address needs identified by youth and
adult citizens. Electronic connectivity could provide computers,
software, Internet connections, and technology training for staff as
well as youth and adult participants in community programs--to citizens
least likely to have the resources for access.
This funding available on a competitive basis could insure active
involvement of the 1890 universities in collaborative sharing of
research and educational resources of the Children, Youth and Family
Networks.
extension activities programs
Question. The budget proposes to terminate a number of extension
activities which this Administration has requested funding for in past
years. These include farm safety, the Renewable Resources Extension
Act, agricultural telecommunications, and rural health and safety. The
budget indicates that these programs are state specific and/or do not
address current regional or national priorities. With respect to each
program listed above, please indicate why the Administration requested
funding for the program in past years and why it now believes support
of the program should be left to the discretion of the states to
support through Hatch and Smith-Lever (b) and (c) formula funds.
Answer. The Administration has not requested continued funding for
these programs because we are committed to responding to high priority
problems of broad national concern. For example, CSREES has requested
an increase of $2 million for the Food Safety programs funded under
Smith-Lever 3(d) because reducing the incidence of food-borne illness
is a top priority of the public and the Administration. We have also
requested an increase of $2.146 million for the Children, Youth, and
Families at Risk programs funded under Smith-Lever 3(d), which is
consistent with the nationwide focus on at-risk youth.
Farm Safety and Rural Health and Safety.--Both of these programs
are national in scope and affect rural, suburban, and urban
populations. The farm safety and rural health and safety programs focus
on the rural sector and, while the importance of these programs to some
rural communities cannot be understated, the Administration believes
that the availability of Smith-Lever 3(b) and (c) formula funds enables
States to provide continued support of the programs as they deem
appropriate. The formula funds permit a consistent, stable, dependable,
and reliable programming source for State and county Extension
cooperators and allow maximum flexibility in addressing national,
regional, and/or local problems and issues.
Agricultural Telecommunications.--Continued funding of the
Agricultural Telecommunications program has not been requested because
the Administration has viewed the program as an opportunity to provide
an infusion of funding to move the Cooperative Extension System forward
in the areas of distance learning and computer networking. However, one
of the criteria for award under the program has been the sustainability
of a proposed project, or the ability of a project to continue and grow
after receiving funding from the program. It is anticipated that these
projects will be sustained through other funding sources, such as from
the sale of products and/or the use of ideas and results from the
projects by others. The projects could also be sustained through the
use of formula funds if deemed appropriate by the States.
Renewable Resources Extension Act.--Funds provided under the
Renewable Resources Extension Act provide for expanded natural resource
education programs and are distributed to all States for educational
programs and projects. Continued funding under the Act has not been
requested because natural resource education programs are currently
supported through the States' use of Smith-Lever 3(b) and (c) formula
funding for Natural Resources and Environmental Management, which is
one of the Extension base programs.
formula funds
Question. Why is no increase in Hatch and Smith-Lever formula funds
proposed if the Administration is proposing to withdraw over $9 million
in federal support for these specific activities?
Answer. As part of the Administration's efforts to balance the
budget, we have not requested increases in formula funding to offset
the proposed eliminations of several programs.
water quality program
Question. Why is a reduction of $1.672 million being proposed for
Water Quality extension activities? What activities are currently being
carried out through this program?
Answer. The President's $1.672 million reduction for Water Quality
extension activities reflects a desire to place emphasis in other
priority areas in addition to water quality extension programs. It is
anticipated that the state partners will secure additional funding to
compensate for all or part of the federal reduction in funds. The Water
Quality extension program provides support to every state for
educational programs concerned with improving water quality. In
addition, demonstration and hydrologic unit activities are funded
throughout the country through almost 100 individual projects.
expanded food and nutrition program
Question. Would you please provide a description of the projects
being funded through the Expanded Food and Nutrition Program [EFNEP].
Answer. EFNEP funds are distributed to all 50 States and 6
territories based on a formula that takes into account the percent of
the population at or below 125 percent of poverty. These funds are used
to deliver intensive nutrition education to limited resource youth and
families with young children. Through an experiential learning process,
adult participants learn how to make good choices to improve the
nutritional quality of the meals they serve their families. They
increase their ability to select and buy food that meets the
nutritional needs of their family. They gain new skills in food
production, preparation, storage, safety and sanitation, and they learn
to better manage their food budgets and related resources such as Food
Stamps. EFNEP is a program that produces results; surveys show that 87
percent of the Expanded Food and Nutrition Program adult graduates
improve 1 or more food resource management practices; 92 percent
improve 1 or more nutrition practices; and 69 percent improve 1 or more
food safety practices; EFNEP reaches all ethnic groups, in urban and
rural settings, with culturally sensitive educational programs leading
to positive behavior change.
rural health and safety program
Question. Would you please provide an update on achievements of the
projects being carried out through the Rural Health and Safety Program?
Answer. The Rural Health and Safety program is conducted by the
Cooperative Extension Service and community colleges in Mississippi to
address the problems of shortages of rural health care professionals
and health care services and facilities. The Mississippi program has
established the Mississippi Rural Health Corps--MRHC--a program of 15
community and junior colleges. The program is designed to increase the
number of nurses, licensed practical nurses, and other health care
professionals with a commitment, up to three years, to work in a rural
health care service, and to develop an Extension health education and
community health service strategic planning program.
After four years of operation, the MRHC provided junior and
community colleges with educational opportunities for 2,516 students in
the health care field. Nearly 90 percent of those enrolled have either
completed their courses of study or remained in training. Of the
program's 962 graduates, over 90 percent are employed in rural
communities. Because of additional state funds generated by the
project, one community college was able to add Emergency Medical
Technician--EMT--and Emergency Medical Responder--EMR--courses to its
curriculum. Nearly 200 students have been able to complete this
training in the first two years of the program. In fiscal year 1997, an
additional distance learning downlink site will be established with the
Mississippi Nurses Association in preparation for adding graduate
nursing education programs to help provide continuing nursing education
certification and advanced degree faculty members for the MRHC program.
Rural health educational activities of the Mississippi Cooperative
Extension Service have been very effective in raising rural resident's
awareness of health care needs and available services. Over 29,000
residents have received health screening and referral services, and
community leaders have begun strategic planning efforts towards
establishing local community health centers. Eleven county-wide health
coalitions and two health councils have been established to address
county needs in the areas of breast cancer, high blood pressure, and
sexually transmitted diseases education. The councils are served by 154
certified MRHC volunteer lay health advisors.
A second program, conducted by Cooperative Extension and the School
of Nursing at Louisiana's Southern University, provides community-based
health promotion and disease prevention services to persons who
otherwise would not have access to them. The Louisiana program has
established a nurse-managed mobile health care clinic that is providing
culturally sensitive community-based health education, assessments,
screening, and referral services. The mobile clinic also provides
nursing students with clinical learning experiences within the
immediate environment of the medically at-risk and underprivileged
populations. The Louisiana program has also made progress in developing
a mobile clinic-based nurse education curriculum. This mobile clinic
gives students a direct understanding of health care needs and
obstacles to accessing health care services of the rural medically at-
risk populations. Community residents are given the opportunity to
advise in the operation of the mobile clinic. Many of the student
nurses acknowledge a change in attitude and perception regarding
diverse groups. This experience has enabled them to more effectively
provide culturally sensitive health care services. Health education is
provided to participants to enhance individual and family awareness in
health promotion and disease prevention strategies, while increasing
self-care capabilities in nutrition, dental health, aging, childhood
immunizations, breast self-examination, hypertension, diabetes, and
other illnesses.
A major focus of this Louisiana program has been serving the health
care needs of the homeless. The program report states that: ``This
excursion into the world of the homeless has assisted all directly
involved to clearly understand the problems associated with the
population. The student nurses experienced a gamut of emotions from
brief moments of depression over their experiences to absolute joy at
being able to do something to assist the homeless to meet health care
needs. Many of them express a new interest in the field of community
nursing.''
agricultural telecommunications
Question. Would you please tell us how the agricultural
telecommunications funds have been spent in each of the last three
fiscal years and who has received these funds.
Answer. The Cooperative State Research, Education, and Extension
Service conducts a competitive grants program to make available to
accredited institutions of higher education the funding allocated to
the Agricultural Telecommunications Program.
In fiscal year 1994, 12 projects were funded in the areas of Staff
and Faculty Training, Program Delivery and Program Development and
Production. Grant recipients in the Staff and Faculty Training category
included University of Alaska, and two projects at Iowa State
University. In the Program Delivery category, grant recipients included
University of Puerto Rico, University of Hawaii, California State
University-Fresno, and University of Nebraska. In the Program
Production and Development Category, grant recipients included New
Mexico State University, University of Florida, University of Idaho,
Texas A&M University, and Utah State University.
In fiscal year 1995, 12 projects were funded in the areas of
Program Delivery; Innovative Program Development and Production; and
Capacity Building. Grant recipients in the Program Delivery category
included University of Massachusetts, University of California,
University of Georgia, University of Arkansas. In the Innovative
Program Development and Production category, grant recipients included
Iowa State University, University of California, University of
Illinois, and two projects at Cornell University. In the Capacity
Building category, grant recipients included University of Florida,
Pennsylvania State University, Texas A&M University.
In fiscal year 1996, 13 projects were funded in the areas of
Program Delivery; Innovative Program Development and Production; and
Capacity Building. In the Program Delivery category, grant recipients
included Cornell University, University of Idaho, University of
Arizona, Oklahoma State University, University of Vermont, Mississippi
State University, University of Hawaii. In the Innovative Program
Development and Production category, grant recipients included New
Mexico State University, Ohio State University and Fort Valley State
University. In the Capacity Building category, grant recipients
included University of Arkansas-Pine Bluff, Kansas State University,
and North Carolina State University.
1890 facilities
Question. Please provide a summary of how the 1890 facilities
funding has been allocated in each of the past three fiscal years,
including how much was received by each institution and the facilities
funded.
Answer. The information follows.
1890 FACILITIES (SEC. 1447)
----------------------------------------------------------------------------------------------------------------
Fiscal year--
Institutions Fund status --------------------------------- Status
1994 1995 1996
----------------------------------------------------------------------------------------------------------------
Alabama:
Alabama A&M University..... Allocated... $422,607 $422,607 $416,242 The construction of the joint
Awarded..... 422,607 422,607 416,242 Research/Extension Conference
Center is planned.
----------------------------------------------------------------------------------------------------------------
Tuskegee University........ Allocated... 422,607 422,607 416,242 The renovation of the food
Awarded..... 422,607 422,607 416,242 processing laboratories and the
construction of the Extension
Activities Center in progress.
----------------------------------------------------------------------------------------------------------------
Arkansas: University of Allocated... 405,926 405,926 399,812 Construction of the small
Arkansas at Pine Bluff. Awarded..... 405,926 405,926 399,812 ruminant research and fish
processing/marketing buildings
in progress.
----------------------------------------------------------------------------------------------------------------
Delaware: Delaware State Allocated... 324,560 324,560 319,672 Construction plans underway for
University. Awarded..... 324,560 324,560 319,672 the Research/Extension
herbarium.
----------------------------------------------------------------------------------------------------------------
Florida: Florida A&M University Allocated... 427,721 427,721 421,279 Construction of farm shops &
Awarded..... 427,721 427,721 421,279 equipment shed planned.
----------------------------------------------------------------------------------------------------------------
Georgia: Fort Valley State Allocated... 469,833 469,833 462,757 Plans include an education
University. Awarded..... 469,833 469,833 ......... support center, a family life
center, and an agricultural
administrative support complex.
----------------------------------------------------------------------------------------------------------------
Kentucky: Kentucky State Allocated... 520,692 520,692 512,850 Plans include the construction
University. Awarded..... 520,692 520,692 512,850 of horticulture and entomology
labs, renovation of the water
quality lab and the purchase of
land to develop a fish
nutrition lab.
----------------------------------------------------------------------------------------------------------------
Louisiana: Southern University. Allocated... 397,350 397,350 391,365 Plans include purchasing movable
Awarded..... ......... ......... ......... equipment for livestock
pavilion, construction of a
multi-purpose research &
demonstration facility, and
construction of an Extension
telecommunication center.
----------------------------------------------------------------------------------------------------------------
Maryland: University of Allocated... 373,433 373,433 367,809 Plans include the construction
Maryland Eastern Shore. Awarded..... 373,433 373,433 367,809 of a food science & technology
Research & Extension center,
and a human development center.
----------------------------------------------------------------------------------------------------------------
Mississippi: Alcorn State Allocated... 410,717 410,717 404,531 Original plans included
University. Awarded..... ......... ......... ......... renovation of swine research &
demonstration unit,
construction of a poultry
research feed mill and a fish
hatchery.
----------------------------------------------------------------------------------------------------------------
Missouri: Lincoln University... Allocated... 518,512 518,512 510,702 Design & construction for the
Awarded..... 518,512 518,512 510,702 beef/cattle facility and the
multi-purpose building
underway.
----------------------------------------------------------------------------------------------------------------
North Carolina: North Carolina Allocated... 534,886 534,886 526,830 The 5-year plan has been amended
A&T State University. Awarded..... 534,886 534,886 526,830 to include construction of an
Extension/Research office
building at the university farm
complex and the renovation of
the food & nutrition lab.
----------------------------------------------------------------------------------------------------------------
Oklahoma: Langston University.. Allocated... 418,263 418,263 411,963 Plans include construction and
Awarded..... 418,263 418,263 411,963 equipment/furnishing for a
Research and Extension multi-
purpose facility.
----------------------------------------------------------------------------------------------------------------
South Carolina: South Carolina Allocated... 413,265 413,265 407,041 The renovation design for the 4-
State University. Awarded..... 413,265 413,265 407,041 H camp has been completed.
Construction is scheduled to
begin in June 1997.
----------------------------------------------------------------------------------------------------------------
Tennessee: Tennessee State Allocated... 476,248 476,248 469,075 Proposed plans include the
University. Awarded..... ......... ......... ......... purchase of land and the
construction of a Research/
Extension facility.
----------------------------------------------------------------------------------------------------------------
Texas: Prairie View A&M Allocated... 597,336 597,336 588,339 Irrigation system, security
University. Awarded..... 597,336 597,336 588,339 fence, and waste disposal
system installed.
----------------------------------------------------------------------------------------------------------------
Virginia Virginia State Allocated... 451,004 451,004 444,211 Parking lot for the Multi-
University. Awarded..... 451,004 451,004 444,211 purpose Pavilion has been
completed. Diagnostic
laboratory furnishings and
satellite downlinking equipment
has been installed in the
Pavilion. Renovation of the
meat goat handling & housing
facilities underway.
----------------------------------------------------------------------------------------------------------------
buildings and facilities
Question. Please provide the Committee with a summary report on
each of the facilities funded through CSREES' Buildings and Facilities
Program, including the federal funds provided, the total estimated cost
of the project, the current status of the project, and the available
non-federal project match.
Answer. This information is provided in the following table.
SUMMARY OF FUNDING AND PROJECT STATUS, CSREES BUILDINGS AND FACILITIES PROGRAM--FISCAL YEAR 1997
[Dollars in thousands]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Federal
Total est. funding
Name and location of facility cost of provided as of Total non-Federal match available to date Current status of facility
project fiscal year
1997
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Poultry Science Facility, Auburn $12,000 $6,000 Assurance of required match has come from State and poultry Design work is underway.
University (Auburn, AL). industry sources.
Animal Sciences Research and Teaching 3,892 1,946 Matching funds of $200,000 are now available, balance of Design phase completed; preparing bids for construction
Facility, University of Arkansas \1\ $720,000 is being pursued from State appropriations. phase.
(Fayetteville).
Alternative Pest Control Containment/ 38,118 10,921 Majority of matching funds are anticipated to become Most of the programming & design phase is completed;
Quarantine Facility: University of available in fiscal year 2000 (and in-kind value of land develop. of construction documents to begin in fiscal year
California (Davis/Riverside). to be proposed as part of match). 1997.
Animal Reproduction & Biotechnology 5,302 2,651 Matching funds are available............................... Construction work began in fiscal year 1994. Full occupancy
Laboratory, Colorado State University expected by Summer 1997.
(Fort Collins).
Agricultural Biotechnology Laboratory, 18,100 3,915 Matching funds to be made available annually by the State.. Most of the programming & design phase is completed;
University of Connecticut (Storrs). develop. of construction documents to begin in fiscal year
1997.
Center for Applied Aquaculture, 11,450 9,956 Availability of required match for the fiscal year 1995 Construction Ongoing.
Oceanic Institute (Waimanolo, HI) \2\. increment of funding has not been determined.
Agricultural Biotechnology Facilities, 13,479 5,900 In 1991, Univer. provided $1M to complete an aquaculture Design & construction completed on an Aquaculture Lab (1
University of Idaho (Moscow) \3\. lab, but only $250,00 came from the State. The State did component of the project). Preliminary stages only on the
not match during fiscal year 1992-1995. During fiscal remaining components.
years 1996-97, the university was able to obtain a total
of $4.3 million in bond commitments from the State with a
additional $1 million of State support anticipated for
fiscal year 1997.
Biotechnology Center, Northwestern 24,000 8,536 Matching funds are available............................... All construction has been completed; the buildings are
University (Evanston, IL). occupied.
Biological and Environmental Sciences 10,000 5,000 Matching funds are available............................... Most of the programming & design phase is completed;
Facility, DePaul University (Chicago, develop. of construction documents to begin in fiscal year
IL). 1997.
Institute for Natural Resources and 20,000 10,000 $1.1 million of matching funds have been provided by the Planning and design phases are underway.
Environmental Science, University of State, with more matching funds anticipated from State
Maryland (Statewide). appropriations next year.
Center for Hunger, Poverty, and 16,340 8,170 CSREES is considering the University's proposed use of in- Most of the programming & design phase is completed;
Nutrition Policy, Tufts University kind value of land as part of its matching contribution. develop. of construction documents to begin in fiscal year
(Boston, MA). Cash may become available for additional matching purposes 1997.
in the future.
Center for Plant Biodiversity, 15,826 7,913 Matching funds are available............................... In final phase of construction work; occupancy date
Missouri Botanical Garden (St. Louis). estimated at 12/01/97.
Center for Molecular Biology, Rutgers 47,900 17,836 Matching funds are available............................... Construction Ongoing.
University (New Brunswick, NJ).
Center for Arid Land Studies, New 22,600 11,000 Matching funds are available............................... Most of the programming & design phase is completed;
Mexico State University (Las Cruces). develop. of construction documents to begin in fiscal year
1997.
Ctr. for Rsch. on Human Nutr. & 108,607 18,108 Matching funds are available............................... Construction Ongoing.
Chronic Disease Prevention, Wake
Forest University (Winston-Salem, NC).
Research Greenhouse, Cornell 1,212 606 Matching funds are available............................... Construction completed; building is occupied.
University (Ithaca, NY) \4\.
Lake Erie Soil & Water Research & 5,600 2,800 Matching funds made available through State appropriations Construction Ongoing.
Education Center, The University of in fiscal year 1994.
Toledo (Toledo, OH).
Forest Ecosystem Research Laboratory, 24,000 10,000 Matching funds are available............................... Most of the programming & design phase is completed;
Oregon State University (Corvallis). develop. of construction documents to begin in fiscal year
1997.
Animal Resource Wing, South Dakota 11,600 5,400 Matching funds are available............................... Design work to be initiated in fiscal year 1997.
State University (Brookings).
Agricultural, Biological, & 38,500 10,434 Matching funds of $5-6 million are available now, the Most of the programming & design phase is completed;
Environmental Research Complex, balance to be pursued from State appropriations. develop. of construction documents to begin in fiscal year
University of Tennessee (Knoxville). 1997.
Horse Science and Teaching Center, 5,170 2,585 MTSU has requested the award to be made to the MTSU Design work to be initiated in fiscal year 1997.
Middle Tennessee State University Foundation since the univer. has not been able to obtain
(Murfreesboro). the matching funds required. CSREES is currently reviewing
the proposed request to change the award recipient to the
Fdtn. since they can provide the match.
Center for Southern Crop Improvement, 14,500 7,000 Matching funds are available............................... Most of the programming & design phase is completed;
Texas A&M University (College develop. of construction documents to begin in fiscal year
Station). 1997.
Animal Disease Biotechnology Facility, 54,000 23,400 Matching funds are available............................... Construction Ongoing.
Washington State University (Pullman).
--------------------------------
Totals.......................... 522,196 190,077
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Includes carryover funds from fiscal year 1995 in the amount of $946,000. \2\ Includes carryover funds from fiscal year 1994 and 1995 in the amount of $3,581,000. \3\ Includes
carryover funds from fiscal year 1993 and 1994 in the amount of $1,266,000. \4\ Includes carryover funds from fiscal year 1993 in the amount of $232,000.
higher education programs
Question. Please provide the Committee with a report on each of the
CSREES higher education programs, indicating the institutions receiving
grants under each program and an assessment of how each program is
meeting its objectives.
Answer. In most programs, fiscal year 1997 awards currently are
being processed. The most recent funding information is provided for
each program, as follows.
Higher Education Challenge Grants Program
Institutions funded in fiscal year 1996 are the following:
California Polytechnic State University-San Luis Obispo
California State University, Chico
Cornell University
East Carolina University
Iowa State University
Kansas State University
Louisiana State University
Michigan State University
Mississippi State University
Montana State University
Ohio State University
Oklahoma State University
Rutgers University
Salish Kootenai College
Southern Illinois University
State University of New York College of Environmental Sciences and
Forestry
Tarleton State University
Texas Tech University
Texas A&M University
University of Connecticut
University of Delaware
University of Florida
University of Georgia
University of Hawaii at Manoa
University of Illinois at Urbana-Champaign
University of Kentucky
University of Maryland, College Park
University of Minnesota-Twin Cities
University of Nebraska
University of North Carolina at Chapel Hill
University of Rhode Island
University of Tennessee, Knoxville
University of Texas-Austin
University of Wisconsin-Platteville
University of Vermont
Utah State University
Virginia Polytechnic Institute and State University
Washington State University
The objective of the Challenge Grants Program is to enable colleges
and universities to provide high quality education in the food and
agricultural sciences required to strengthen the Nation's food and
agricultural scientific and professional work force. The program is
accomplishing this by funding model projects that address regional and
national higher education issues, use creative approaches to teaching,
and foster partnerships among universities and between universities and
the private sector. The program doubles the Federal investment since it
requires dollar-for-dollar matching. The program serves both land-grant
and other institutions with baccalaureate and higher degree programs in
food and agricultural sciences, making it the centerpiece of USDA's
teaching grants programs. An exciting array of projects funded under
the program are serving to revitalize agriscience and business
curricula, enhance faculty teaching skills, introduce and emphasize
international issues and strengthen students' problem solving skills.
Hispanic-Serving Institutions Education Grants Program
The Hispanic-Serving Institutions Education Grants Program is being
initiated in fiscal year 1997. The program's objectives are to promote
and strengthen the ability of Hispanic-Serving Institutions to carry
out higher education teaching programs in the food and agricultural
sciences. The program will accomplish these by awarding grants to
Hispanic-Serving Institutions for projects that will address one or
more targeted need areas: curricula design and materials development;
faculty preparation and enhancement for teaching; instruction delivery
systems and scientific instrumentation for teaching; student
experiential learning, and student recruitment and retention. The
program is competitive among Hispanic-Serving Institutions. Awards will
be made later this fiscal year.
1890 Institution Capacity Building Grants Program
Institutions funded for teaching projects in fiscal year 1996 are:
Alabama A&M University
Alcorn State University
Delaware State University
Florida A&M University
Kentucky State University
Langston University
North Carolina A&T State University
South Carolina State University
Tennessee State University
Tuskegee University
University of Arkansas-Pine Bluff
University of Maryland-Eastern Shore
Virginia State University
Institutions funded for research projects in fiscal year 1996 are:
Alabama A&M University
Alcorn State University
Delaware State University
Florida A&M University
Fort Valley State University
Kentucky State University
Langston University
North Carolina A&T State University
Southern University and A&M College
Tuskegee University
University of Maryland-Eastern Shore
University of Arkansas-Pine Bluff
Virginia State University
The highly competitive 1890 Institution Capacity Building Grants
Program serves as the crux of the Department's high-priority
initiatives to advance the teaching and research capacity of the 1890
Land-Grant Institutions and Tuskegee University. It reflects USDA's
commitment to encourage more minorities to prepare for careers as food
and agricultural scientists and professionals. The program meets these
objectives by providing support for teaching and research projects in
high-priority areas targeted by the institutions and USDA. Matching
support from non-Federal dollars is strongly encouraged. Another
component of the program that assists the 1890 Institution to build
teaching and research capacity is the required cooperation of the
institutions with one or more USDA agencies in developing a proposal
and carrying out a project.
Multicultural Scholars Program
Grants are awarded every two years. Thus, institutions funded in
fiscal year 1997, with combined 1996 and 1997 funds, include:
Alabama A&M University
California State University, Fresno
California Polytechnic State University-San Luis Obispo
Cornell University
Michigan State University
New Mexico State University
North Dakota State University
Oklahoma State University
Pennsylvania State University
Purdue University
Rutgers University-Cook College
Seton Hill College
South Dakota State University
Tennessee State University
University of Arkansas
University of Florida
University of Hawaii at Manoa
University of Idaho
University of Illinois at Urbana-Champaign
University of North Dakota
University of Vermont
University of Wisconsin-River Falls
University of Wisconsin-Stout
Virginia Polytechnic Institute and State University
The Multicultural Scholars Program ultimately aims to increase the
participation of America's diverse talent in the food and agricultural
work force and to advance the educational achievement of all Americans.
The program strives to attract and educate more students from groups
currently underrepresented in the food and agricultural sciences for
careers in agriscience and agribusiness. The program accomplishes these
goals by providing undergraduate scholarships for outstanding students
from such underrepresented groups. The program is open to all colleges
and universities. Since the program began in 1994, 206 scholarships
have been provided. The Federal investment in the program leverages
state and private support via a 25 percent matching requirement.
USDA National Needs Graduate Fellowships Grants Program
Institutions funded in fiscal year 1996 are:
Colorado State University
Cornell University
Iowa State University
Kansas State University
Michigan State University
North Carolina State University
Ohio State University
Pennsylvania State University
Purdue University
Texas A&M University
University of Missouri
University of Minnesota
University of Nebraska
University of Chicago
University of Illinois at Urbana-Champaign
University of Florida
University of California, Davis
University of Wisconsin-Madison
University of Washington
Virginia Polytechnic Institute and State University
Begun in 1984, the USDA National Needs Graduate Fellowships Grants
Program seeks to stimulate the development of food and agricultural
scientific expertise in targeted national need areas. This program
represents a key investment strategy, as it is the only Federal program
targeted specifically to the recruitment and training of pre-doctoral
students for critical food and agricultural scientific positions. The
program achieves its goal by providing funds competitively to
universities for attracting and supporting outstanding graduate
students to pursue advanced degrees in areas of the food and
agricultural sciences experiencing shortages of expertise. Over the 12
years of this program, approximately 915 fellows have been trained
within 6 areas, namely Plant and Animal Biotechnology; Human Nutrition
and/or Food Science; Water Science; Engineering--Food, Forest Products,
or Agricultural; and, Marketing or Management--Food, Forest Products,
or Agribusiness. Graduates of the program are working in private
industry, with such major companies as Kellogg, Nabisco, Kraft, General
Foods, American Express Company, and General Mills, as well as with
major universities. They hold such positions as Product Engineer,
Research Scientist, Econometrician, Chemical Engineer, Extension
Economist, and teaching positions from Instructor to Professor.
Tribal Colleges Endowment Fund
All 29 tribally controlled Land-Grant Institutions were funded in
the Tribal Colleges Endowment Fund in fiscal year 1996. They are:
Bay Mills Community College, MI
Blackfeet Community College, MT
Cheyenne River Community College, SD
College of the Menominee Nation, WI
Crownpoint Institute of Technology, NM
D-Q University, CA
Dull Knife Memorial College, MT
Fond du Lac Tribal and Community College, MN
Fort Belknap College, MT
Fort Peck Community College, MT
Fort Berthold Community College, ND
Haskell Indian Nations University, KS
Institute of American Indian Arts, NM
Lac Courte Oreilles Ojibwa Community College, WI
Leech Lake Tribal College, MN
Little Hoop Community College, ND
Little Big Horn College, MT
Navajo Community College, AZ
Nebraska Indian Community College, NE
Northwest Indian College, WA
Oglala Lakota College, SD
Salish Kootenai College, MT
Sinte Gleska University, SD
Sisseton Wahpeton Community College, SD
Sitting Bull College, ND
Southwestern Indian Polytechnic Institute, NM
Stone Child College, MT
Turtle Mountain Community College, ND
United Tribes Technical College, ND
The Tribal Colleges Endowment Fund, launched in 1996, distributes
interest earned by an endowment established for the 29 tribally
controlled Land-Grant Institutions, as authorized by law in 1994. The
Endowment Fund seeks to enhance education in food and agricultural
sciences and related areas for Native Americans by building educational
capacity at these institutions in the areas of curricula design and
materials development, faculty development and preparation for
teaching, instruction delivery systems, experiential learning,
equipment and instrumentation for teaching, and student recruitment and
retention.
Tribal Colleges Education Equity Grants
All 29 tribally controlled Land-Grant Institutions were funded
under the Tribal Colleges Education Equity Grants Program in fiscal
year 1996. See above list of institutions.
This program, launched in fiscal year 1996, is a formula program
designed to enhance educational opportunities for American Indians by
strengthening instruction in the food and agricultural sciences at 1994
Land-Grant Institutions. This is accomplished by strengthening
instructional programs in the food and agricultural sciences at the 29
tribally controlled colleges designated as the 1994 Land-Grant
Institutions. These institutions serve approximately 14,000 American
Indian students. Funded projects focus on undergraduate and graduate
studies in the food and agricultural sciences and must address one or
more of the following need areas: (1) Curricula Design and Materials
Development; (2) Faculty Development and Preparation for Teaching: (3)
Instruction Delivery Systems; (4) Student Experiential Learning: (5)
Equipment and Instrumentation for Teaching: and (6) Student Recruitment
and Retention. Each institution is required to develop a plan of work
that addresses the institution's long-range goals and shows how these
funds will be used to strengthen institutional capacities.
challenge grants program
Question. Why is increased funding being requested for the
Institution Challenge Grants program for fiscal year 1998?
Answer. American higher education in the food and agricultural
sciences must continually address a number of issues to maintain its
quality and competitiveness. The USDA Higher Education Institution
Challenge Grants Program is the Department's flagship initiative to
ensure excellence in education by stimulating and providing incentives
for institutional change. This program has shown its worth by moving
higher education in the following directions over the last seven years.
An increasing number of joint degree programs in agribusiness have
emerged between colleges of business and colleges of agriculture.
Faculty in colleges of agriculture are increasing their skill in
working with multicultural student bodies through specially designed
workshops. Significant numbers of faculty have participated in
workshops that have reoriented them from use of traditional lecture
methods to experiential learning and problem solving for students.
Undergraduate students more often participate in research in
biotechnology, environmental management, and other important emerging
fields. Institutions more often partner to accomplish their educational
goals. However, current funding is not adequate to meet the needs or to
fully capture the potential benefits to be derived from the program.
For example, there are critical needs to expand curricula to include
global perspectives and to enhance graduate education, which the
program does not have the capacity to accomplish. The changing nature
of higher education and its students requires more emphasis on the
utilization of various new delivery systems to promote outreach and
flexibility and the creation of partnerships among institutions to make
higher education more efficient and cost-effective. Over time,
inflation has negatively impacted project scope. Over the past seven
years, only about 22 percent of approximately 1,000 excellent proposals
generated by this highly competitive program could be funded. In fiscal
year 1997, this program experienced a cut of $.35 million from the
level of fiscal year 1996. An increase in 1998 will return the program
to the 1996 funding level and will enable four to five more colleges to
undertake projects, including international projects, that promote
excellence in agricultural education. In order to really achieve the
potential of this program to change the face of food and agricultural
higher education at both the undergraduate and graduate levels,
sufficient funds must be allocated. At the current and projected size,
the potential benefits cannot be fully realized.
special research grants
Question. The fiscal year 1998 budget proposes a new $2 million
food safety competitive special research grants program. Why is a
special research grants program being proposed? You are also proposing
to target food safety increases through the National Research
Initiative (NRI) competitive grants program. Why is a special research
grants program needed? Why can't this research be funded through the
NRI?
Answer. The proposed special research grant will be more responsive
and able to address more specific research priorities within a shorter
time frame. In the past, CSREES has been asked by FSIS to assist them
with research that would address their specific needs in providing a
scientific basis for setting policies or providing information to food
producers, processors, handlers, and consumers; to develop improved
analytical techniques for detecting and measuring contaminants in
foods; and to develop intervention techniques that would prevent or
eliminate contaminants. The Agency funds food safety research through
formula funds (including Hatch, Evans-Allen, and Animal Health and
Disease Acts), competitive grants (through the NRICGP), and
Congressionally directed special research grants. The research is
conducted by the Agency's land-grant university partners and other
cooperators. The current programs afford little flexibility for the
Agency to direct its food safety research in a timely manner to address
specific high priority needs identified by USDA action agencies and
other federal and state food safety experts. The new special grants
program will increase the Agency's ability to respond rapidly to
research questions. NRI funding allows the Agency to research more
fundamental, often longer-term, research problems.
binational agricultural research and development--bard
Question. The budget proposes $2.5 million for United-States-Israel
Binational Agricultural Research and Development program (BARD), a
$500,000 increase above the 1997 level. Why is an increase in funding
for this program being proposed, especially given the fact that the
Administration is proposing the elimination of funding for a number of
on-going CSREES activities?
Answer. The $2.5 million requested for the BARD program would
restore funding to the level provided by CSREES for BARD in each of the
fiscal years 1994, 1995, and 1996. CSREES also requested $2.5 million
for BARD for fiscal year 1997, but only $2 million was appropriated.
Restoration of the $2.5 million funding level for BARD is requested
because the Administration supports increasing the proportion of
agricultural research funding that is awarded by merit review with peer
evaluation, as is the case with the BARD program. The Administration
also believes that the dollar-for-dollar matching support provided by
the Israeli government under BARD results in a high quality return on
the U.S. investment in the program. Further, each project funded under
the BARD program is a joint effort between U.S. and Israeli scientists,
which exemplifies the integrated approach to problem solving preferred
by the Administration in meeting the challenges facing U.S. and global
agriculture. The challenges of today and the future are more complex
than those we have solved in the past and require the multi-functional,
multi-disciplinary, multi-institutional approaches found under the BARD
program.
Question. Please indicate the research projects which have been
carried out under this program for each of the last five fiscal years.
Answer. The BARD program has been funded through CSREES in fiscal
years 1994 through 1997. While none of the 1997 funds have been awarded
to date, a listing of the research projects funded in fiscal years
1994, 1995, and 1996 follows:
Binational Agricultural Research and Development Program--Fiscal year
1994
University of California:e Amount
Davis, CA:
Utilization of NMR Technology for Internal Non-
Destructive Quality Evaluation of Fruits and
Vegetables.......................................... $135,000
Grapes, Wines, and Byproducts as Potential Sources of
Antioxidants........................................ 120,000
Riverside, CA:
Ecology, Population Dynamics and Genetic Diversity of
Epi- phytic Yeast Antagonists of Postharvest
Diseases of Fruit................................... 125,000
Characterization of Field-Scale Solute Transport in
Spatially Variable Unsaturated Field Soils.......... 78,120
Colorado State University, Ft. Collins, CO: Evaluation of
Naked Proviral DNA as a Vaccine for Ovine Lentivirus
Infection................................................. 140,000
University of Florida, Gainesville, FL:
Strategies to Optimize Reproduction in Heat Stressed Dairy
Cattle.................................................. 120,000
Citrus Tristeza Virus: Molecular Approaches to Cross
Protection.............................................. 144,000
Iowa State University of Science and Technology, Ames, IA:
Molecular Markers for Immunocompetence and Resistance to
Disease................................................... 127,000
University of Minnesota, Minneapolis, MN: Bacterial
Mineralization of Atrazine as a Model for Herbicide
Biodegradation............................................ 119,000
North Carolina State University, Raleigh, NC:
Aspects of Sugar Metabolism in Fruit as Determinants of
Fruit Quality........................................... 125,000
Non-Destructive Quality Sensing of High-Valued
Agricultural Commodities through Response Analysis...... 113,000
University of Nevada, Reno, NV: Mechanisms for Control of Leaf
Growth during Salinity Stress............................. 125,000
Cornell University, Ithaca, NY:
Improving Preferential Flow Modules by Experimentation.... 107,000
Consequences of Nonequilibrium Pesticide Fate Processes on
Profitability of leaching............................... 141,000
Discovery and Use of Genes and Gene Products Coding for
Proteins Useful in Biocontrol........................... 131,000
Texas A&M Research Foundation, College Station, TX: Pathogenic
Streptococcus in Tilapia: Rapid Diagnosis Epidemiology and
Patho- physiology......................................... 94,000
Binational Agricultural Research and Development Program--Fiscal year
1995
University of California:e Amount
Berkeley, CA: Relationship of Genes Conferring Epiphytic
Fitness and Internal Multiplication in Plants in Erwinia
Herbicola............................................... $137,500
Davis, CA:
Involvement of the TMV-MP in the Control of Carbon
Metabolism and Partitioning in Transgenic Plants.... 133,000
Environmental, Developmental and Physiological Bases
of Curcurbit Seed Quality \1\....................... 115,370
Isoflavrnoid Regulation of Root Bacteria.............. 125,000
Wooliness in Peaches and Nectarines................... 109,778
Targeting of an Expressed Insect Selective Neurotoxin
by its Recombinant Baculovirus...................... 102,000
Genetic and Biochemical Characterization of Fructose
Accumulation........................................ 106,614
Riverside, CA: Structural Elements and
Neuropharmacological Features Involved in the
Insecticidal Properties of an Alpha Scorpion Neurotoxin. 105,000
University of Florida, Gainesville, FL:
Mapping Quantitative Trait Loci in the Woody Perennial
Plant Genus Citrus...................................... 130,000
Identification of DNA..................................... 125,000
Purdue Research Foundation, West Lafayette, IN: An Inquiry
into the Phenomenon of Enhanced Pesticide Transport Caused
by Effluents.............................................. 109,200
Michigan State University, East Lansing, MI: Analysis of
Senescence-inducible Ribonuclease in Tomato............... 116,700
University of Nebraska, Lincoln, Nebraska: Pathogenicity and
Sclerotia Development of Sclerotinia sclerotiorum:
Involvement of Oxalic Acid and Chitin Synthesis........... 50,100
Cornell University, Ithaca, NY:
Analysis of Quantitative Traits in Pepper using Molecular
Mark- ers............................................... 124,200
Polyphenoloxidases--Expression, Assembly, and Function.... 122,410
Texas A&M Research Foundation, College Station, TX: Improving
Productivity of Cotton in Arid-Region Agriculture: An
Integrated Physiological/Genetic Approach................. 110,000
Virginia Polytechnic Institute and State University,
Blacksburg, VA: Environmental, Developmental, and
Physiological Determinants of Curcurbit Seed Quality \1\.. 63,820
University of Wisconsin, Madison, WI: Lymphocyte Response to
Genetically-engineered Bovine Leukemia Virus Proteins..... 125,000
Binational Agricultural Research and Development Program--Fiscal year
1996
University of California:e Amount
Berkeley, CA: Functional Biogenesis of V-ATPase in the
Vacuolar System of Plants............................... $81,000
Davis, CA:
Enhancement of Baculovirus Potency by Expression of
Synergistic Scorpion Toxin.......................... 125,000
Genetic Diversity of Resistance Gene Clusters in Wild
Population of Lectuca............................... 125,000
Biosensors for On-line Measurement of Reproduction
Hormones and Milk Proteins to Improve Dairy Herd
Management.......................................... 145,870
Resistance to Tomato Yellow Curl Virus by Movement
Protein in a Single Cultivar........................ 121,250
Creating Genetic Variation in Tilapia Through the
Creation of an Artificial Center of Origin \2\...... 145,500
Mapping and Tagging by DNA Markers of Emmer Alleles
that Improve Traits in Wheat........................ 137,000
Rhizosphere Ecology of Plant-Beneficial Microorganisms 130,410
Molecular Genetic Analysis of Citrus Acid Accumulation
in Citrus Fruit..................................... 125,000
Purdue Research Foundation, West Lafayette, IN:
Osmotin and Osmotin-like Proteins as a Novel Source for
Phytopathogenic Fungal Resistance in Transgenic
Carnation............................................... 125,000
Regulated Expression of Yeast FLP Recombinase in Plant
Cells................................................... 135,610
Elicitor-Induced Response in Lycoperscor Esculentus....... 125,000
Study of the Basis for Toxicity and Specificity of
Bacillus Thuringiensis-Endotoxins....................... 113,630
Cornell University, Ithaca, NY: Virus Synergy in Plants....... 124,480
The Pennsylvania State University, University Park, PA:
Developing Nutritional-Management Protocols Which Prevent
Tibial Dyschondroplasia................................. 125,000
Ozone Altered Stomatal/Guard Cell Function: Whole Plant
and Single Cell Analysis................................ 135,400
Identification of Staphylococcus Aureus Virulence Factors
Associated With Bovine Mastitis......................... 142,000
Texas A&M Research Foundation, College Station, TX: Role of
Placental Lactogen in Sheep............................... 116,130
Virginia Polytechnic Institute and State University,
Blacksburg, VA: Creating and Characterizing Variation in
Tilapia by Creating and Center of Variation \2\........... 65,700
\1\ Collaborative project funded at the University of California, Davis,
and Virginia Polytechnic Institute and State University.
\2\ Collaborative project funded at the University of California, Davis,
and Virginia Polytechnic Institute and State University.
---------------------------------------------------------------------------
special research grants
Question. For each of the special research grants listed below
which the Administration proposes to continue for fiscal year 1998,
please indicate how the current funding is being allocated, the
research activities being carried out, the location where the research
is being performed, and what has been accomplished to date under the
program: Critical Issues, Expert IPM Decision Support System, Global
Change, Integrated Pest Management and Biological Control, Minor Crop
Pest Management--IR-4, National Biological Impact Assessment Program,
Pesticide Impact Assessment, Pest Management Alternatives, Rural
Development Centers, and Water Quality.
Answer. The information for the special research grants follows:
Critical Issues.--These grant funds, which are appropriated at
$200,000 in fiscal year 1997, support research on critical issues
impacting agriculture that require immediate attention. These funds are
intended to initiate research efforts until other resources can be
secured to address the critical issues. Six research proposals have
been funded to address potato late blight and two research proposals
have been funded to address vesicular stomatitis. The potato late
blight work is being carried out at Washington State University, Oregon
State University, the University of Idaho, the University of Wisconsin,
and the Pennsylvania State University. The first North American Late
Blight Workshop was convened which involved potato growers and
processors, national potato organizations, university scientists, and
the chemical industry. The major contribution of this workshop was the
resulting set of recommendations for short-and long-term efforts needed
to solve this problem. The vesicular stomatitis work is being carried
out at Colorado State University and the University of Arizona. Work
has been initiated to focus on the transmission of this virus, which
was identified by commodity groups, regulatory veterinarians, and USDA
researchers as a high priority problem.
Expert IPM Decision Support System.--A prototype information and
decision support system was developed in collaboration with Purdue
University and the Department of Energy's Argonne National Laboratory
that integrates and manages information from multiple data sources.
Information on the status of EPA review of pesticides, losses caused by
pests, status of alternative tactics, status of minor use
registrations, current research in progress, and priorities of IPM
implementation teams are integrated in the Pest Management Information
Decision Support System--PMI/DSS. The appropriation for this grant in
fiscal year 1997 is $177,000. The PMI/DSS supports a USDA/EPA
Memorandum of Understanding to find alternatives to pesticides under
regulatory review or being lost due to genetic resistance. The data
base has identified priorities for the Pest Management Alternatives
request for proposals for the past two years and interacts with the
project system of the IR-4 Minor Use Registration Program. It also
interacts with the identification of priorities for research and
extension activities in the regional IPM special grant and special
projects. It provides a mechanism for growers and grower organizations
to interact with the priority process, and the ultimate result is to
help insure that farmers have alternatives for managing pests at the
specific local level. Work is carried out by CSREES National Program
Leaders in IPM, NAPIAP, and IR-4 program areas working on PMI/DSS. The
Argonne National Laboratory has a Washington, D.C. office where
information, decision support personnel are housed, and there are daily
interactions between CSREES and other USDA staff personnel, the program
addresses priority commodity pest management needs due to voluntary
pesticide cancellations and regulatory cancellations responding to the
MOU and supplemental MOU between USDA and EPA. In fiscal year 1996,
there were 58 pesticides and 374 uses identified and prioritized. The
process included information on cancellations furnished by EPA,
selected uses were sent to the states NAPIAP and IPM network, and
impacts of cancellations effecting individual state agriculture
reported back for compilation in the decision support system.
Global Change.--The work supported by this grant has a fiscal year
1997 appropriation of $1,657,000. CSREES is in the process of
establishing a network for monitoring surface UV-B radiation which will
meet the needs of the science community of the U.S. and will be
compatible with similar networks being developed throughout the world.
The discovery of a deterioration of the stratospheric ozone layer and
the occurrence of an ozone hole over polar regions has raised concern
about the real potential for increased UV-B irradiance reaching the
surface of the earth and the significant negative impact this could
have on all biological systems, including man plus animals and plants
of agricultural importance. This research is closely coordinated with
other Federal agencies involved in the U.S. Global Change Research
Program UV-Monitoring Network Plan. Colorado State University is
managing the operating network which, when completed, will include all
regions of the country. At least 30 sites are planned for the
climatological network including sites in Hawaii, Alaska, and Puerto
Rico. Ten sites have been operational with broad band instruments for
up to three years, and it is planned to have at least twenty sites
operational with new generation instruments by the summer of 1997. The
research level network will begin with the first instrument to be
installed at the Department of Energy Solar Radiation site near Ponca
City, Oklahoma, as part of the Atmospheric Radiation Measurements field
network. The USDA UV-B Network is to provide accurate, geographically-
dispersed data on UV-B radiation reaching the surface of the earth, and
to detect trends over time in this type of radiation. A network of a
new multi-band instrument, which will provide the spectral information
needed to support both biological and atmospheric science research and
to serve as ground-truth for satellite measurements, was made available
in 1996. These instruments have been deployed and are currently in
operation at ten monitoring sites across the U.S. To gain network
experience, broadband instruments, along with ancillary instruments,
had been installed at ten selected field sites and operated for the
last 28-36 months. An additional ten sites have been developed during
the last 12 months, including those equipped with the new multi-band UV
instrument. Data from all sites is transmitted daily to Colorado State
University for analysis, distribution, and archiving.
Integrated Pest Management/Biological Control.--Research supported
by IPM special grants, which has a fiscal year 1997 appropriation of
$2,731,000, continues to provide a science basis for the development of
alternative approaches for managing pests including insects, mites,
weeds, plant pathogens, and ectoparasites. Emphasis of the program has
been on enhanced natural control, which emphasizes increased use of
biological control, cultural control, and host resistance practices and
the management of genetic resistance of pests. Research is being
carried out in nearly all of the State Agricultural Experiment
Stations. The original and current goal is to bring IPM into the 21st
Century with a paradigm shift from past sole dependence on pesticides
to an emphasis on natural control integrated with selective pesticides
and biopesticides when pest population densities warrant their use. The
more recent increase in joint research/extension collaboration has
assisted bringing the accomplishments of research into implementation
reality. All four regions have produced 12- to 15-page brochures
documenting the impacts of research and extension efforts. IPM advances
on 25-30 commodities are described in these brochures.
Minor Crop Pest Management, IR-4.--The Pest Management for Minor
Crops IR-4 Program, formerly the Pesticide Clearance Program, is a
joint effort between the State Agricultural Experiment Stations,
CSREES, and ARS with a fiscal year 1997 appropriation of $5,711,000.
IR-4 provides the national leadership, coordination, and focal point
for obtaining tolerance and safety data for pesticides and biological
control agents for specialty crops such as horticultural crops. With
Federal registration resulting from this research, a large number of
small acreage crops such as vegetables, fruits, nuts, spices, and other
specialized crops have been provided with needed crop protection
against pests. Field work is performed at the State and Territorial
Experiment Stations. Laboratory analysis is conducted primarily at the
California, New York, Florida, and Michigan Agricultural Experiment
Stations. Protocol development, data assimilation, writing petitions,
and registration processing are coordinated through the New Jersey
Agricultural Experiment Station. ARS is conducting minor use pesticide
studies at several locations also. This research effort has been
responsible for data in support of 2,074 food use clearances, which
include 1,127 since 1984, 3,602 ornamental registrations, and research
on 26 biopesticides resulting in 18 minor use registrations.
National Biological Impact Assessment Program.--This program, with
a fiscal year 1997 appropriation of $254,000, was established to
facilitate and assess the safe application of new technologies for the
genetic modification of animals, plants, and micro-organisms to benefit
agriculture and the environment. This program supports the agricultural
and environmental biotechnology community by providing useful
information resources to scientists, administrators, regulators,
teachers, and the interested public. The research for this program is
being conducted by the Virginia Polytechnic Institute and State
University. This computer-based information system now includes texts
of Federal biotechnology regulations, proposed rules, and policy
statements; databases of biotech companies, research centers,
institutional biosafety committees, and state regulatory contacts;
resource lists of publications, directories, bibliographies, and
meetings; monthly newsletters developed and distributed by this
program; relevant Federal Register announcements; and links to other
electronic information resources. In addition, this program provides
biosafety training through workshops for academic and corporate
scientists, biosafety officers, and state regulators.
Pesticide Impact Assessment Program.--Research funded by the
National Agricultural Pesticide Impact Assessment Program--NAPIAP--
which has a fiscal year 1997 appropriation of $1,327,000, discovers,
gathers, publishes, and distributes information relating to the use and
effectiveness of pest management alternatives essential to the
maintenance of U.S. agricultural crops and livestock production. These
data involve evaluating the biologic and economic impact and
consequences of restricting the use of key pesticides either through
voluntary cancellations or regulatory action. This work is being
carried out at 53 state and territorial Agricultural Experiment
Stations. Competitively awarded research funds are coordinated through
a lead state in each of the four regions of the U.S.--California, West;
Ohio, North Central; Pennsylvania, Northeast; and Florida, South.
NAPIAP's goals are defined in its strategic plan as: first, in
collaboration with USDA, EPA, and Land-Grant partners, to focus
activities on collecting and delivering high quality, science-based
pest management information for use in the regulatory process; and
second, maintain and enhance a strong partnership between the USDA and
the Land-Grant System in order to continue the positive interactive
flow of vital pest management information between the USDA, the
regulatory community, and production agriculture.
Pest Management Alternatives.--The research supported by this
grant, which has a fiscal year 1997 appropriation of $1,623,000,
represents a new proactive way to address and interface with
environmental regulatory issues confronting agriculture. The goal of
this research is to provide farmers and other pest managers with
alternative pest management approaches and technologies when pesticide
tools are lost due to regulatory action, voluntary withdrawal by the
registrant, or the development of resistance. This research is being
carried out by State Agricultural Experiment Stations, Land-Grant
Universities, and other public and private research institutions and
organizations. Examples of research supported by this program are (1)
provides farmers and others with replacement technologies for
agricultural chemicals lost due to regulatory actions, potential
regulatory actions, or due to voluntary cancellation by registrants for
which producers do not have effective alternatives; (2) provides
effective alternative technologies for situations where pest resistance
to pesticides limit adoption of integrated pest management strategies;
and (3) facilitates implementation of new technologies on farms,
ranches, forests, urban landscapes, and in homes, public, and
commercial buildings.
Rural Development Centers.--The function of the Rural Development
Centers, which has a fiscal year 1997 appropriation of $423,000, is to
increase the productivity of regional faculty both in doing research on
rural issues and in using research to do effective outreach with rural
communities. The number of research faculty who are addressing broader
rural issues is declining in many places. The multi-disciplinary and
multi-state work, supported by the Centers, becomes even more crucial
in a period of reduced research emphasis. Critical needs are being met
by Center's support, including public lands policy, changing rural
migration patterns, fiscal alternatives for local governments, and
forest stewardship education. The regional rural development centers
include the following: Northeast Regional Center for Rural Development,
Pennsylvania State University; North Central Regional Center for Rural
Development, Iowa State University; Southern Rural Development Center,
Mississippi State University; and Western Rural Development Center,
Oregon State University. There is also a rural development project at
North Dakota State University. The Rural Development Centers' mission
is to strengthen rural families, communities, and businesses by
facilitating collaborative socio-economic research and extension.
Research programs are undertaken after evaluating broader regional and
national priorities.
Water Quality.--This national, competitively-awarded grants
program, which has a fiscal year 1997 appropriation of $2,757,000,
supports research to investigate the impacts of non-point source
pollution from agriculture on water quality and to develop improved,
sustainable agricultural practices and systems that protect the
environment and are economically profitable. This program also supports
research on five Management Systems Evaluation Area (MSEA) projects as
part of the Midwest Initiative on Water Quality to develop new farming
systems that protect water quality, with research located at 10 sites
throughout the Corn Belt. Funds provided under the Water Quality
Program have been awarded to institutions in virtually every state, so
work is being carried out in all parts of the country. The MSEA
projects of the Midwest Initiative on Water Quality are headquartered
in Iowa, Minnesota, Missouri, Nebraska, and Ohio, with satellite
locations in North Dakota, South Dakota, and Wisconsin. During the past
three years, focus and allocation of resources have increased for
surface water quality. Major progress has been made on these goals.
Nitrogen testing research and implementation of the Pre-sidedress
Nitrogen Test in the Northeast and Midwest is helping producers match
the supply and demand for nitrogen, thus reducing excess application.
Also, in the Pacific Northwest, nitrate lost from the root zone of
irrigated potatoes can be effectively recaptured by following with a
grain or forage crop. The Management System Evaluation Area modeling
group has adapted, improved, and verified the usefulness of the Root
Zone Water Quality Model as a tool for extending MSEA results beyond
the research sites.
rangeland research
Question. The fiscal year 1998 request proposes to terminate
funding for rangeland research. What is the justification for this
proposal? For each of fiscal years 1993-1997, please indicate how these
funds have been allocated and the specific activities have been
supported through the program.
Answer. The proposed elimination of this program is consistent with
the emphasis on high priority national interest programs in the 1998
CSREES budget. Although this program is proposed for elimination,
alternate sources of funding, including the Hatch Act formula and
related base funded programs, permit institutions to fund research in
those areas identified as high priority. This flexibility could provide
for maintaining some of the rangeland research programs if the State
institutions wish to continue the research. These projects could also
be submitted for competition and possible funding under CSREES'
National Research Initiative--NRI--Program.
The following tables list funds allocated and activities for the
Rangeland Research program from fiscal years 1993-1996. No awards have
been made in fiscal year 1997. The solicitation for applications for
the fiscal year 1997 program was published in the March 1997 Federal
Register. Proposals are due to CSREES by May 17, 1997.
Rangeland research
Fiscal year 1993:/title Amount
Colorado State University, Cattle Preference as a Tool to
Modify Riparian Vegetation.............................. $77,200
University of Nebraska, Influence of Genetic Variation in
North American Leafy Spurge on Apthona nigriscrutis..... 74,740
Texas A&M University, Spatial Modeling of Succession in a
Sub-tropical Savanna: An Integrated Approach............ 73,982
Utah State University, The Importance of Food and
Companionship in Choice of Foraging Location by Sheep... 77,200
USDA-ARS, Characterization of Seedbed Microclimate for
Burn-Rehabilitation Planning............................ 72,572
USDA-FS, Regulation of Seed Germination in Facultatively
Fall-Emerging Grasses................................... 77,175
--------------------------------------------------------------
____________________________________________________
Subtotal, Grants...................................... 452,869
SBIR...................................................... 6,911
Biotechnology Risk Assessment............................. 970
Federal Administration.................................... 14,250
--------------------------------------------------------------
____________________________________________________
Total................................................... 475,000
==============================================================
____________________________________________________
Fiscal year 1994:
University of Arizona, Significance of Local Adaptation in
Rangeland Revegetation with Native Species.............. 34,549
Oregon State University, Quantifying the Impact of
Rangeland Management on Stream Temperatures............. 68,500
South Dakota University, Effects of Stocking Rate and
Grazing System on Patterns of Tiller Utilization........ 69,500
Texas A&M University, Tree/Shrub Influence on the Nitrogen
Cycle of a Subtropical Savanna Ecosystem................ 69,500
University of South Dakota, Intraspecific Action of
Allelochemicals in Leafy Spurge--Euphorbia esula L.--... 13,790
Utah State University, Biological Control of Dyer's Woad
with a Pathogenic Rust Fungus........................... 61,000
Washington State University, The Influence of Grazing on
Long-Term Site Productivity of Transitory Range......... 68,500
USDA-FS, Regeneration Biology of Shadscale--Atriplex
conferti- folia......................................... 68,500
--------------------------------------------------------------
____________________________________________________
Subtotal, Grants...................................... 453,839
SBIR...................................................... 6,911
Biotechnology Risk Assessment.......................................
Federal Administration.................................... 14,250
--------------------------------------------------------------
____________________________________________________
Total................................................... 475,000
==============================================================
____________________________________________________
Fiscal year 1995:
Montana State University:
Livestock, Forage, and Grasshopper Interactions:
Cumulative Effects of Grazing....................... 79,950
Integrated Management for Spotted Knapweed Infested
Range............................................... 57,050
Texas A&M University:
Hydrologic Mechanisms Determining Plant Species
Interactions in Grazed Savannas..................... 79,992
R:FR Regulation of Tiller Initiation: Is It Applicable
to Range Grasses?................................... 79,354
Bush Removal and Regrowth: Implications for Water Use
and Aquifer Recharge................................ 75,835
Utah State University, Behavioral Bases for Varied Diets
of Ruminants............................................ 79,354
--------------------------------------------------------------
____________________________________________________
Subtotal, Grants...................................... 451,535
SBIR...................................................... 9,215
Biotechnology Risk Assessment.......................................
Federal Administration.................................... 14,250
--------------------------------------------------------------
____________________________________________________
Total................................................... 475,000
==============================================================
____________________________________________________
Fiscal year 1996:
Colorado State University, Grazing Impacts on
Infiltration, Runoff, and Erosion in a Montane Riparian
Ecosystem............................................... 79,999
Montana State University, Do Windbreaks Minimize Stress on
Cattle Grazing Winter Range?............................ 59,941
Texas A&M University:
Quantification of Vegetation Transitions and
Thresholds on Diverse Landscapes.................... 79,893
Does Soil Carbon and Nitrogen Accumulation Beneath
Plants Regulate Bunchgrasses?....................... 80,000
USDA-FS:
Nitrogen and Phosphorus Mineralization in Conifer and
Aspen Soils......................................... 71,717
Basin Big Sagebrush Dominated Riparian Corridors-Dry
Meadows as an Alternative Stable State.............. 79,985
--------------------------------------------------------------
____________________________________________________
Subtotal, Grants.................................. 451,535
SBIR...................................................... 9,215
Biotechnology Risk Assessment.......................................
Federal Administration.................................... 14,250
--------------------------------------------------------------
____________________________________________________
Total................................................... 475,000
sustainable agriculture program
Question. How is the $8 million currently available for the
Sustainable Agriculture Program being spent? For each of fiscal years
1993-1997, please show how these funds have been allocated and the
specific activities which have been supported through the program.
Answer. For fiscal year 1997, the $8 million allocated for
sustainable agriculture spending on research and education is being
awarded primarily through a regional competitive grants program. Of the
funds being awarded through the four regional programs, roughly 90
percent is spent on competitive grants of $30,000 to $150,000 to
universities, non-profit organizations, or public agencies. The
remaining funding supports grants to farmers and ranchers for research,
demonstration, or education efforts on their farm; these grants are
typically under $5,000 per project. About 2 percent of the total fiscal
year 1997 funds are being used for general sustainable agriculture
education efforts through the National Agricultural Library and the
Sustainable Agriculture Network, and about 2 percent of funds are used
for national communications and program coordination. Less than 1
percent of funds were awarded directly from national office for special
education projects or workshop and conference support. The regional
funds typically provide for about 11 to 14 institution/agency research
or education projects, and 25 to 35 farmer projects per year in each
region.
Detailed fiscal year allocations are as follows:
----------------------------------------------------------------------------------------------------------------
Fiscal year--
----------------------------------------------------------------
1993 1994 1995 1996 1997
----------------------------------------------------------------------------------------------------------------
Regional allocations (divided among 4 regions). $4,632,785 $6,229,900 $7,159,520 $7,014,000 $7,077,700
National initiatives/projects \1\.............. 1,760,000 804,540 551,747 685,860 487,958
National communications/coordination........... ........... ........... ........... (346,000) (219,000)
National Agricultural Library.................. ........... ........... ........... (116,200) (122,010)
SARE Sustainable Agriculture Network........... ........... ........... ........... (80,000) (82,000)
National projects (education, conferences)..... ........... ........... ........... (143,660) (64,948)
----------------------------------------------------------------
Subtotal................................. 6,392,785 7,034,440 7,711,267 7,699,860 7,565,658
Federal Administration......................... 201,750 222,000 243,360 243,000 240,000
SBIR........................................... 130,465 143,560 157,373 157,140 194,000
Biotechnology Risk Assessment.................. ........... ........... ........... ........... 342
----------------------------------------------------------------
Total, SARE.............................. 6,725,000 7,400,000 8,112,000 8,100,000 8,000,000
----------------------------------------------------------------------------------------------------------------
\1\ In 96 and 97, national allocations were more specifically broken out into subcategories.
headquarters management
Question. How much will CSREES expend for Headquarters management
costs in fiscal year 1997? How does this correspond to your percentage
program assessment?
Answer. It is estimated that CSREES will spend $39.3 million in
fiscal year 1997 for Headquarters management costs. These funds will be
used to cover the salaries and benefits of Federal staff, travel,
printing, supplies, equipment and other miscellaneous expenses
necessary for the administrative oversight and coordination of CSREES
programs. Funds from federal administrative set-asides, carry over
funds, and reimbursable agreements with other Federal agencies are used
to cover these operating costs. Management costs account for 4.3
percent of the total fiscal year 1997 appropriation for CSREES. With
the $7.1 million available in Direct Federal Administration funds,
excluding earmarked grants and projects, and the current legislative
set-asides of 3 or 4 percent, CSREES has continued to operate on
extremely low administrative costs.
food and agricultural education information system
Question. CSREES recently gave a presentation on the Food and
Agricultural Education Information System (FAEIS). How much funding is
being allocated for this system for fiscal year 1997? Is funding
included in the President's fiscal year 1998 budget request for this
system? If so, where is it included?
Answer. In fiscal year 1997, Congress directed $150,000 from the
funds appropriated for the USDA Higher Education Challenge Grants
Program be made available to support the continued operations of the
Food and Agricultural Education Information System. This provided
assured funding for the information system that furnishes the
Department and its university partners with necessary baseline data for
planning and coordinating efforts directed towards supporting higher
education in the areas of food, agriculture, natural resources,
forestry, family and consumer sciences, and veterinary medicine. While
the fiscal year 1998 budget request does not explicitly cite this
system, it is included.
national research initiative
Question. Please provide a summary of the geographical distribution
of the competitive research grants awarded under the National Research
Initiative for the last two years showing the state, entity and funding
level.
[The information follows:]
------------------------------------------------------------------------
Fiscal year--
State/recipient -------------------------
1996 1997
------------------------------------------------------------------------
Alabama:
Auburn University......................... $256,749 $378,265
University of Alabama, Birmingham......... ........... 133,352
University of Alabama, Huntsville......... ........... ...........
University of South Alabama............... ........... ...........
Alabama A&M University.................... 47,917 50,000
Alabama State University.................. ........... 45,000
-------------------------
Subtotal................................ 304,666 606,617
=========================
Arizona:
Arizona State University, Northern Arizona
University............................... 135,972 ...........
University of Arizona..................... 928,367 744,474
-------------------------
Subtotal................................ 1,064,339 744,474
=========================
Arkansas:
University of Arkansas.................... 407,223 552,039
University of Arkansas for Medical
Sciences................................. 121,682 198,918
-------------------------
Subtotal................................ 528,905 750,957
=========================
California:
California Institute of Technology........ 5,000 106,781
University of California, Berkley......... 991,885 797,303
University of California, Davis........... 2,151,309 1,621,411
Loma Linda University..................... ........... 106,694
University of Califomia, Los Angeles...... 238,032 111,544
University of California, Riverside....... 550,483 662,316
University of California, San Diego....... 208,643 97,073
University of California, Santa Barbara... ........... 116,283
University of California, Santa Cruz...... 97,357 ...........
California State University, San Marcos... 196,407 ...........
Metropolitan Water District of South.
California............................... ........... 110,233
Salk Institute for Biological Studies..... 186,958 ...........
Stanford University....................... ........... 43,822
USDA, ARS................................. 116,041 384,847
USDA, Forest Service, Pacific SW Station.. 228,798 204,602
Stephen W. Beam........................... 82,000 ...........
E. Harville............................... ........... 82,000
B. Manning................................ ........... 82,000
-------------------------
Subtotal................................ 5,052,913 4,526,909
=========================
Colorado:
Colorado State University................. 376,952 431,227
University of Colorado.................... 92,267 118,430
University of Colorado at Denver.......... 57,171 ...........
USDA, ARS Northern Plains Area............ 116,283 ...........
Midcontinent Ecological Sciences Center... ........... 111,814
-------------------------
Subtotal................................ 642,673 661,471
=========================
Connecticut:
University of Connecticut................. 229,876 173,409
Yale University........................... 106,835 92,220
Connecticut Agricultural Experiment
Station.................................. ........... 50,000
Economic Research Service................. ........... 48,691
Trinity College........................... ........... 43,743
-------------------------
Subtotal................................ 336,711 408,063
=========================
Delaware:
E.I. de Pont de Nemours & Co.............. 50,000 ...........
University of Delaware.................... 438,411 418,217
-------------------------
Subtotal................................ 488,411 418,217
=========================
District of Columbia: Carnegie Institute of
Washington................................... 196,662 101,927
=========================
Florida:
Florida A&M University.................... 97,278 ...........
Mote Marine Laboratory.................... 40,273 ...........
University of Florida..................... 939,951 480,779
University of South Florida............... 104,716 ...........
-------------------------
Subtotal................................ 1,182,218 480,779
=========================
Georgia:
Institute of Paper Science and Technology. 128,436 110,922
University of Georgia research Foundation. 233,222 923,535
USDA, ARS South Atlantic Area, Georgia.... 93,507 219,621
-------------------------
Subtotal................................ 455,165 1,254,078
=========================
Hawaii: University of Hawaii.................. ........... 87,212
=========================
Idaho: University of Idaho.................... 719,494 318,036
=========================
Illinois:
University of Illinois.................... 860,715 1,261,821
USDA, ARS Mid-West Area, Illinois......... 84,107 340,508
Illinois Institute of Technology.......... ........... 47,406
Jonathan E. Beever........................ 82,000 ...........
G. Copenhaver............................. ........... 82,000
-------------------------
Subtotal................................ 1,026,822 1,731,735
=========================
Indiana:
Purdue University......................... 1,991,636 ...........
Purdue Research Foundation................ ........... 977,198
Indiana University........................ ........... 185,116
University of Notre Dame.................. ........... 174,424
Sally E. Johnson.......................... 81,896 ...........
-------------------------
Subtotal................................ 2,073,532 1,336,738
=========================
Iowa:
Iowa State University..................... 790,254 1,416,549
University of Iowa........................ 243,086 ...........
Rebecca L. Wilson......................... 82,000 ...........
-------------------------
Subtotal................................ 1,115,340 1,416,549
=========================
Kansas:
Kansas State University................... 1,003,611 360,209
University of Kansas...................... 106.835 ...........
-------------------------
Subtotal................................ 1,110,446 360,209
=========================
Kentucky:
Murray State University................... 47,727 ...........
University of Kentucky.................... 509,585 261,929
Patrick D. Barnes......................... 82,000 ...........
Heather H. Wilkinson...................... 82,000 ...........
-------------------------
Subtotal................................ 721,305 261,929
=========================
Louisiana:
Louisiana State University Medical Center. 112,140 ...........
Louisiana State University A&M College.... ........... 328,772
Louisiana Technology University........... ........... 44,982
Timothy B. Mihue.......................... 82,000 ...........
-------------------------
Subtotal................................ 194,140 373,754
=========================
Maine: University of Maine.................... 179,662 146,270
=========================
Maryland:
Americal Center for Cell Biology.......... 17,000 ...........
Genetics Society of America............... 4,000 ...........
University of Maryland.................... 195,765 179,515
University of Maryland, Baltimore......... 109,091 ...........
USDA, ARS Beltsville Area................. ........... 87,366
Amrit Bart................................ 82,000 ...........
-------------------------
Subtotal................................ 407,856 266,881
=========================
Massachusetts:
Massachusetts General Hospital............ 55,000 ...........
Tutts University.......................... 663,206 186,523
University of Massachusetts............... 397,359 461,815
Boston University......................... ........... 53,390
Stonehill College......................... ........... 49,830
Worcester Polytechnical Institute......... ........... 34,950
International Association for
Paratuberculosis, Inc.................... ........... 5,000
-------------------------
Subtotal................................ 1,115,565 791,508
=========================
Michigan:
Michigan State University................. 1,355,363 839,971
Michigan Technological University......... 118,706 ...........
University of Michigan.................... 325,621 ...........
M. Fisk................................... ........... 82,000
=========================
Subtotal................................ 1,799,690 921,971
=========================
Minnesota:
University of Minnesota................... 1,035,805 901,104
Mayo Foundation........................... ........... 223,722
Donna M. Becker........................... 82,000 ...........
Mary L. Johnson........................... 82,000 ...........
-------------------------
Subtotal................................ 1,199,805 1,124,826
=========================
Mississippi:
Mississippi State University.............. 217,384 375,087
University of Southern Mississippi........ 154,097 ...........
-------------------------
Subtotal................................ 371,481 375,087
=========================
Missouri:
University of Missouri.................... 1,594,959 799,612
Washington University..................... 418,904 ...........
Donald L. Auger........................... 82,000 ...........
-------------------------
Subtotal................................ 2,095,863 799,612
=========================
Montana:
Montana State University.................. 206,394 1,015,443
University of Montana..................... ........... 113,972
Jacobs.................................... ........... 20,000
-------------------------
Subtotal................................ 206,394 1,149,415
=========================
Nebraska: University of Nebraska.............. 476,882 727,485
=========================
Nevada: University of Nevada.................. 116,283 ...........
=========================
New Hampshire:
Dartmouth College......................... 164,826 189,293
University of New Hampshire............... ........... 161,544
-------------------------
Subtotal................................ 164,826 350,837
=========================
New Mexico: New Mexico State University....... 106,379 ...........
=========================
New Jersey:
Princeton University...................... 94,925 ...........
Rutgers University........................ 154,903 467,866
University of Medicine and Dentistry of
New Jersey............................... ........... 116,283
-------------------------
Subtotal................................ 249,828 584,149
=========================
New York:
Boyce Thompson Institute.................. 116,283 405,161
Canisius College.......................... 116,576 ...........
Cold Spring Harbor Laboratory............. 97,147 ...........
Columbia University....................... 116,815 ...........
Cornell University........................ 1,676,390 1,937,458
N.Y. Botanical Garden/lnst. of EcoSystem
Studies.................................. 512,858 ...........
Rensselaer Polytechnic.................... 92,267 ...........
State University of New York, Albany...... 486,218 ...........
State University of New York, Buffalo..... 121,697 ...........
University of Rochester................... 126,607 ...........
State University of Binghampton........... ........... 87,366
State University of New York, Stoney Brook ........... 92,220
SUNY, Environmental Science and Forestry.. ........... 47,408
Syracuse University....................... ........... 168,026
Hemendinger............................... ........... 82,000
Heather G. Allore......................... 82,000 ...........
Alice C. Churchill........................ 82,000 ...........
Kenneth J. Schlather...................... 82,000 ...........
-------------------------
Subtotal................................ 3,708,858 2,819,639
=========================
North Carolina:
Bownan Grey Schol of Medicine/Wake Forest
Univ..................................... 96,429 ...........
Duke University........................... 276,179 ...........
East Carolina University.................. 5,080 ...........
Forest Service, Southeaster Forest
Experiment Station....................... 84,651 89,516
North Carolina State University........... 1,279,943 838,411
University of North Carolina, Chapel Hill. 523,443 228,420
Western Carolina University............... 13,765 92,220
Kristi M. Westover........................ 82,000 ...........
-------------------------
Subtotal................................ 2,361,490 1,248,567
=========================
North Dakota:
North Dakota State University............. 319,634 369,765
University of North Dakota................ 107,264 91,597
-------------------------
Subtotal................................ 426,898 461,362
=========================
Ohio:
Miami University.......................... 242,144 ...........
Ohio state University research Foundation. 859,899 460,457
University of Toledo...................... 145,051 ...........
-------------------------
Subtotal................................ 1,247,094 460,457
=========================
Oklahoma:
Oklahoma State University................. 597,852 145,731
University of Oklahoma, Health Sciences
Center................................... 187,867 224,280
University of Tulsa....................... 59,079 ...........
-------------------------
Subtotal................................ 844,798 370,011
=========================
Oregon:
Oregon State University................... 1,073,756 1,052,002
University of Oregon...................... 320,584 87,366
Forest Service, NW Range and Experiment
Station.................................. ........... 201,560
R. Tuma................................... ........... 82,000
Robert G. Fjellstrom...................... 82,000 ...........
-------------------------
Subtotal................................ 1,476,340 1,422,928
=========================
Pennsylvania:
Drexal University......................... 101,844 ...........
Pennsylvania State University............. 801,015 1,220,867
Rodale Institute.......................... 219,253 ...........
University of Pennsylvania................ 141,394 184,592
Carnegie Mellon University................ ........... 97,306
Clarion University of Pennsylvania........ ........... 49,912
Duquesne University....................... ........... 96,902
USDA, ARS North Atlantic Area............. 242,408 ...........
-------------------------
Subtotal................................ 1,505,914 1,649,579
=========================
Rhode Island:
Brown University.......................... 61,090 ...........
Gordon Research Conference................ 40,900 7,000
University of Rhode Island................ 284,085 337,513
-------------------------
Subtotal................................ 386,075 344,513
=========================
South Carolina:
Clemson University........................ 261,063 307,331
Medical University of South Carolina...... 47,917 116,698
-------------------------
Subtotal................................ 308,980 424,029
-------------------------
South Dakota:
South Dakota State University............. 116,767 510,390
University of South Dakota................ ........... 87,366
-------------------------
Subtotal................................ 116,767 597,756
=========================
Tennessee:
East Tennessee State University........... 222,793 ...........
University of Tennessee................... 406,306 92,145
Tennessee Technological University........ 24,400 ...........
University of Memphis..................... 252,047 ...........
University of Tennessee at Memphis........ 82,792 ...........
-------------------------
Subtotal................................ 988,338 92,145
=========================
Texas:
Baylor College of Medicine................ 243,121 694,642
Southwest Texas State University.......... 178,164 ...........
Texas A&M Research Foundation............. 1,055,097 1,112,635
Texas Tech University..................... 381,401 194,859
University of Texas, Austin............... 286,127 189,293
University of North Texas................. ........... 97,073
Prairie View A&M University............... ........... 151,848
Southern Methodist University............. ........... 135,663
USDA, ARS Southern Plains Area............ 142,142 ...........
C. Dean................................... ........... 74,706
Stephen R. Craig.......................... 82,000 ...........
-------------------------
Subtotal................................ 2,368,052 2,650,719
=========================
Utah: Utah State University................... 121,051 409,847
=========================
Vermont: University of Vermont................ 49,975 125,576
=========================
Virginia:
James Madison University.................. 180,699 92,290
Virginia Polytechnic Institute and State
University............................... 331,554 871,902
U.S. Animal Health Association............ ........... 5,000
J. Christiansen........................... ........... 82,000
-------------------------
Subtotal................................ 512,253 1,051,192
=========================
Washington:
University of Washington.................. 459,767 389,945
Washington State University............... 475,972 1,657,912
Children's Orthopedic Hospital and Medical
Center................................... ........... 93,507
D. Reed................................... ........... 82,000
D. Berrigan............................... ........... 82,000
-------------------------
Subtotal................................ 935,739 2,305,364
=========================
Wisconsin:
Medical College of Wisconsin.............. 126,260 ...........
University of Wisconsin, Madison.......... 1,872,564 1,500,011
Forest Service, Forest Products Laboratory 245,333 76,867
Marquette University...................... ........... 92,290
University of Wisconsin................... ........... 49,610
Kenneth P. Blemings....................... 78,073 ...........
Paul E. Mozdziak.......................... 79,761 ...........
Laura B. Regassa.......................... 82,000 ...........
-------------------------
Subtotal................................ 2,483,991 1,718,778
=========================
West Virginia: Marshall University............ 121,682 116,858
=========================
Wyoming: University of Wyoming................ 302,520 283,454
=========================
Total................................... 45,971,071 41,630,469
=========================
Total grants awarded from fiscal year 1996
Appropriation................................ ........... 87,601,540
Federal Administration (4 percent)............ ........... 3,769,400
Small Business Innovative Research Act........ ........... 1,809,312
Biotechnology Risk Assessment................. ........... 266,877
Peer Panel Costs.............................. ........... 587,871
Reimbursements................................ ........... 200,000
-------------------------
Total................................... ........... 94,235,000
------------------------------------------------------------------------
usda-epscor program
Question. Ten percent of the competitive research grant funds are
to be used for the USDA-EPSCOR program (Experimental Program to
Stimulate Competitive Research). Please provide a list of eligible
States and funding levels awarded under this program for each of the
past two fiscal years and a list of the States that will be eligible
for the program in fiscal year 1997.
Answer. Below is a table of funding for the USDA EPSCOR program:
NRI COMPETITIVE GRANTS PROGRAM FUNDING FOR USDA EPSCOR STATES
[Total funding for fiscal years 1995, 1996]
------------------------------------------------------------------------
Fiscal year--
USDA EPSCOR States -------------------------------
1995 1996
------------------------------------------------------------------------
Alaska.................................. $147,000 ..............
Arkansas................................ 1,112,080 $1,279,862
Connecticut............................. 816,789 516,206
Delaware................................ 1,187,004 682,628
Hawaii.................................. 665,000 87,212
Idaho................................... 1,057,836 1,037,530
Maine................................... 567,194 325,932
Mississippi............................. 811,183 746,568
Montana................................. 1,869,826 1,355,810
Nevada.................................. 906,923 116,283
New Hampshire........................... 281,061 515,663
New Mexico.............................. 0 106,379
North Dakota............................ 1,350,733 970,260
Rhode Island............................ 253,500 882,688
South Carolina.......................... 825,641 733,009
South Dakota............................ 468,083 714,523
Vermont................................. 219,000 175,551
West Virginia........................... 445,000 238,540
Wyoming................................. 154,998 585,974
-------------------------------
Total for States.................. 13,138,851 11,070,618
U.S. Territories & Possessions.......... .............. ..............
District of Columbia.................... 434,978 48,691
Puerto Rico............................. .............. ..............
-------------------------------
Grand total....................... 13,573,829 11,119,309
------------------------------------------------------------------------
1997 usda-epscor states
For fiscal year 1997, the following states are eligible for the
EPSCOR Program. In addition, all U.S. territories and possessions and
the District of Columbia are eligible.
Alaska
Arkansas
Connecticut
Delaware
Hawaii
Idaho
Maine
Mississippi
Montana
Nevada
New Hampshire
New Mexico
North Dakota
Rhode Island
South Carolina
South Dakota
Utah
Vermont
West Virginia
Wyoming
national research initiative
Question. Please summarize the major accomplishments of research
funded through the NRI in each of the past five fiscal years.
Answer. The goal of the NRI is to support fundamental and mission-
linked research of importance to agriculture. Over the past 5 years,
the NRI has supported almost $500 million in agricultural research.
This research is designed to contribute to the knowledge base from
which practical solutions can be made to the most pressing agricultural
problems. Because the NRI has six major divisions and 27 program areas,
it is difficult to describe all of the many scientific accomplishments.
However, below are some general and specific accomplishments of the
program:
General advancements:
Knowledge has been gained in the area of natural resources and the
environment addressing contemporary issues of importance for
agriculture and forestry and society as a whole. Biological systems,
including humans, influence and are influenced by the environment.
Further, the impact of environmental changes on the sustainability of
agriculture and forestry, and the enhanced stewardship of natural
resources and the minimization of negative environmental consequences,
have been the subject of many grants. A strong scientific basis also is
being sought for understanding the impact of potential global change.
The maintenance of human health is significantly affected by both
the quality and quantity of the foods consumed by individuals. Research
is supported which contributes to our understanding of the requirements
of dietary components and factors which impact optimal human nutrition.
Data generated from these studies and those conducted to better
understand consumer attitudes and behavior toward food will be used for
updating dietary recommendations, formulating national nutrition
policy, and stimulating new developments by the food industry. Safety
of food products is of paramount importance to the producer, processor,
distributor, and consumer. In response to this need, food safety
research has been supported emphasizing the detection, prevention and
control of food-borne disease-causing microorganisms, naturally
occurring toxicants and drug residues. Research on food safety is a
Department-wide initiative which adds scientific validity to the HACCP
Model.
Research across the broad scope of animal agriculture has been
funded for achieving competitive and sustainable food and fiber
production from animals. The critical need for a better understanding
of the biology of animal production and performance necessitates a
broad scientific approach that contributes to integrated food animal
management systems. To accomplish this, both fundamental and mission-
linked research have been supported that have the following goals: (a)
enhancing reproductive efficiency; (b) improving animal growth and
development; (c) identifying animal genetic mechanisms and mapping
genes; and (d) sustaining animal health and well-being. Emphasis has
been given to innovative approaches to research questions related to
animals primarily raised for food or fiber. This includes aquaculture
species and those animals such as horses that contribute significantly
to the agricultural enterprise of the country.
Pests cause major damage each year to crops, forests, rangeland,
and livestock. How well pests are controlled becomes a major limiting
factor in the ability of the United States to produce, store, ship and
trade food and other products of agriculture. Although vital to the
sustainability of agriculture, pest control also can have negative
effects. Environmental damage can occur in the form of chemical
contamination due to pesticide use. Conversely, lack of pest control
may create other environmental and human health problems. Fundamental
knowledge has been gained to form the basis of novel pest management
strategies for new or emerging pests or for replacement of obsolete
pest management practices. Moreover, pest management of the future has
been improved while simultaneously reducing our dependency on
pesticides as one of many steps toward the goal of sustaining
agriculture and our natural resources. Research conducted by NRI
supports the Department's initiative to implement IPM practices on 75
percent of U.S. crop acreage by 2000.
Additional knowledge has been generated across a broad range of
plant sciences critical to sustainable crop and forest productivity,
and for addressing the environmental impacts of farming and forestry.
For example, the ability to breed crop and forest species with specific
desirable traits has been enhanced by knowledge of the location,
behavior, and characteristics of plant genes. Plant development affects
plant productivity and the quality of plant products. Knowledge of how
plants obtain, use, or store energy and nutrients has been obtained and
is essential for proper management of plant populations. Innovative
research on plant systems has been supported in: (a) genomes, genetics,
and diversity; (b) plant growth and development; and (c) energy and
metabolism.
The economy and standard of living in the United States are
increasingly dependent upon export market growth and the retention of
domestic markets. This is especially true for the nation's rural areas
long dependent upon the production and marketing of agricultural,
aquacultural, and forest products. The research supported by NRI grants
has generated a continuing stream of new knowledge on how to compete in
the production and marketing of raw commodities and value-added
products, stimulated economic development in rural areas, and developed
production and processing practices to enhance the natural environment
and standard of rural living.
Research to enhance the value and use of agricultural and forest
products helps to maintain and strengthen U.S. agricultural and forest
based industries. Expanded uses for agricultural and forest
commodities, more efficient use of resources, more environmentally
sound manufacturing processes, and greater economic competitiveness of
U.S. produced goods are all resulting from NRI funded research.
Opportunities exist for making new and better agricultural and forest
products at all stages of product development and use, starting with
understanding and improving the agricultural/forest resource base,
production, harvest, storage, transportation, product formulation,
processing and manufacturing, and understanding and optimizing end-use
characteristics. Innovative research has been supported in: (a) value-
added products research encompassing food and non-food
characterization/process/product research and (b) improved utilization
of wood and wood fiber.
Agriculture encompasses the system that produces, processes, and
distributes food, fiber, and other products and services from the
producer to the consumer. Agricultural systems also include
aquaculture, forestry and a diversity of supporting natural resource
elements such as soils, surface water, ground water, wildlife, and the
atmosphere. In addition, human resources, institutions, and financial
capital are needed to support and manage agricultural systems. It is
the management of all these diverse and complex resources within a
systems context that is critical to how well the agricultural system
fulfills societal goals. Although agricultural research has most often
focused on individual components of systems, the NRI has provided
opportunities for integration of these components through a systems
research program. The objective has been to obtain knowledge that is
essential to sustain the viability of agriculture. Such research
addresses directly interactions among the components that comprise
agricultural systems. The NRI supports systems research that has the
potential to aid in the development and/or evaluation of national,
regional, community, and/or producer level practices and policies that
will sustain: a safe and adequate supply of agricultural products and
services; environmental quality and the natural resource base; human
health; and the economic viability and quality of life of rural
communities; and address linkages between urban and rural areas.
Specific Accomplishments:
Erwinia herbicola is a bacterial plant pathogen responsible for
fruit russeting of pear trees. Researchers at the University of
California at Berkeley studied the expression of a gene in this
pathogen that is activated in dry environments, a condition quite
common for bacteria growing on plants in the field. They found that
this gene is inhibited in the presence of free ammonium ions when the
bacteria are grown in culture. They tested these results in the field
and found that the application of nitrogenous compounds, such as
ammonium sulfate, at low rates near bloom is a simple and safe
alternative to the use of chemical pesticides for the control of fruit
russet.
Researchers at South Dakota State University have identified
extracts of the noxious weed, leafy spurge that induce a strong
aversive feeding response in laboratory rats. The extracted portion of
leafy spurge is being characterized for chemicals that induce this
aversive feeding reaction. Once such a chemical(s) is(are) identified,
researchers may be able to alter leafy spurge such that cattle will
graze on this noxious weed.
Porcine Reproductive and Respiratory Syndrome--PRRS--is caused by a
virus that causes a disease identified by the National Pork Producers
Council as the number one disease problem of swine. Based on an
understanding of the biology of the virus--research funded by the NRI
and the National Pork Producers Council--a vaccine was developed that
prevents the disease. Investigators at South Dakota State University
and the University of Minnesota have made a major contribution to the
swine industry through this research.
In the summer of 1996, about 400,000 acres of Bt corn was grown in
the U.S. Bt corn has a bacterial gene incorporated into the corn genome
that produces a toxin extremely effective against the European Corn
Borer. Estimates are that 3.4 million acres will be grown in 1997.
Although this product is viewed as developed by industry, public
research laid the groundwork for its development. The NRI has funded
considerable work on Bacillus thurengiensis (1) for determining the way
Bt toxin destroys its insect host so that the most effective Bt genes
can be incorporated into the engineered plant, and (2) for
understanding the biochemical and ecological basis of insect resistance
to Bt so that resistance problems can be avoided or delayed with the
engineered crop. Other NRI funding has allowed the molecular genetic
mapping of corn leading to efficient means for crossing the transgene
into various elite lines, documentation of the genetic behavior of
tissue cultures facilitating the regeneration of corn plants with the
Bt gene, etc.
The safe handling of food has been enhanced through NRI funded
projects. One of the outcomes is the isolation of a protein--invisible
when applied to food preparation surfaces such as cutting boards--that
binds firmly to the surface but does not allow harmful bacteria to
bind. If they do bind, the protein kills the cells. This product is
called Nisin, developed by researchers at Oregon State University. The
medical field is considering Nisin's value in treating mechanical
devises used in medicine.
The take-all disease can wipe out whole fields on wheat in the U.S.
as well as abroad. A few soils, called ``suppressive soils'', do not
allow much growth of the fungus. USDA Agricultural Research Service
scientists at Washington State University with NRI funding have found
that certain strains of Pseudomonas bacteria found in suppressive soils
prevent the growth of the take-all fungus. These scientists found that
certain soil bacteria produce antibiotics--phenazines--that stop the
growth of the fungus. The antibiotic has been isolated and
characterized. These bacteria can be grown in a fermentor and applied
as a seed coating like any other seed treatment, except this represents
a biological control agent instead of chemical control. Another
difference is that only the seed to be immediately planted is treated
because otherwise the bacteria will die; an advantage is that only seed
to be planted is treated. Currently, seed treated with chemicals and
not planted must be disposed of and that can be a problem.
The Spider Lamb Syndrome--SLS--is a congenital skeletal defect
controlled by a single recessive gene. Lambs that carry the gene in
heterozygous condition--carriers--are perfectly normal--but matings
between two carriers produce defective lambs in about 25 percent of the
progeny. Knowing that breeding stock carries this gene reduces their
value by about 70 percent. The gene is becoming more and more prevalent
in the Sulfolk and Hampshire breeds. In 1994, the NRI published a
``Research Highlights'' publication page indicating that research had
been funded to discover a marker gene that might allow farmers to know
when a ewe or ram carried the gene. In the ensuing years, a marker was
found that would allow the identification of such carriers with 92
percent accuracy. Using the chromosome map position of this marker gene
in sheep as a guide, a Utah State University researchers looked for the
marker on the human molecular genetic map. At about the same distance
from this marker gene as found between it and the SLS trait in sheep,
the researchers noticed that a human trait had been mapped that also
influenced skeletal development. Using the human gene as a probe onto
the DNA from progeny segregating for the SLS, the researchers found
that this gene was 100 percent associated with the trait. By this
series of discoveries, we now have available not only a perfect
molecular genetic tag to know when a lamb is a carrier, but the exact
gene causing the biochemical defect is now known.
Several wild species of tomatoes produce seemingly worthless
small--\1/2\-inch diameter--green fruit. It is not surprising to find
that these wild tomato species furnish genes for cold tolerance, virus
resistance, insect resistance, and increased solids. What is surprising
is that a Cornell University researcher, through NRI funding, found
that these green tomatoes possess genes that will make our normal red
tomato even redder. The researcher has found that the use of the
molecular genetic map of tomato, also developed in part through NRI
funding, allowed him to detect genes in the green wild tomato that have
an effect directly opposite to what one would expect. The researcher
also has found that these tiny fruited tomatoes have genes that will
increase yield in our normally cultivated types.
Researchers at Purdue University have developed a system to use
corn grits--ground corn kernels--to take the water out of ethanol
produced from corn, a system now used to process 750 million gallons of
ethanol per year at a significant cost savings over other methods.
Through NRI support, the technology is being extended to new
applications. For example, modified grits are being examined as a
replacement for expensive inorganic desiccants in pressure swing dryers
to provide dry air or other gases for use in paint spraying, ozone
generation, and pressurization of power and communication cables. In
addition, corn grits are being examined as a low-cost, natural
desiccant for air conditioners based evaporative cooling; in this
application, the grits can help displace ozone-depleting
chloroflourocarbons and tap into a $26 billion global market.
Technology also can result from the USDA competitive grants program
that has an impact on all of biology. A system has been developed for
isolating and biologically purifying fragments of DNA that led to the
``shotgun cloning'' of DNA, declared as a revolution in DNA sequencing
technology by many writers. The contribution of this research was in
using the M13 bacteriophage to amplify specific DNA segments. The
genome programs of today owe part of their success to this innovative
strategy funded by USDA.
special and administrative grants
Question. For each of the special research and administrative
(research and extension) grants funded for fiscal year 1997, please
indicate the following: a detailed description of the project funded;
who is carrying out the research; federal and non-federal funding made
available for the project to date, by fiscal year; and the anticipated
completion date for the original objectives of the project and whether
those objectives have been met; and the anticipated completion date of
additional or related objectives. For each project, please indicate
when the last agency evaluation of the project was conducted. Provide a
summary of the last evaluation conducted.
Answer. The information follows.
aflatoxin research, illinois
Past work on this problem has involved identifying corn germplasm
resistant to aflatoxin, identifying Asperigillus flavus-inhibiting
compounds, identifying fungus-inhibiting enzymes, developing
transformation methods, and developing tissue culture/plant
regeneration procedures. Aflatoxin are potent carcinogens with other
toxic properties, and pose potential health risks wherever toxin-
contaminated corn occurs. Aflatoxin contamination occurs frequently in
the southeastern United States, but outbreaks have also occurred in the
upper Midwest. Because there, are significant needs for research and
program implementation national interest areas such as the integrated
pest management initiative, funds are not proposed to continue this
Special Research Grant. At the discretion of the state, Hatch Act or
other funding could be used to support this research.
The original goal of this research was the reduction of aflatoxin
production in corn. Recent accomplishments include identification of
corn germplasm producing high levels of fungus-inhibiting enzymes,
production of transformed corn plants, finding new sources of
resistance, and developing advanced corn lines for hybrid production.
Grants have been awarded from funds appropriated as follows: fiscal
year 1990, $87,000; fiscal year 1991, $131,000; and fiscal years 1992-
1993, $134,000 per year, fiscal year 1994, $126,000; and fiscal years
1995, 1996, and 1997, $113,000 per year. A total of $951,000 has been
appropriated.
The non-federal funds and sources provided for this grant are:
$21,251 university operating funds for project investigator salary and
fringe benefits, and $18,000 in corn seed company support.
This research is being conducted at the University of Illinois. The
anticipated completion date for the original objectives was 1995. The
original objectives have not been completely met. In other related
work, the project leaders, working with collaborating corn breeders,
anticipate providing the different sources of resistance to commercial
seed companies for incorporation into high-yielding commercial hybrids
within five to seven years. Keeping with the Administration's policy of
awarding research grants competitively, no further Federal funding for
this grant is requested.
The last agency evaluation was in December 1996. In summary, the
evaluation stated that the research techniques are consistent with high
likelihood that specific objectives will be accomplished. There is a
good balance between fundamental and applied research, which should
foster the development of new, highly-desirable corn germplasm.
agricultural diversification and specialty crops, hawaii
The white taro project is in its final phase. Many of the
processing obstacles have been overcome, flour is being produced in
pilot-scale quantities, better taro food product formulations are
coming out, and the project is ready to turn over to the private
sector.
Due to demand conditions, the pineapple wet-pack processing project
was changed to a high pressure minimal processing of tropical fruits.
High pressure processing of tropical fruits provides a ready-to-eat
chilled fresh product by adding value to fruit which can not meet fresh
fruit quality standards and eliminating the fruit fly quarantine
problem. Once the high pressure equipment arrives in February 1997,
qualitative results should be out quickly. An agricultural business
development handbook called, ``This Hawaii Product Went to Market'' was
published. It contains 43 short chapters written by 46 people
representing 26 companies and institutions in Hawaii. This book was
necessary to help others with business initiation and expansion. A new
taro production manual is nearing completion. Agribusiness interested
in taro now have what all good agribusinesses need: a cost of
production study, market reconnaissance information delivered by the
project's newsletter, marketing tools developed in earlier phases of
this project, and a production manual. Underlying all of this
information is a business guide.
Hawaii's economy needs help to recover after the decline of sugar
and pineapple in the state. Taro products would be one such avenue,
albeit relatively small at the outset. These gluten-free products could
be a staple to many people in the U.S. who suffer from food ingredient
intolerance. In general, collaboration with the private sector is
needed to evaluate the commercial potential of university-based work.
In view of significant needs for research in high priority national
interest topics such as improved pest management systems, funds are not
proposed to continue this grant. At the discretion of the state, Hatch
Act or other funding could be used to support this research. The
principal investigator believes this research to be of regional and
local need.
The goal of the original proposal was to screen potential food and
non-food crops for commercial development in Hawaii. As mentioned
above, white taro emerged as one of the most promising opportunities
and also offered the opportunity to develop an infrastructure that will
help new crop ideas come on line even faster. Overall, the researchers
have identified a need, people with food sensitivities; then identified
a crop; figured out a mechanism to inexpensively process the crop into
flour; worked with a private sector company to set-up a pilot-scale
facility; developed the operating protocol for the facility; worked
with local food processors to develop prototype products and have
improved on them; and found some interested parties that might be
willing to invest in the commercial version of this project. Currently,
the University of Hawaii is working on handing-off the project to the
private sector. The high pressure project is just getting off the
ground because it took a long time to acquire the equipment.
Grants have been awarded from funds appropriated as follows: fiscal
years 1988 and 1989, $156,000 per year; fiscal years 1990 through 1993,
$154,000 per year; fiscal year 1994, $145,000; fiscal years 1995
through 1997, $131,000 per year. A total of $1,634,000 has been
appropriated.
The University of Hawaii provides in-kind support in the form of
laboratory and office facilities, equipment and equipment maintenance
and administrative support services: $68,503 in fiscal year 1992;
$75,165 in fiscal year 1993; and $74,663 in each fiscal year 1994-1997.
In addition, nearly $35,000 of in-kind support has come from private
sector partners and $30,000 is committed from the private sector on the
high pressure minimal processing project.
Research is being conducted at the University of Hawaii's College
of Tropical Agriculture and Human Resources, and on the Big Island of
Hawaii. All taro-related work will be done by May 31, 1997 and all
objectives will be met. The high pressure processing project will have
a great deal of work done by May 31, 1998 but will need to be continued
on private sector funds. In keeping with the Administration's policy of
awarding research grants competitively, no further federal funding for
this grant is requested. Research could be continued at the state's
discretion using, formula funds.
The CSREES agency representative to this project meets with the
University of Hawaii investigators at least twice each year to review
progress and plan subsequent activities. This close interaction has led
the project through a progression of steps from research discovery to
near-term commercialization, and, in the case of high pressure
processing, back to testing and development of a new technology for
possible commercial use.
alliance for food protection, ne, ga
The fiscal year 1997 appropriation supports the continuation of a
collaborative alliance between the University of Georgia Center for
Food Safety and Quality Enhancement and the University of Nebraska
Department of Food Science and Technology. Fiscal year 1996 funds
supported research at the University of Nebraska on the detection,
identification and characterization of food allergens, the effects of
processing on peanut allergens, and investigation of the efficacy of
using various types of thermal processes to reduce or destroy the
toxicity and mutagenicity of certain Fusarium metabolites in corn and
corn products. Research at the University of Georgia was directed
toward determining the foodborne significance of Helicobacter pylori,
determining the fate of Arcobacter in foods and the effect of
environmental factors on survival and growth, determining the efficacy
of nisin and environmental factors on controlling Bacillus cereus, and
developing a device to rapidly detect foodborne pathogens using
immunomagnetic separation technology. The principal researcher believes
the proposed research addresses emerging issues in food safety which
have national, regional and local significance. Specifically, research
will address bacterial pathogens that can cause ulcers, cancer and
diarrheal illness and allergens in foods that cause serious reactions,
including death, in sensitive people. These emerging issues affect
consumers, the food industry, and food producers at all levels,
national, state, and local. In view of significant needs for research
in high priority national interest topics such as improved pest
management systems and food safety, funds are not proposed to continue
this Special Research Grant. At the discretion of the State, Hatch Act
or other funding could be used to support this research.
The original goal of this research was to: (1) facilitate the
development and modification of food processing and preservation
technologies to enhance the microbiological and chemical safety of
products as they reach the consumer and (2) develop new rapid and
sensitive techniques for detecting pathogens and their toxins as well
as toxic chemicals and allergens in foods. The University of Nebraska
developed assays for the detection of milk and egg residues in
processed foods, produced high-quality antibodies for soybean proteins,
partially characterized sunflower seed. and soybean allergens, and
developed a simple liquid chromatographic procedure for determination
of moniliformis toxin. The University of Georgia developed a method to
culture Helicobacter pylori, identified a treatment to prevent Bacillus
cereus from producing toxin in refrigerated foods, determined survival
and growth characteristics of Arcobacter and Helicobacter pylori, and
determined the appropriate homogenization conditions to prepare food
samples for rapid detection of pathogens by immunoseparation.
The work supported by this grant began in fiscal year 1996, and
$300,000 was appropriated in fiscal years 1996 and 1997, for a total
appropriation of $600,000. The nonfederal funds and sources provided
for this grant were $117,000 state funds and $250,000 industry and
miscellaneous in fiscal year 1996 and are expected to be $141,000 state
funds and $175,000 industry and miscellaneous in fiscal year 1997.
Research will be conducted at the University of Georgia Center for
Food Safety and Quality Enhancement in Griffin, Georgia and at the
University of Nebraska Department of Food Science and Technology in
Lincoln, Nebraska. The original objectives have not yet been met. The
researchers anticipate that work will be completed on the original
objectives in 1999. However, in keeping with the Administration's
policy of awarding research grants competitively, no further Federal
funding for this grant is requested. Research could be continued at the
State's discretion using Hatch or other funds.
An agency science specialist conducts a merit review of the
proposals submitted in support of the appropriation on an annual basis.
A review of the proposal from the University of Nebraska was conducted
on December 20, 1996, and good progress was demonstrated on the
objectives undertaken to date as discussed above. A progress report
from the University of Georgia was evaluated by the agency on January
16, 1997, and demonstrated good progress on its 1996 objectives.
alternative crops for arid lands, texas
This grant is to develop the two most abundant plants in
southwestern United States, i.e. mesquite and cactus, into commercial
crops through a combination of applied research and marl,,et
development. In Texas, New Mexico, Arizona and California these plants
occupy 72 million acres. The semi-arid regions of the United States
that border with Mexico in Texas, New Mexico, Arizona, and California
have some of the highest unemployment rates, lowest economic returns
per acre, and lowest incomes in the United States. The two most
abundant plant species in this region are prickly pear cactus and
mesquite. By working with Mexican researchers, this grant will help to
stabilize the economic situation of rural poor in Mexico and the United
States. There are few crops capable of being grown sustainably in these
regions. Due to the nitrogen fixing capability, and thus soil improving
properties, of mesquite and high water use efficiency of cactus, these
plants contribute to sustainable agriculture, and will diversify
southwestern agriculture. This research group is the only center in the
United States developing these plants as crops. The principal
researcher has been active with a national New Crops initiative
supported by the Center for Agricultural Science and Technology (CAST)
to develop grants programs for new feed/food from new crops. In view of
the significant need for research in national priority areas, such as
integrated pest management, additional funding for this Special Grant
is not proposed. At the discretion of the State, Hatch Act or other
funding could be used to support this effort.
The goal is to improve the economic returns, and year-to-year
economic stability in the southwestern United States. Accomplishments
have been sale of a new cactus vegetable variety in 100 stores of the
largest retail grocery chain in Texas, presentations to architects in
all major cities in Texas on mesquite technical qualities and all
mesquite sawmill and furniture manufacturers, publication of 4 year
field trials in which cactus was found to be the most efficient
converter of water to dry matter of all plant types, a major collection
of 130 fruit, forage and, vegetable varieties of cactus, 10 year non-
irrigated pruning and spacing trial with mesquite found diameter growth
rates greater than walnut and oak in the northeastern United States,
and a sustainable system for mesquite management that avoids use of
bulldozers and aerial herbicides by creating markets for mesquite
products and utilizing mesquite's nitrogen fixing properties.
Fiscal year 1994 was the first year of funding for this grant and
$94,000 was appropriated. In fiscal years 1995 through 1997, $85,000
was appropriated each year. A total of $349,000 has been appropriated.
In fiscal year 1994, $43,215, was provided by the Texas legislature.
The work is being conducted by Texas A&M University, Kingsville,
Texas. Significant but small Texas cactus and mesquite industries now
exist. Transformation of these small industries into medium industries
and transfer of the and technologies to low rainfall areas of the
Midwestern and southeastern United States will carry on 10 years into
the next century. Keeping with the Administration's policy of awarding
research grants competitively, no further Federal funding for this
grant is requested.
Evaluation of this project is conducted annually based on the
annual progress report and discussions with the principal investigator,
as appropriate. The review is conducted by the cognizant staff
scientist who has determined that this research is in accordance with
the mission of the agency.
alternative crops, north dakota
In this investigation of alternative crops, there are two main
thrusts: the development and commercialization of novel new crops, and
the differentiation of traditional crops. Both avenues of research have
the shared goals of increasing biodiversity at the farm and field,
while producing new crops and products for current and future societal
needs. Some of these include (a) the development of crambe, flax,
sunflower, safflower, and various rapeseeds as a renewable supply of
industrial oil, (b) the study of products from amaranth, potatoes,
sugarbeets, carrots, soybeans, barley, and sunflower for novel new uses
in the paints, coatings, as food ingredients, and critical human
nutrition markets, and (c) the development of new bio-chemical and
enzymatic processes to refine and create super critical and other high-
value fluids from oilseed crops which could serve as effective
renewable replacements for industrial uses.
The principal researcher believes that nationally, developing new
crops and new markets for agricultural products is critical for both
environmental and economic reasons. Enhanced biodiversity that comes
from the successful commercialization of new crops aids farmers in
dealing with pests, reducing the dependency upon pesticides. New
markets are needed to provide more economic stability for agricultural
products, especially as federal price supports are gradually withdrawn.
The development of new crops and products, offers a unique way to
satisfy national goals of enhanced environmental quality, while at the
same time opening new economic opportunities to farmers and other rural
entrepreneurs. Regionally, the temperate areas of the Midwest have the
potential to grow a great number of different crops, but are in need of
publicly sponsored research efforts to reveal the most practical,
efficient, and economical crops and products to pursue. This effort has
forged a strong link with the private sector, and successfully spawned
several crops and products into profitable private sector businesses.
In view of significant needs for research in high priority national
interest topics such as improved pest management systems, funds are not
proposed to continue this Special Research Grant. At the discretion of
the state, Hatch Act or other funding could be used to support this
research. The principal researcher believes this research to be of
national, regional or local need.
The original goal of this research was to introduce, evaluate and
test new crops which will broaden the economic diversity of crops grown
in North Dakota. Over the past eight years, this special federal
appropriation has been an important part of North Dakota State
University's approach to research and development on agricultural
alternatives. It has helped sponsor research on crambe, lupin, canola,
safflower, cool-season grain legumes, buckwheat, amaranth, field pea
production and utilization, transgenic sugar beets to produce levan,
utilization and processing of lupin flour, confectionery sunflower
production, and growing and marketing of carrots in North Dakota. It
has helped develop a crop-derived red food dye and high quality pectin
as food ingredients. It has sponsored research on innovative new bio-
chemical means of splitting crop oils, and other new uses of oilseed
crops. It has also helped develop markets for new crops as livestock
and fish feeds. This appropriation has helped create both new knowledge
and new wealth.
Appropriations by fiscal year are as follows: 1990, $494,000; 1991,
$497,000; 1992 and 1993, $700,000 per year; 1994, $658,000 and in
fiscal year 1995, $592,000; and in 1996 and 1997, $550,000 per year. A
total of $4,691,000 has been appropriated.
In fiscal year 1991, $10,170 was provided by state appropriations.
In fiscal year 1992, $29,158, was also provided by state appropriations
and self-generated funds. In fiscal year 1993, $30,084, was provided by
state appropriations. In fiscal year 1994, $161,628 was provided by
state funds, $3,189 provided by industry and $9,020 provided by other
sources, totalling $174,417. In fiscal year 1995, $370,618 was provided
by state appropriations, $1,496 provided by self-generated funds,
$1,581 provided by industry and $5,970 was provided in other non-
federal funds, totalling $379,665 for fiscal year 1995. In fiscal year
1996 $285,042 was provided by state appropriation, $4,742 provided by
industry, $14,247 provided from other non-federal funds, totaling
$304,031 for 1996.
The work is conducted on the campus of North Dakota State
University and at the Carrington Research and Extension Center,
Carrington, North Dakota, and the Williston Research Center, which are
both in North Dakota. Work is also done in eastern Montana.
Fiscal year 1997 is the eighth year of activity under this grant.
The primary emphasis has been to find new crops with non-food uses and
create value added products. The original objectives have been met.
Keeping with the Administration's policy of awarding research grants
competitively, no further Federal funding for this grant is requested.
This project has been evaluated based on the annual progress report
and agency participation in evaluating proposals submitted to the
Agricultural Experiment Station under this grant. The cognizant staff
scientist has reviewed the project and determined that the research is
conducted in accordance with the mission of this agency.
alternative marine and freshwater species, mississippi
The research has focused on the culture of hybrid striped bass,
prawns, and crawfish. Nutritional requirements and alternative
management strategies for these species have been evaluated and field
tested. Utilization of improved technologies will enhance production
efficiency and accelerate the use of these alternative species and
alternative management strategies in commercial aquaculture. The
principal researcher indicates that as the aquaculture industry
continues to grow, it is extremely important to consider alternative
species and production strategies for culture in order to help the
industry diversify. Diversification is of benefit to both the producer
and consumer of aquaculture products. In view of the significant needs
for research in high priority national interest topics such as improved
pest management systems, funds are not proposed to continue this
Special Research Grant. At the discretion of the state, Hatch Act or
other funding could be used to support this research.
The original goal of this research was to develop and evaluate
aquaculture production technologies that would lead to the use of
alternative species and management strategies in commercial aquaculture
production. Research evaluating stocking rates, nutritional
requirements, and methods to reduce stress in hybrid striped bass
production systems has led to the development of improved production
efficiency in these systems. Recent research indicates that feed
formulations for hybrid striped bass should be adjusted for seasonal
fluctuations in temperature. Nutritional studies also indicate that the
niacin requirement for striped bass may be much lower than previously
reported. Field testing of alternative management strategies for
crawfish indicates that the most efficient and cost effective
production strategy involves the appropriate combination of stocking,
feeding, and harvesting practices. In addition, researchers evaluating
product quality of cryogenically frozen whole prawns indicate that
prawns can be kept in frozen storage up to 7 months with no loss of
quality.
The work supported by this grant began in fiscal year 1991 and the
appropriation for fiscal years 1991-1993 has been $275,000 per year,
$258,000 in 1994, and $308,000 in fiscal years 1995-1997 each year. A
total of $2,007,000 has been appropriated.
The university reports a total of $332,091 of non-federal funding
to support research carried out under this program for fiscal years
1991-1994, $70,636 in fiscal year 1995 and $79,935 in fiscal year 1996.
The primary source of the non-federal funding was from state sources.
Research is being conducted at Mississippi State University. The
original specific research objectives were to be completed in 1994.
These specific research objectives have been met, however, the broader
research objectives of the program are still being addressed. The
specific research outlined in the current proposal will be completed in
fiscal year 1998. Keeping with the Administration's policy of awarding
research grants competitively, no further Federal funding for this
grant is requested. Research could be continued at the State's
discretion using other funds.
The agency evaluates the progress of this project on an annual
basis. The university is required to submit an accomplishment report
when the new grant proposal is submitted to CSREES for funding. The
1996 review indicated that the research addresses an important
opportunity in the aquaculture industry, that progress on previous
research was well documented, and that the proposed research builds on
the previous work funded through this program.
animal science food safety consortium
The research goal of the consortium has been to enhance the safety
of red meat and poultry products for human consumption. Research has
focused on accomplishing six objectives (1) develop rapid detection
techniques for pathogenic bacteria and toxic chemicals for use by the
red meat and poultry production-marketing system; (2) devise a
statistical framework from which to develop tolerance levels for these
hazardous substances; (3) identify effective interdiction points and
develop methods to prevent or reduce substance presence; (4) develop
monitoring techniques and methodologies to detect and estimate the
human health risk of these contaminants; (5) develop technologies to
reduce hazards and enhance quality of animal food products to
complement the development of Hazard Analysis Critical Control Point
[HACCP] programs by the Department's Food Safety and Inspection
Service; and (6) estimate benefits and costs and risks associated with
interdiction alternatives. The consortium's researchers have focused
their efforts primarily on the first, third, fifth, and sixth
objectives.
The principal researchers believe a safer national meat product
food supply could reduce large economic losses, they estimate $4 to $7
billion a year, as a result of lost productivity and wages and medical
treatment of victims of food-borne illnesses, in addition to reducing
the human suffering and loss of life that occur every year as a result
of these illnesses. Safer products could also find greater acceptance
in global markets and, therefore, could contribute to increased meat
product exports and rural economic growth. In view of significant needs
for research in high priority national interest topics such as improved
pest management systems and food safety, funds are not proposed to
continue this Special Research Grant. However, the fiscal year 1998
President's Budget requests $2 million for a competitively-awarded food
safety program. The principal researchers could submit a proposal to
this new program if it is funded. Also, at the discretion of the State,
Hatch Act or other funding could be used to support this research.
The goal is to develop detection, prevention, and monitoring
techniques that will reduce or eliminate the presence of food borne
pathogens and toxic substances from the Nation's red meat and poultry
supplies. The consortium is organized and operated along institutional
lines with a coordinator and directors managing the research program.
Advisory and technical committees consist of outside representation and
provide advice on research planning and expertise on technical matters.
Major accomplishments this past year by the University of Arkansas
include showing that young infants and children are more likely to be
infected with Salmonella by caretakers than through food consumption,
developing a technique to distinguish strains of Salmonella that are
epidemiologically related, discovering anti-microbial bacteriocin with
potentially broad application in the food system, and testing a process
for mechanically stripping meat from poultry carcasses which may reduce
microbiological contamination. Researchers have also developed a
research oven which is leading to valuable models for cooking processes
that kill pathogens while retaining quality of cooked poultry. They
have also found that certain enzyme linked immunosorbent assays for
Listeria monocytogenes may not be as useful in detecting these
pathogens in cooked food products as on uncooked products. An
experimental system for detection of Salmonella typhimurium organisms
in pure culture has been developed which is based on immunomagnetic,
immunofluorescent staining and image analysis which results in a
significant reduction in time for analysis. Intervention techniques
have been shown to aid in the reduction of bacterial populations as an
integral component in successful HACCP program implementation.
Major accomplishments this past year at Iowa State University
include development of rapid detection methods for foodborne pathogens
in live swine and on pork products, intervention approaches at
production and processing levels to enhance product safety, and
assessment of health risks from pathogens which may be borne by pork or
pork products. Specifics include the application of polymerase chain
reaction technology to detect and differentiate Campylobacter jejuni
and the more prevalent Campylobacter coli in pork, effective
application of enzyme-linked immunosorbent assays to identification of
antibodies against prevalent Salmonella species in swine sera and pork
meat extracts, and development of a reliable culture test for rapid
detection and differentiation of coliform and E coli bacteria.
Effectiveness of a new vaccine for Salmonella developed with partial
sponsorship of the Consortium has been assessed in laboratory
experimentation and field experience. Research found that bacteria are
readily inactivated by practical levels of irradiation but viruses,
especially the small RNA viruses were quite resistant to irradiation
and were not sensitized to low heat treatment which would be sublethal
to non-irradiated contaminated pork. Willingness to pay for irradiated
pork or chicken was 10-30 percent above non-irradiated products in
customer market tests. Risk assessment studies on food borne pathogens
placed public health impact from pork at high level for no pathogens,
at moderate level for Salmonella, Yersinia, Clostridium, and
Staphylococcus, and at low to negligible level for all other potential
pork borne pathogens.
Kansas State University has demonstrated under commercial
conditions that electronic identification systems to track and
determine contamination points for beef cattle are feasible from an
implant retention, operational, and retrievability standpoint;
developed analytical procedures to detect mycotoxin and organophosphate
pesticide contaminates in animal tissue; demonstrated optimum carcass
washing and trimming practices supplemental treatments of carcasses and
cuts after final handling to be effective in the removal of pathogens;
and demonstrated the efficacy of steam pasteurization and steam
vacuuming in eliminating pathogenic bacteria from beef carcasses.
University researchers have also determined that low dose irradiation
is a viable intervention technology with minimal effects on beef
quality; demonstrated that processing protocols for large diameter
Lebanon bologna are sufficient to control E coli 0157:H7; determined
that monitoring endpoint cooking temperature of ground beef patties or
following a prescribed time/temperature interaction known to achieve a
given endpoint are the safest ways to prevent consumption of
undercooked ground beef, and developed technology to enhance growth of
pathogenic bacteria so they can be rapidly detected at very low but
potentially hazardous levels.
Grants have been awarded from funds appropriated as follows: fiscal
year 1989, $1,400,000; fiscal year 1990, $1,678,000; fiscal year 1991,
$1,845,000; fiscal years 1992-1993, $1,942,000 per year; fiscal year
1994, $1,825,000; fiscal years 1995-1996, $1,743,000 each year; and
fiscal year 1997, $1,690,000. A total of $15,808,000 has been
appropriated.
The non-federal funds and sources provided for this grant are as
follows: $1,313,653 State appropriations, $2,959 product sales, $35,600
industry, and $259,735 miscellaneous for a total of $1,611,947 in 1991;
$1,270,835 State appropriations, $10,129 product sales, $90,505
industry, and $267,590 miscellaneous for a total of $1,639,059 in 1992;
$1,334,680 State appropriations, $1,365 product sales, $33,800
industry, and $356,308 miscellaneous for a total of $1,726,153 in 1993;
$1,911,389 State appropriations, $192,834 industry, and $200,000
miscellaneous for a total of $2,304,223 in 1994; $1,761,290 State
appropriations, $221,970 industry, and $91,885 miscellaneous for a
total of $2,075,145 in 1995; $2,643,666 State appropriations and
$152,431 industry, for a total of $2,796,097 in 1996; and $1,508,112
State appropriations, $638,172 industry, and $129,753 product sales,
for a total of $2,276,037 in 1997. Thus, from 1991 through 1997 a total
of $14,428,661 in non-federal funds was provided.
Research is being conducted at the University of Arkansas at
Fayetteville, the University of Arkansas for Medical Sciences at Little
Rock, Arkansas Children's Hospital, Iowa State University, and Kansas
State University.
The current program of research outlined under the Consortium's
revised strategic research plan should be completed in 1999. Keeping
with the Administration's policy of awarding research grants
competitively, no further Federal funding for this grant is requested.
However, the fiscal year 1998 President's Budget requests $2 million
for a competitively-awarded food safety program. The principal
researchers could submit a proposal to this new program, if funded.
Also, at the discretion of the State, Hatch Act or other funds could be
used to support this research. An agency science specialist evaluates
the progress of this project on an annual basis.
apple fire blight, michigan and new york
This project studies fire blight in apple trees, which is a disease
that can kill fruit spurs, branches, and whole trees. The research
supported under this project will help develop fire blight resistant
varieties, evaluate biological and chemical controls, and develops an
education and extension component. Fire blight disease is caused by
bacteria and effects apple trees in all apples growing areas of the
nation. In the northeast, the disease is more prevalent because of
humid weather conditions. The management of this disease is difficult
because only one antibiotic treatment is available. Because there are
significant needs for research in high priority national interest
topics such as improved pest management systems, funds are not proposed
to continue this Special Research Grant. At the discretion of the
state, Hatch Act or other funding could be used to support this
research. The principal researcher believes this research to be of
national, regional, and local need.
The objectives are to develop transgenic apple trees through
various molecular technologies, to develop new approaches to antibiotic
treatment of the disease, to develop an early screening technique for
tree sensitivity to the disease, to evaluate biological and cultural
controls and to develop and improve education and extension components
of disease management.
Fiscal year 1997 was the first year funds were appropriated for
this grant. A total of $325,000 was appropriated. The proposed non-
federal funds for 1997 for the Michigan proposal are estimated for
state appropriated matching at $20,127 in salaries and $20,000
miscellaneous whereas New York is estimating state appropriated funds
at $104,166 for 1997.
Research will be conducted at Michigan State University and Cornell
University, New York Experiment Station. The anticipated date of
completion of the projects is in fiscal year 1998. Keeping with the
Administration's policy of awarding research grants competitively, no
further Federal funding for this grant is requested.
The projects underwent merit reviews in January 1997. The
objectives outlined in the proposal appear to be satisfactory to meet
the goals.
aquaculture, illinois
Researchers are developing and evaluating closed system technology
for application to commercial aquaculture. System design and cost of
production analysis for these systems have been conducted in commercial
trials and pilot studies. The principal researcher believes the
development of alternative aquaculture production systems, such as
closed recirculating systems, world reduce demands for water and would
provide for greater control over production in aquacultural systems.
Closed systems could be established independent of climatic condition
in any region of the country. These systems also offer greater
opportunity to manage aquacultural waste and reduce environmental
impact. In view of significant needs for research in high priority
national interest topics such as improved pest management systems,
funds are not proposed to continue this Special Research Grant. At the
discretion of the state, Hatch Act or other funding could be used to
support this research.
The goal of this program is to develop closed recirculating
aquacultural systems in order to lower production cost, improve product
quality, and reduce the potential environmental impact of aquacultural
production systems. An analysis of production costs and risk factors
has been conducted on a new system design and on commercial systems in
cooperation with the private sector. Best management practices have
been developed for these systems. Solid waste management techniques are
also being evaluated.
The work supported by this grant began in fiscal year 1992. The
appropriation for fiscal years 1992-1993 was $200,000 per year; fiscal
year 1994, $188,000; and fiscal years 1995-1997, $169,000 each year. A
total of $1,095,000 has been appropriated.
The university estimates that non-federal funding for this program
is as follows: in fiscal year 1992, $370,000; in fiscal year 1993,
$126,389; in fiscal year 1994, $191,789; in fiscal year 1995, $152,682;
and in fiscal year 1996, $171,970. The primary source of funding is
from the state with gifts and grants accounting for the remainder. This
estimate does not include substantial in-kind contributions from
industry as this program conducts cooperative research with commercial
producers.
Research is being conducted at Illinois State University at Normal,
Illinois, through a subcontract with the University of Illinois. The
original objectives were to be completed in fiscal year 1995. The
original specific objectives have been met. The specific research
outlined in the current proposal will be completed in fiscal year 1997.
Keeping with the Administration's policy of awarding research grants
competitively, no further Federal funding for this grant is requested.
The agency evaluates the progress of this project on an annual
basis. The university is required to provide an accomplishment report
each year when the new grant proposal is submitted to CSREES for
funding. The 1996 review of the project indicated that the project has
met stated objectives.
aquaculture, louisiana
Research has focused on catfish, crawfish, reddish, and hybrid
striped bass in commercial aquaculture. Research has included basic and
applied research in the areas of production systems, genetics, aquatic
animal health, nutrition, and product quality. The principal researcher
indicates that there is a need to improve production efficiency for a
number of important aquaculture species such as catfish, crawfish,
hybrid striped bass, and reddish in order to enhance the profitability
and sustainability of the aquaculture industry in the region. The
research also addresses the issue of food safety and the quality of
farm-raised products. In view of significant needs for research in high
priority national interest topics such as improved pest management
systems, funds are not proposed to continue this Special Research
Grant. At the discretion of the state, Hatch Act, or other funding
could be used to support this research.
The original goal of this research was to expand the technology
base to enhance the development of aquaculture through a broad research
program that addresses the needs of the industry. The university has
completed studies in the area of fish nutrition, fish health,
production management strategies, alternative species, seafood
processing and broodstock development. Research has led to improved
feed formulations, improved production strategies for crawfish, and
improved processing technologies for aquaculture products.
Research to be conducted under this program will continue research
initiated under the Aquaculture General program in fiscal years 1988
through 1991. The work supported by this new grant category began in
fiscal year 1992 and the appropriation for fiscal years 1992-1993 was
$390,000 per year, $367,000 in fiscal year 1994, and $330,000 in fiscal
years 1995-1997 each year, for a total of $2,137,000.
The university estimates that non-federal funding for this program
is as follows: in fiscal year 1991, $310,051; in fiscal year 1992,
$266,857; in fiscal year 1993, $249,320; in fiscal year 1994, $188,816;
in fiscal year 1995, $159,810; and in fiscal year 1996, $150,104, The
primary source of this funding is from state sources with minor
contributions from industry and other non-federal sources.
Research is being conducted at Louisiana State University. The
original specific objectives were to be completed in 1990. These
specific research objectives have been met. The specific research
outlined in the current proposal will be completed in fiscal year 1998.
Keeping with the Administration's policy of awarding research grants
competitively, no further Federal funding for this grant is requested.
The agency evaluates the progress of this project on an annual
basis. The university is required to provide an accomplishment report
each year when the new grant proposal is submitted to CSREES for
funding. In addition, the CSREES program manager made a site visit in
1996 to meet with the scientists involved in the project and review the
progress of the research. The 1996 review of the project indicated that
the research is addressing important research needs of the aquaculture
industry, the proposed research represented a logical progression of
research previously funded through this program, and that the progress
on previous research funded under this program is well documented.
aquaculture research, stoneville, mississippi
The primary objectives of this research have been to improve
practical feeds and feeding strategies and improve water quality in
channel catfish ponds. Additionally, scientists are evaluating the
application of acoustical instrumentation in commercial aquaculture.
The principal researcher indicates that the research findings from this
project have a direct impact on the profitability and sustainability of
a significant segment of the domestic aquaculture industry. The farm-
raised catfish industry accounts for over 55 percent of the total U.S.
aquaculture industry. Research funded in this program is directed
towards two of the most important research needs of the industry; water
quality and improved feeds and feeding strategies. In view of
significant needs for research in high priority national interest
topics such as improved pest management systems, funds are not proposed
to continue this Special Research Grant. At the discretion of the
state, Hatch Act or other funding could be used to support this
research.
The original goal of this research was to address the research
needs of the catfish industry in the areas of water quality and
nutrition. The research has led to improved water quality management
practices in commercial catfish ponds. Research in the area of catfish
nutrition has led to improved diet formulation and feeding strategies
that have been widely adopted by the industry. Scientists are currently
evaluating five protein levels under two different feeding regimes
using conditions that closely reflect commercial catfish ponds. Studies
evaluating acoustical instrumentation have demonstrated possible
applications in commercial aquaculture. Researchers are determining the
accuracy and effectiveness of upgraded and calibrated acoustical
monitoring equipment.
Grants have been awarded from funds appropriated as follows: fiscal
years 1980-81, $150,000 per year; fiscal year 1982, $240,000; fiscal
year 1983-84, $270,000 per year; fiscal year 1985, $420,000; fiscal
years 1986-87, $400,000 per year; fiscal year 1988, $500,000; fiscal
year 1989, $588,000; fiscal year 1990, $581,000; fiscal year 1991,
$600,000; fiscal years 1992-1993, $700,000 per year; fiscal year 1994,
$658,000; and fiscal years 1995-1997, $592,000 each year. A total of
$8,403,000 has been appropriated.
The university estimates a total of $2,101,508 in non-federal
funding to support this research for fiscal years 1991-1994; $1,128,451
in fiscal year 1995; and $601,473 in fiscal year 1996. The primary
source of non-federal funding is from the state. Additional funding is
provided from product sales, industry contributions, and other
miscellaneous sources.
The grants have been awarded to the Mississippi Agricultural
Experiment Station. All research is conducted at the Delta Branch
Experiment Station, Stoneville, Mississippi. The acoustical research in
aquaculture will be conducted in cooperation with the National Center
for Physical Acoustics at the University of Mississippi. The
anticipated completion date for the specific original research
objectives was 1984. These specific research objectives have been met,
however, the broader research objectives of the program are still being
addressed. The specific research outlined in the current proposal will
be completed in December 1997. Keeping with the Administration's policy
of awarding research grants competitively, no further Federal funding
for this grant is requested. Research could be continued at the State's
discretion using formula or other funds.
The agency evaluates the progress of this project on an annual
basis. The university is required to provide an accomplishment report
when the new proposal is submitted to CSREES for funding. The 1996
review indicated that the research addresses important opportunities in
the farm raised catfish industry, significant progress has been
reported on specific research objectives, and that the scientists
involved in the project are leading authorities in this area of
research.
aquaculture, north carolina
CSREES has requested the university to submit a grant proposal that
has not been received. The researchers indicate that the research will
focus on reducing the environmental impact of aquaculture systems,
reducing the impact of diseases in cultured finfish, and reducing the
inherent risk of culturing emerging species. The principal researcher
indicates that there is a need to reduce the environmental impact of
aquaculture systems, to enhance fish health management strategies, and
to reduce the impediments to culture selected emerging species.
Improved environmental quality and improved production efficiency in
aquacultural systems could have regional and national impacts.
Diversification of the industry in terms of species cultured is of
benefit to both the producer and consumer of aquaculture products. In
view of the significant needs for research in high priority national
interest topics such as improved pest management systems, funds are not
proposed to continue this Special Research Grant. At the discretion of
the state, Hatch Act or other funding could be used to support this
research. The principal researcher believes this research to be of
national, regional or local needs.
The goals of the research are to reduce environmental impacts of
aquaculture systems by improved system design and improved feeding
strategies, to evaluate the efficacy of current vaccination methods and
develop improved methods for vaccine administration, and to develop
culture techniques for potentially important aquaculture species.
The work supported by this grant began in fiscal year 1997 and the
appropriation for fiscal year 1997 is $150,000. The university reports
a total of $94,000 of non-federal funding to support research carried
under this program for fiscal year 1997. The primary source of the
nonfederal funding was from state sources.
Research is being conducted at North Carolina State University.
This is the first year of the project. The researchers anticipate that
the specific research objectives will be completed in 1999. Keeping
with the Administration's policy of awarding research grants
competitively, no further Federal funding for this grant is requested.
The agency will conduct the initial review of this proposal when it
is submitted to CSREES for funding. Since this is the first year of the
program, the proposal will be externally peer reviewed as part of the
CSREES evaluation.
babcock institute for international dairy research and development
The Babcock Institute for International Dairy Research and
Development was established with participation of the University of
Wisconsin-Madison College of Agriculture and Life Sciences, School of
Veterinary Medicine and the Cooperative Extension Division. The
objective of the Babcock Institute is to link the U.S. dairy industry
with the rest of the world through degree training, continuing
education, technology transfer, adaptive research, scientific
collaboration and market analysis. The principal researcher believes
the need is to strengthen dairy industries around the world, to enhance
international commercial and scientific collaborative opportunities for
the U.S. dairy industry, and to draw upon global perspectives to build
insight into the strategic planning of the U.S. dairy industry. Because
of the significant need for research in high priority national topics,
such as the Department's Pest Management Initiative, funds are not
proposed to continue this Special Research Grant. At the discretion of
the State, Hatch Act or other funding could be used to support this
research.
The goal of the Institute remains the linkage of the U.S. dairy
industry with the rest of the world through training, continuing
education and outreach, technology transfer, adaptive research,
scientific collaboration and market analysis. Initial efforts were
focused on planning and staffing. An initial activity was, and
continues to be, the development of multi language extension materials
about basic management techniques essential to optimize performance of
U.S. germplasm overseas. This activity has grown to include manuals on
Breeding and Genetics, Lactation and Milking, and Basic Dairy Farm
Financial Management published in English, Spanish, French, Russian,
and Chinese. Research on potential implications of NAFTA and GATT on
the U.S. dairy industry was completed. A technical workshop on dairy
grazing in New Zealand and the Midwest was organized and held in
Madison during the fall of 1993. A technical workshop on Nutrient
Management, Manure and the Dairy Industry: European Perspectives and
Wisconsin's Challenges was held in Madison, Wisconsin during September
1994. A round table was held in January 1995 addressing ``World Dairy
Markets in the Post-GATT Era.'' Funding from this project also
supported the Great Lakes Dairy Sheep Symposium in 1995 and 1996, and
creamed a World Wide Web site in 1996 for distribution of Babcock
Institute technical dairy fact sheets in four languages. The first
International Dairy Short Course for a group of producers and
technicians from Argentina has been organized on the University of
Wisconsin Campus. Scientist's are being supported in collaborative
research with New Zealand primarily to gain a better understanding of
grazing systems as related to dairy management.
Grants have been awarded from funds appropriated as follows: fiscal
years 1992 and 1993, $75,000 per year; fiscal year 1994, $250,000; and
fiscal years 1995-1997, $312,000 per year. A total of $1,336,000 has
been appropriated.
During fiscal year 1992, $13,145 of State funds were used to
support this program and $19,745 of State funds in fiscal year 1993 for
a total of $32,890 during the first two years of this research.
Information is not available for fiscal year 1994-1996.
Research is being conducted at the University of Wisconsin-Madison
College of Agriculture and Life Sciences. The Babcock Institute's
overarching mission has been to link the U.S. dairy industry and its
trade potential with overseas dairy industries and markets. The
original objectives of this project have remained consistent over the
years. However, each year specific objectives were proposed to further
the mission of the Institute and to build on previous accomplishments.
The Institute has accomplished specific objectives each year in a
timely manner. This objective remains of increasing importance with
continued development of international markets for dairy products and
technologies. The University researchers anticipate that work currently
in progress will be completed by September 1998. In keeping with the
Administration's policy of awarding research grants competitively, no
further Federal funding for this grant is requested.
The Babcock Institute undergoes two independent review processes
each year. The first is done by a committee of university and industry
representatives who review the annual research proposal and amend it
prior to submission to the agency. The annual proposal is reviewed by
agency technical staff prior to approval for fund release. In addition,
the institute was included in a comprehensive review of the programs of
the Department of Dairy Science at the University of Wisconsin in May
1995. The agency project officer has conducted two on-site reviews of
the institute since it's formation in 1992. The most recent review has
found that the approach proposed by the researchers is appropriate and
that the researchers are well qualified to perform the objectives as
stated.
barley feed for rangeland cattle, montana
This project will support research on the nutritional value of
barley cultivars as feed for beef cattle. This effort will assist with
the breeding and selection of superior types that can be more
competitive with other feed grains and improve farmer income from
barley crops grown in rotational systems in the Northern Great Plains.
Barley as a feed grain is grown extensively in the United States. Based
on chemical analyses and the experience of some cattle feeders the
principal researcher believes it should have a feed value on par with
corn and wheat. However, it is listed as inferior to both in feeds hand
books and is therefore discounted in the market. Comprehensive feeding
studies of various barley types will be conducted to document the value
as a feed grain for beef cattle. In view of significant needs for
research in high priority national interest topics such as improved
pest management systems, funds are not proposed to continue this
Special Research Grant. At the discretion of the state, Hatch Act or
other funding could be used to support this research. The principal
researcher believes this research to be of national, regional or local
need. The original goal of this research was to determine the true feed
value of barley for feeder cattle, and thereby improve the economic
return to barley production.
The work supported by this grant began in fiscal year 1996 with an
appropriation of $250,000. For fiscal year 1997, the appropriation is
$500,000. The total appropriation is $750,000. The Montana State
Agricultural Experiment Station is estimated to provide $30,000 in
staff time and operational funds toward this project. The Principal
investigator has generated an additional $130,000 of grant funding to
support the work.
Research will be conducted at Montana State University. The project
is proposed for completion following fiscal year 2001. Progress toward
the objectives have been reported by the principal researcher. Keeping
with the Administration's policy of awarding research grants
competitively, no further Federal funding for this grant is requested.
Research could be continued at the State's discretion using formula
funds.
The project was peer reviewed in 1996 and judged to be
scientifically sound and appropriate for the stated objectives.
binational agricultural research and development program
The Binational Agricultural Research and Development (BARD) Program
is a competitive research grants program that supports fundamental
research in areas of animal and plant sciences, economics, and
engineering, that is important to both U.S. and Israel agriculture.
Each application for funding must be a joint effort put forward by a
team of U.S. and Israel scientists. The requests for proposals for the
1997 competition was released in the fall of 1996. The proposals
received are currently under review and funding decisions are expected
to be completed by May 1997. The funds available through the BARD
Special Research Grants Program are used to support the U. S. portion
of approximately twenty joint U. S./Israel proposals each year. All
proposals awarded by the BARD program must have significance to both
U.S. and Israel agriculture. Thus, applicants must justify the work in
terms of its global significance in order to receive funding.
Fundamental research supported by the program provides the knowledge
base needed to develop solutions to pressing agricultural problems in
both nations.
The goal of the BARD program is to support fundamental research in
plant and animal sciences, economics, and engineering that are
important to both U.S. and Israel agriculture. In that, the generation
of new knowledge is an ongoing process, the original goal of the BARD
program to produce new knowledge continues today. Much of the research
supported concentrates on issues of animal and plant health (including
studies of the pests and pathogens of both plants and animals), and
responses of plants to environmental conditions (particularly crops
grown in warm, dry climates). Many accomplishments in fundamental
sciences have been made in these areas that will lead to the
development of crop plants resistant to disease, pests, and harsh
environmental conditions; reduction in livestock diseases; and
increased livestock production.
An agreement between the U.S. and Israel governments to establish
BARD was signed in 1977, and an initial endowment fund of $80 million
was established through equal contributions from both countries.\1\
Funds for BARD were available from the interest earned from the
endowment fund, but a reduction in interest rates and increased
research costs over the years impeded the ability of the BARD program
to adequately meet the research needs of each country's producers and
consumers. In fiscal year 1994, the Department directed that $2.5
million of funding appropriated for CSREES' National Research
Initiative (NRI) program be used for the BARD program to supplement the
interest earned from the endowment fund, and that amount was matched by
Israel. In fiscal year 1995, Congressional language directed that
CSREES again use $2.5 million of the NRI appropriation for BARD, and in
fiscal year 1996, the Department directed that a third $2.5 million
increment of NRI appropriations be used for BARD. CSREES has received a
direct appropriation in the amount of $2 million for BARD in fiscal
year 1997.
---------------------------------------------------------------------------
\1\ Subsequent increase of $30 million to current total of $110
million.
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Each BARD grant funded by CSREES is for the U.S. portion of a joint
U.S./Israel project. The Israeli portion of the joint project is
supported from either the endowment fund or from supplemental funds
provided by Israel. Israel matches the supplemental funds provided by
CSREES. Therefore, a significant portion of each project is supported
with non-federal funds.
BARD is an ongoing program designed to support fundamental science
of importance to agriculture. Each year new projects are supported
through the competitive process. Therefore, new objectives are set
forth each year through the support of new and innovative proposals.
Each proposal is funded for two to three years.
Each proposal submitted to the BARD program receives a peer review
evaluation. Only those proposals which review favorably are funded.
CSREES has not conducted an overarching evaluation of the BARD program.
However, the BARD program has an administrative council that is chaired
by the ARS administrator. The council is responsible for providing
advice as to content and policies of the BARD program.
biodiesel research, missouri
Research on biodiesel involves examining the feasibility of
producing biodiesel and other higher value products from oilseed crops
including soybeans, canola, sunflower and industrial rapeseed. It also
involves identifying and evaluating potential markets for the fuel and
other products. An important thrust is to identify how biodiesel and
other environmentally-friendly products can help meet state and federal
environmental mandates of reduced air and water pollution. The project
is also evaluating local processing plants whereby farmers could
produce crops, process the crops locally and use the fuel and high
protein feed coproducts on their farms or locally. The initial work is
being done in Missouri. The results may provide the agricultural
community with alternative crops and more diverse markets, additional
marketable products and a locally grown source of fuel. This may result
in increased investment in local communities, additional jobs, and
increased value added in the farm and rural community sectors. The
principal investigator believes this research to be of local, regional
and national importance. However, in view of the significant need for
research of high-priority national scope, such as integrated pest
management, additional funding for this project is not proposed. At the
discretion of the State, this effort could be supported with Hatch Act
or other funding.
The goals were to examine the feasibility of producing biodiesel
and other higher value products from oilseed crops, plus to increase
the value of coproducts. Results indicate that biodiesel can be
produced most economically from soybeans, primarily because of the high
value of soybean meal. Research indicates that with a community based
biodiesel processing plant, costs of production could be as low as
$0.59 per gallon, although farmers might increase revenues by selling
the soybean oil rather than using it to produce biodiesel. Since small
quantities of biodiesel regularly sell for $4.00 to $9.00 per gallon,
the structure of the production, marketing and transportation is
currently under evaluation to identify more efficient and less costly
ways to produce and market biodiesel. Also, a study of which markets
might provide the best opportunity to use increased levels of biodiesel
is underway. Such markets might include underground mining and the
marine industry in addition to urban mass transit systems and cities
having problems meeting more stringent air quality mandates. Research
results indicate that for each one million gallons of biodiesel used in
a B20 blend (20 percent biodiesel and 80 percent petroleum-based
diesel) by the Kansas City, Missouri, transit fleet would have the
following estimated impacts: almost 100 additional jobs; increased
investment of $500,000; net increase in personal income of $3.2
million; and increase in total economic activity in the region of $9.6
million. Research has also identified that rapeseed meal compares
favorably to soybean meal and blood meal as an animal feed. It has a
higher escape protein value than soybean meal. This research is carried
out in close cooperation and coordination with other state and federal
agencies, plus trade associations such as the National Biodiesel Board,
the United Soybean Board, American Soybean Association, and others.
The work began by this program began in fiscal 1993, and the
appropriation for that year was $50,000. The appropriation for 1994 was
$141,000; and for fiscal years 1995 through 1997 was $152,000 annually.
A total of $647,000 has been appropriated.
The source of non-federal funds is state appropriated funds. The
level in 1994 was $7,310. The funding level in 1995 was $74,854.
Additionally, some work funded by this grant has been conducted in
cooperation with the National Biodiesel Board, plus the Missouri
Soybean Merchandising Council. The level of those matching funds for
these two sources are not available.
The work is being carried out at the University of Missouri-
Columbia. The principals estimate that the work with biodiesel will
require an additional two years to complete. Additionally, the work on
higher value products, such as solvents from biodiesel, is expected to
be on-going. Successes with the higher value products will help make
bio-based business more profitable, thus increasing chances for success
which will result in more value added opportunities for farmers and
rural communities. Keeping with the Administration's policy of awarding
research grants competitively, no further Federal funding for this
grant is requested.
The CSREES agency scientist reviews the annual proposal submissions
to evaluate progress to date.
biotechnology, oregon
Research that has been funded under the Biotechnology Oregon
project includes the use of nematodes for biocontrol of insect pests;
development of bacterial vectors for vaccines and food additives;
resistance to crown gall disease in plants; enhancement of anthocyanin
pigments in plants, and enzymes for degrading lignin and wood waste.
The principal researcher believes the research funding is requested to
enhance the biotechnology research infrastructure in basic and applied
biotechnology within the cooperating institutions, Oregon State
University, the University of Oregon, and the Oregon Graduate Institute
of Science and Technology. In view of significant needs for research in
high priority national interest topics such as improved pest management
systems, funds are not proposed to continue this Special Research
Grant. At the discretion of the State, Hatch Act or other funding could
be used to support this research, including IPM competitive grant and
emerging pest and disease funds.
The goal of the program is to improve the biotechnology research
infrastructure, to foster research discoveries, and to develop
technologies that lead to agricultural applications. Preference is
given to research that has the potential for commercial development in
the near future and that has the potential for additional funding from
other sources. Five research projects in the areas mentioned above were
funded under the grant in 1996.
The work supported by this grant began in fiscal year 1996, and the
appropriation for fiscal year 1996 was $217,000, and for fiscal year
1997 is $250,000. A total of $467,000 has been appropriated. In fiscal
year 1995, the State of Oregon appropriated $1,226,706 for
biotechnology research at Oregon State University. For fiscal year
1996, non-federal support amounted to $303,100, mostly from the private
sector.
The research is being carried out at three cooperating
institutions, Oregon State University, the University of Oregon, and
the Oregon Graduate Institute of Science and Technology. Both the
overall grant and the individual research projects funded under it are
funded on a two-year basis. The Biotechnology Oregon grant was first
awarded in 1996 and the anticipated completion date is July 31, 1998.
Keeping with the Administration's policy of awarding research grants
competitively, no further Federal funding for this grant is requested.
Research could be continued at the State's discretion using formula or
other funds.
The agency has not yet received the Biotechnology Oregon proposal
for fiscal year 1997. The project was last evaluated for scientific
merit by a Peer Review Panel in the spring of 1996. The Panel
recommended approval without change in the research approach and plans.
broom snakeweed
Current research addresses several areas for broom snakeweed
control, including efforts to Understanding more fully the onset of
invasion and persistence of broom snakeweed, evaluate the toxicology
and physiological effects of broom snakeweed on livestock, and develop
an integrated weed management approach for broom snakeweed. Broom
snakeweed is a serious weed in the southwestern United States and
adjacent Western States. About 22 percent of rangeland in Texas, and 60
percent in New Mexico is infested to some degree by the weed. Current
cost for control of broom snakeweed in the southwestern United States
is estimated at over $41 million. Dense broom snakeweed stands cause
significant economic losses in the plains, prairie and desert areas of
the central and southwestern United States. Snakeweed is a poisonous
plant causing death and abortion in livestock and reduced productivity
of associated vegetation. In view of significant needs for research in
high priority national interest topics such as improved pest management
systems, funds are not proposed to continue this Special Research
Grant. At the discretion of the state, Hatch Act or other funding could
be used to support this research.
Ground surveys have been conducted statewide from 1989 to map
snakeweed distribution and relative density patterns throughout every
county in New Mexico. This project is in its fourth research year. A
Geographic Information System [GIS] approach is used to relate
snakeweed populations to plant communities and soil type in areas where
snakeweed is particularly dense. Research is addressing three general
areas which are, first, ecology and management; second, biological
control studies; and third, toxicology and animal health research. A
considerable amount of useful research and practical application has
resulted from this special grant. As an example, in biological control,
several plant pathogens and insects are proving to be effective in
snakeweed's control. Another area of emphasis, has been grazing
management techniques and feeding studies to minimize toxicological
effects on livestock. Feeding trials have demonstrated that, snakeweed
ingestion at 10 percent of diet did not impair fertility or semen
characteristics in the test animal which was male rats.
Grants have been awarded from funds appropriated as follows: fiscal
year 1989, $100,000; fiscal year 1990, $148,000; fiscal year 1991,
$150,000; fiscal years 1992 and 1993, $200,000 per year; fiscal year
1994, $188,000; fiscal years 1995 and 1996, $169,000 each year; and
fiscal year 1997, $175,000. A total of $1,499,000 has been
appropriated.
The non-federal funds and sources provided for this grant were as
follows: $249,251 state appropriations in 1991; $200,110 state
appropriations in 1992; $334,779 state appropriations in 1993; $302,793
state appropriations in 1994; $294,451 state appropriations in 1995,
and an estimated $300,000 in state appropriations in 1996.
Research is being conducted at New Mexico State University. The
project was initiated in 1989. Currently additional and related
objectives have evolved and anticipated completion date for these is
1999. Considerable progress has been made on many of the objectives.
Anticipated completion date of the additional and related objectives
that have resulted based on the current work, would indicate another
five years. Keeping with the Administration's policy of awarding
research grants competitively, no further Federal funding for this
grant is requested.
Each year the grant is peer reviewed and reviewed by CSREES's
senior scientific staff. A summary of those review indicated progress
in the achieving the objectives.
canola research special grant, kansas state university
Rapeseed lines from around the world are being evaluated for
increased winter hardiness. Elite lines are being used to develop
canola germplasm lines that will survive the winter in the central
Great Plains. This will be accomplished using a plant breeding program.
The domestic demand for canola oil has been increasing rapidly. With
little domestic production, most of the demand has been met by imports.
Private seed companies are not devoting time or money to develop the
cultivars needed for canola production in Kansas and central Great
Plains. Oil seed crushing facilities in the region are shutting down
for several months each year due to a lack of sunflowers/soybeans grown
in the area. A canola harvest in July would precede the sunflower or
soybean harvest by three months, help crushing facilities continue
crushing during this slow period, and maintain jobs. A canola industry
in the area would also help spread the risk of the producers into more
than just a small grain commodity base and into the oilseed market.
Germplasm developed at Kansas State University is being evaluated from
Virginia and Georgia to Wyoming and Texas and may help develop an
industry in other areas of the country. In view of the significant
needs for research in high priority national interest topics such as
improved pest management systems, funds are not proposed to continue
this Special Research Grant. At the discretion of the state, Hatch Act
or other funding could be used to support this research. The principal
researcher believes this research to be of national, regional or local
need.
The original goal was to collect germplasm with increased winter
hardiness and use it to develop cultivars with sufficient winter
survivability to be grown in the central Great Plains. At present,
nearly 700 rapeseed and canola quality lines have been acquired and
tested. The hardiest have been used as parents to produce lines. In the
past five years, over 800 crosses have been made. Field and laboratory
testing began during the fall of 1993. In 1993-94, advanced selections
from these populations had a 30 percent increase in winter survival
over the best released cultivars in western Kansas and in environments
where winter survival was not a factor, these same lines had a 20
percent yield advantage over the best released cultivars. In 1994-95
this germplasm was tested at 12 locations in seven states throughout
the Great Plains and Midwest. Over all locations, several experimental
lines that have shown increased winter hardiness in past years had
yields equal to the best cultivars used as checks. The winter of 1995-
96 has been severe in the Great Plains as well as most of the country.
Severe winter kill is expected in the breeding nurseries with only the
hardiest plants surviving. Advanced lines continued to demonstrate a
winter survival advantage over previously released cultivars. Over the
next several years, surviving plants will be advanced and those lines
possessing superior traits will become the basis of our second
generation of released cultivars. In 1995, KS3579 was released to other
breeders as a germplasm. This line has shown significant improvement in
winter hardiness and will be beneficial in increasing winter hardiness
in canola cultivars around the world. A canola quality rapeseed
cultivar is planned for release in the summer of 1997. It will be used
as the basis for establishing production in south central Kansas, as
well as other areas of the Great Plains.
Work began on this project in 1992. Funding for fiscal year 1992
and fiscal year 1993, was $100,000 per year; fiscal year 1994 was
$94,000; and fiscal years 1995 through 1997 were $85,000 each. A total
of $549,000 has been appropriated.
Kansas State University has provided $44,960 in fiscal year 1992,
$21,321 in fiscal year 1993, and $22,336 in fiscal year 1994, $23,399
in fiscal year 1995, $24,513 in fiscal year 1996 and $25,679 in fiscal
year 1997. An additional $50,000 was provided through a grant from Dane
G. Hansen Foundation for fiscal years 1993-1995.
The work is being conducted at Kansas State University,
Agricultural Experiment Station, Department of Agronomy. The primary
research site is at Manhattan with additional field locations at
Hutchinson, Hays, Colby, Belleville, Kingman, Garden City and Parsons,
Kansas. Germplasm developed by Kansas State University is also being
cooperatively tested by researchers in Texas, Missouri, Colorado,
Nebraska, Illinois, Arkansas, Oklahoma, and Wyoming.
The original objectives were to develop the factors needed to
establish canola production in Kansas and the Central Great Plains. The
primary concern addressed by this project was the lack of cultivars
adapted to the area. Advanced selections adapted for the growing
conditions of the Great Plains and representing a significant
improvement in both winter hardiness and yield potential for our unique
environment, are being developed. Foundation seed of the best of these
lines will be increased over the 1996-1997 growing season and released
to certified seed growers in 1997. Industrial groups have been
instrumental in developing a market for the area. Improved germplasm in
the early generations continues to be identified so progress and
cultivar improvement can continue. The average time between the initial
cross and a released variety is 8 to 10 years. The first crosses made
at Kansas State University were in 1993. Germplasm that is currently
targeted for improvement will be released in year 2007. Keeping with
the Administration's policy of awarding research grants competitively,
no further Federal funding for this grant is requested. Research could
be continued at the State's discretion using formula or other funds.
This project is reviewed annually, based upon the annual progress
report and presentation at the Southern Extension and Research Activity
Information Exchange Group for oilseeds [SERA-IEG-11]. The review is
conducted by the cognizant staff scientist who has determined that the
research is in accordance with the mission of the agency.
center for animal health and productivity, pennsylvania
This research is designed to reduce nutrient transfer to the
environment surrounding dairy farms in the Chesapeake Bay watershed.
Progress to date includes the development of a individual dairy cow
model which will predict absorbed amino acids and the loss of nitrogen
in manure. This model has been developed into user friendly software so
that trained farm advisors can evaluate herd nutrient management status
while on site. A whole farm model has been developed which integrates
feeding and agronomic practices to predict utilization of nitrogen and
farm surpluses. Using these tools, a survey of dairy farms in the
region has been done to assess nitrogen status on dairy farms and
potential management practices to reduce nitrogen excesses on dairy
farms. Refinement of the model tools and research to refine estimates
of the environmental fate of excess nitrogen from dairy farms is in
progress.
The principal researcher believes that reducing non-point pollution
of ground and surface water by nitrogen from intensive livestock
production units is of concern nationally, and especially in sensitive
ecosystems like the Chesapeake Bay. This research is designed to find
alternative feeding and cropping systems which will reduce net nutrient
flux on Pennsylvania dairy farms to near zero. In view of significant
needs for research in high priority national interest topics such as
improved pest management systems, funds are not proposed to continue
this Special Research Grant. At the discretion of the State, Hatch Act
or other funding could be used to support this research. The principal
researcher believes this research to be of national, regional, and
local need.
The original goal of this research remains the development of whole
farm management systems which will reduce nutrient losses to the
external environment to near zero. To date the researchers have
developed their own models to more accurately formulate rations for
individual dairy cows which permit the comparison of alternative
feeding programs based upon both maximal animal performance and minimal
nutrient losses in animal waste. This model is being tested on select
commercial dairy farms to evaluate the extent to which total nitrogen
losses in manure can be reduced without impacting economic performance
of the farm. At the same time, whole farm nutrient models have been
developed to evaluate alternative cropping systems which will make
maximum use of nutrients from animal waste and minimize nutrient flux
from the total farm system. These tools are currently being used to
survey the current status of nutrient balance on farms in the area and
efforts to fine tune the tools are in progress.
A grant has been awarded from funds appropriated in fiscal year
1993 for $134,000 and in fiscal year 1994 for $126,000. In fiscal years
1995-1997, $113,000 has been appropriated each year. A total of
$599,000 has been appropriated.
Research is being conducted at the University of Pennsylvania,
College of Veterinary Medicine. The University researchers anticipate
that work currently underway will be completed by September 1998. This
will complete the original objectives of the research. The principal
researcher indicates that consideration has been given to the
broadening of objectives to include additional nutrients in the model
system, but this has been dropped because technical expertise required
is currently not readily available. Keeping with the Administration's
policy of awarding research grants competitively, no further Federal
funding for this grant is requested.
The Center for Animal Health and Productivity project was last
reviewed in June 1996. An on site review by agency technical staff was
conducted in June 1995. It was concluded that project objectives are
within the goals of the program, are within the mission of both USDA
and CSREES, and the institution is well equipped and qualified to carry
out the research project.
center for innovative food technology, ohio
Funds from the fiscal year 1996 grant are supporting research
projects on using neural network/fuzzy logic tools to develop a model
of a growing and processing cycle for processing tomatoes, developing
specifications for a system and to optimize the techniques necessary to
satisfactorily package products sterilized non-thermally with pulsed
electric field systems, to demonstrate whether an ultrasonic washing
appliance has the capacity to kill common foodborne pathogens or modify
it to do so, to demonstrate the feasibility of using enzyme linked
immunosorbent assays in the measurement of pesticides in Great Lakes
fish, to refine and optimize the performance of a prototype turkey
deboning system, to develop a vision based inspection system for baked
goods, and to develop electrostatic coating processes for applying
powdered materials to food products.
The principal researcher believes the value-added food processing
industry is the largest industry in Midwestern states, including Ohio
where the industry contributes over $17 billion to the annual economy.
From an economic development point of view, processing and adding-value
to crops grown within a region is the largest possible stimulus to that
region's total economic product. This program aims to partner with and
encourage small and medium sized companies to undertake innovative
research that might otherwise not be undertaken due to risk aversion
and limited financial resources for research and development in these
companies. In view of significant needs for research in high priority
national interest topics such as improved pest management systems and
food safety, funds are not proposed to continue this Special Research
Grant. At the discretion of the State, Hatch Act or other funding could
be used to support this research.
The original goal of the research was to develop innovative
processing techniques to increase food safety and quality or reduce
processing costs. The neural network project has led to a model that
will be used to relate growing and processing variables to product
quality, resulting in higher product quality at lower cost. The pulsed
electric field sterilization program has demonstrated the ability to
produce high quality products with extended shelf stability. The
research on immunosorbent assays has demonstrated benefits, beyond the
original scope of the project, to the poultry industry by providing an
inexpensive and timely method for measuring residual pesticide levels
in turkeys. The coating project has generated several applications
where the shelf life of products can be extended.
The work supported by this grant began in fiscal year 1995. The
project received appropriations of $181,000 in fiscal years 1995
through 1997. A total of $543,000 has been appropriated. In fiscal year
1995, non-federal funds included $26,000 from state funds and $70,000
from industry memberships. In fiscal year 1996, non-federal funds
included $26,000 in state funds and $80,000 in industry funds.
Research is being conducted in the laboratories of the Ohio State
University and at various participating companies in Ohio, Illinois,
and Pennsylvania. The principal investigator anticipates that some
projects supported by the fiscal year 1996 grant will have been
completed by February 28, 1997, while other projects will not be
completed until February 28, 1998. Keeping with the Administration's
policy of awarding research grants competitively, no further Federal
funding for this grant is requested. Research could be continued at the
State's discretion using formula funds.
An agency science specialist conducts a merit review of the
proposal submitted in support of the appropriation on an annual basis.
Since the agency has not yet received the proposal in support of the
fiscal year 1997 proposal, the last review of the proposal was
conducted on January 22, 1996. At that time, the agency science
specialist believed that the projects addressed issues relevant to food
manufacturing, were scientifically sound, and that satisfactory
progress was being demonstrated using previously awarded grant funds.
center for rural studies, vermont
The University is developing and refining social and economic
indicators used to evaluate the impact of economic development
programming and activities. They are also perfecting a delivery format
for technical assistance for community and small business development.
A major focus of current research relates to utilizing the World Wide
Web as a major delivery vehicle. The principal researcher believes that
the database and analytical capability provide technical indicators and
timely information to support entrepreneurial and community development
activities in the State. The program is conducted in concert with other
University and State agency outreach activities. In view of significant
needs for research in high priority national interest topics, funds are
not proposed to continue this Special Research Grant. At the discretion
of the State, Hatch Act or other funding could be used to support this
research.
The original goal was to create a database and analytical
capability for rural development in Vermont. Examples of past
accomplishments include thematic maps presented to help target child
hunger programs and target places for programmatic intervention;
analytical reports provided to guide the development of retail shopping
areas; a reference volume, ``Economic Handbook for Vermont Counties,''
produced for public distribution to help Vermont citizens and leaders
answer the most frequently asked questions about their State and
counties; currently utilizing the World Wide Web to disseminate
information and technical assistance.
The work supported by this grant began in fiscal year 1992 and the
appropriation for fiscal years 1992-1993 was $37,000 per year; fiscal
year 1994, $35,000; and fiscal years 1995-1997, $32,000, for a total of
$205,000. Prior to receipt of any Federal funds in fiscal year 1991,
the Center was supported by $91,130 in State and other non-federal
funds. In fiscal year 1992, these funds increased to $101,298 and to
$143,124 in fiscal year 1993. The amount of non-federal dollars was
$3,547 for fiscal years 1995-1996 and $2,931 in fiscal year 1997 plus
researcher's salary.
Research is being conducted at the University of Vermont. The
original completion date was September 30, 1993. The original
objectives of the research project have been met. The completion of
additional objectives is scheduled for August 31, 1998. However, in
keeping with the Administration's policy of awarding research grants
competitively, no further Federal funding for this grant is requested.
Research could be continued at the State's discretion using formula
funds.
The agency evaluates merit of research proposals as submitted. No
formal evaluation of this project has been conducted.
chesapeake bay aquaculture, maryland
The objective of this research is to improve the culture of striped
bass through genetics, reproductive biology, nutrition, health
management, waste management and product quality. The research provides
a balance between basic and applied research. The principal researcher
believes the Mid-Atlantic region of the country has significant
opportunities to contribute to the overall development of the domestic
aquaculture industry. Research supported through this program can have
broad application and enhance production efficiency and the
sustainability of aquaculture as a form of production agriculture. In
view of significant needs for research in high priority national
interest topics such as improved pest management systems, funds are not
proposed to continue this Special Research Grant. At the discretion of
the state, Hatch Act or other funding could be used to support this
research.
The original research goal was to generate new knowledge that can
be utilized by the aquaculture industry to address problems limiting
the expansion of the industry in Maryland and the Mid-Atlantic region.
The program focuses on closing the life cycle of the striped bass and
its hybrids, enhancing production efficiency, and improving product
quality under aquaculture conditions. Research is conducted in the
areas of growth, reproduction and development, aquacultural systems,
product quality, and aquatic animal health. Researchers are currently
evaluating the performance of triploid striped bass. Progress has been
made in developing controlled artificial spawning techniques and
refining the nutritional requirements of striped bass. Scientists
continue studies to characterize waste production as a function of
feeding levels to reduce waste generation in striped bass production
systems.
The work supported under this grant began in fiscal year 1990 and
the appropriation for fiscal year 1990 was $370,000. The fiscal years
1991-1993 was $437,000 per year; fiscal year 1994, $411,000; and fiscal
years 1995-1997, $370,000 each year. A total of $3,202,000 has been
appropriated.
The university reports the amount of non-federal funding for this
program is as follows: in fiscal years 1991 and 1992, $200,000; in
fiscal years 1993 and 1994, $175,000; in fiscal year 1995, $400,000;
and in fiscal year 1996, $536,000. The university reports that these
funds are from direct state appropriations and other non-federal
funding sources.
Research is being conducted at the University of Maryland. The
original specific research objectives were to be completed in 1993.
These specific research objectives have been met. The specific research
outlined in the current proposal will be completed in fiscal year 1998.
Keeping with the Administration's policy of awarding research grants
competitively, no further Federal funding for this grant is requested.
The agency evaluates the progress of this project on an annual
basis. The university is required to submit an accomplishment report
when the new proposal is submitted to CSREES for funding. The 1996
review indicated the proposal was well written with objectives clearly
stated, that adequate progress had been reported on previous work, and
that the scientific expertise is appropriate for the proposed research.
coastal cultivars
This project will be undertaken to identify new ornamental, fruit,
and vegetable crops for the lower coastal plain of Georgia and develop
management systems for profitable production. This effort is designed
to improve the rural economy and to help supply an expanding market for
the products in that region and possibly beyond. The research under
this project has regional significance for coastal zone land in the
South Eastern U.S. on potential new plants for the growing regional
market for ornamental and speciality fruits and vegetables. In view of
significant needs for research in high priority national interest
topics such as improved pest management systems, funds are not proposed
to continue this Special Research Grant. At the discretion of the
State, Hatch Act or other funding could be used to support this
research. The original goal of this research was to identify new plant
cultivars to provide alternative crops with economic potential to the
coastal area.
The work supported by this grant begins in fiscal year 1997 and the
appropriation for fiscal year 1997 is $200,000.
Research will be conducted at the University of Georgia coastal
garden. The project is projected for three years duration and,
therefore, should be completed following fiscal year 1999. In keeping
with the Administration's policy of awarding research grants
competitively, no further funding for this grant is requested.
competitiveness of agriculture products, washington
This grant improves the global competitiveness of value-added
agricultural and forest products produced in the Pacific Northwest
region. It identifies and conducts needed research and disseminates the
results through various activities such as trade shows, international
conferences, and a variety of media. Research focuses on foreign market
assessments, product development, and policy and trade barriers.
Particular attention has been paid to developing the technology that
can add value to U.S. agricultural and forest products in order to make
U.S. exports more competitive. The principal researchers believe that
rural economic development and growth of the Pacific Northwest region
is dependent upon the ability of the agricultural and forest product
sectors to penetrate overseas markets, especially in Pacific Rim
countries. Japan and China present especially attractive prospects for
evolving U.S. food and forest products exports. In view of significant
needs for research in high priority, national interest topics such as
improved pest management systems, funds are not proposed to continue
this Special Research Grant. At the discretion of the State, Hatch Act,
or other funding could be used to support this research.
The original goals were to develop export markets for value-added
food and forest products produced in the Pacific Northwest and to
improve competitiveness of these industries. Research at Washington
State University's International Marketing Program for Agricultural
Commodities and Trade enables Pacific Northwest producers to grow and
export Asian and other products never before produced in this country
on a commercial basis. The Center identified export opportunities in
East Asia and elsewhere and has developed production and marketing
systems for Wagyu beef, azuki beans, edamame soybean, and wasabi
radish, to name a few. Other promising products are in the pipeline
leading toward commercialization. The Center is also developing
economical and environmentally-friendly food processing techniques. It
searches for scientific solutions to trade barriers. It monitors
progress in multilateral trade agreements, leading to opportunities for
trade liberalization.
Research at the University of Washington's Center for International
Trade in Forest Products has helped open the Japanese housing market to
U.S. exports. The Center hosted a significant housing export conference
in Seattle in September 1996 at which U.S. Ambassador Walter Mondale
and Japanese officials agreed to what has been a major breakthrough in
U.S. export opportunities. Japanese builders have benefited from the
Center's research. They have been taught how to lower their costs by
using U.S. building techniques and products. Valueadded exports have
grown 200 percent since 1989 as Japan deregulated its housing market
after recognizing the opportunities set forth by this research. Other
research at the Center developed export and marketing information for
prefabricated housing, red cedar, substitute products, Russia/China
trade potential, impact of climate change on competitiveness, U.S./
Canadian trade, and impact of Western supply constraints on Southern
forest products markets.
The work supported by this grant began in fiscal year 1992. The
appropriation for fiscal year 1992-1993 was $800,000 each year; fiscal
year 1994, $752,000; and fiscal years 1995-1997, $677,000 each year. A
total of $4,383,000 has been appropriated.
The non-federal funds and sources provided for this grant are as
follows: $716,986 State appropriations, $209,622 product sales,
$114,000 industry, and $661,119 miscellaneous for a total of $1,701,727
in 1991; $727,345 State appropriations, $114,581 product sales,
$299,000 industry, and $347,425 miscellaneous for a total of $1,488,351
in 1992; $1,259,437 State appropriations, $55,089 product sales,
$131,000 industry, and $3,000 miscellaneous for a total of $1,448,526
in 1993; $801,000 State appropriations, $1,055,000 product sales,
$1,040,000 industry, and $244,000 miscellaneous for a total of
$3,140,000 in 1994; $810,000 State appropriations, $42,970 product
sales, $785,000 industry, and a $2,000,000 gift of a ranch due to the
IMPACT Center's research on Wagyu Cattle, for a total of $3,637,870 in
1995; and $844,000 State appropriations, $45,000 product sales,
$900,000 industry, and $45,000 miscellaneous for a total of $1,789,000
in 1996. The preliminary allocation for 1997 is $1,305,000 state
appropriations, $92,000 product sales, $1,000,000 industry, and $85,000
miscellaneous for a total of $2,542,000.
The research program is being carried out by the International
Marketing Program for Agricultural Commodities and Trade at Washington
State University, Pullman, and the Center for International Trade in
Forest Products at the University of Washington, Seattle.
This is a continuing program of research with long-term, crop and
animal improvement projects, and long-term agricultural and forest
products market development projects. As projects are completed, new
projects have begun. Some of the new projects can be completed by 2000,
but some improvement and development projects will take much longer to
reach their full potential. Objectives have been met for certain
products in certain markets, but unmet opportunities abound. With the
exception of the improvement projects, most of the work can be
completed by 2000. Keeping with the Administration's policy of awarding
research grants competitively, no further Federal funding for this
grant is requested.
Projects are evaluated annually through review of progress reports
and periodically through more extensive review. The U.S. Department of
Agriculture reviewed the Washington State University project in 1991.
The University of Washington Center is just completing a formal 5-year
review. The report will be available early in 1997. In addition, the
Center made comprehensive use of a broadly-construed Executive Board
having industry, agency, and academic representation to review
quarterly accomplishment reports and suggest additional activities. The
last formal on-site Departmental review was in 1991, but the Department
reviews the project annually and participates in the quarterly
Executive Board reviews.
cool season legume research
The Cool Season Legume Research Program involves collaborative
research projects to improve efficiency and sustainability of pea,
lentil, chickpea and fava bean cropping systems. Scientists from seven
states where these crops are grown have developed cooperative research
projects directed toward crop improvement, crop protection, crop
management and human nutrition/product development. The principal
researcher believes the original goal of this project was to improve
efficiency and sustainability of cool season food legumes through an
integrated collaborative research program and genetic resistance to
important virus diseases in peas and lentils. Evaluation studies of
biocontrol agents for root disease organisms on peas are underway.
Other studies are evaluating integration of genetic resistance and
chemical control. Considerable progress has been made using
biotechnology to facilitate gene identification and transfer.
Management system studies have addressed tillage and weed control
issues. In view of significant needs for research in high priority
national interest topics such as improved pest management systems,
funds are not proposed to continue this Special Research Grant. At the
discretion of the State, Hatch Act or other funding could be used to
support this research.
The work supported by this grant began in fiscal year 1991 with
appropriations for fiscal year 1991 of $375,000; fiscal year 1992 and
1993, $387,000 per year; fiscal year 1994, $364,000; fiscal year 1995,
$103,000; fiscal years 1996 and 1997, $329,000. A total of $2,274,000
has been appropriated.
The nonfederal funds provided for this grant were as follows:
fiscal year 1991, $304,761 state appropriations, $14,000 industry, and
$18,071 other nonfederal; fiscal year 1992, $364,851 state
appropriations, $15,000 industry, and $14,000 other nonfederal; fiscal
year 1993, $400,191 state appropriations, $19,725 industry, and
$10,063, other nonfederal; and fiscal year 1994, $147,607 nonfederal
support. Nonfederal support for fiscal year 1995 was $150,607 and for
fiscal year 1996 it was $386,887.
Research has been conducted at the Agricultural Experiment Stations
in Idaho, Oregon, Washington, Wisconsin, Minnesota, New York and New
Hampshire. The funds have been awarded competitively among
participating states and not all states receive funds each year. The
projected duration of the initial project was five years. In keeping
with the Administration's policy of awarding research grants
competitively, no further Federal funding for this grant is requested.
Research could be continued at the State's discretion using formula
funds.
The steering committee made up of growers, industry representatives
and scientists, review this project annually for merit and relevance.
Each annual proposal is made up of sub-projects that have been peer
reviewed and selected to address priority issues within each of the
broad objectives. The combined project is reviewed by CSREES before
funds are awarded.
cranberry-blueberry disease and breeding, new jersey
This work has focused on identification and monitoring of insect
pests on blueberries and cranberries, the identification, breeding, and
incorporation of superior germplasm into horticulturally desirable
genotypes, identification and determination of several fungal
fruitrotting species, and identification of root-rot resistant
cranberry genotypes. Overall, research has focused on the attainment of
cultural management methods that are environmentally compatible, while
reducing blueberry and cranberry crop losses. This project involves
diseases having major impacts on New Jersey's cranberry and blueberry
industries, but the findings here are being shared with experts in
Wisconsin, Michigan, and New England. In view of significant needs for
research in high priority national interest topics such as the
Department's pest management initiative, funds are not proposed to
continue this Special Research Grant. At the discretion of the State,
Hatch Act or other funding could be used to support this research.
The original goal was the development of cranberry and blueberry
cultivars compatible with new disease and production management
strategies. Last year, over 75 blueberry selections were moved into
advanced testing, and wild blueberry accessions resistant to secondary
mummy berry infections were identified. The biology and seasonal life
history of spotted fireworm on cranberries was determined. A pheromone
trap-based monitoring system for cranberry fruitworm was developed and
further refined for commercialization in 1997. Blueberry fruit
volatiles attractive to blueberry maggot were identified and tested in
the field. Seven major fungal fruit-rotting species were identified,
and their incidence in 10 major cultivars of blueberry and blueberry
were determined, and it is likely that resistance to fruit rots is
specific to fungal species. Researchers identified about 20 root rot-
resistant cranberry genotypes in an artificially inoculated field
trial.
Grants have been awarded from funds appropriated as follows: fiscal
year 1985, $100,000; fiscal year 1986-1987, $95,000 per year; fiscal
years 1988 and 1989, $260,000 per year; fiscal year 1990, $275,000;
fiscal years 1991-1993, $260,000 per year; fiscal year 1994, $244,000;
and fiscal years 1995-1997, $220,000 each year. A total of $2,769,000
has been appropriated. State and other non-federal sources are
providing funds in the amount of $93,970 for this grant in fiscal year
1997.
This research is being conducted at the New Jersey Agricultural
Experiment Station. The anticipated completion date for the original
objectives was 1995. Those objectives have not been met. To complete
the breeding, disease and insect management and provision of new
management guidelines for extension and crop consultants, it is
estimated that an additional three to nine years will be required.
Keeping with the Administration's policy of awarding research grants
competitively, no further Federal funding for this grant is requested.
The last agency evaluation of this project occurred in December,
1996. In summary, the evaluation stated that the effort has continued
to be highly productive, with various improved management strategies,
plant material and environmentally-balanced pesticides being areas of
major impact.
critical issues
These grant funds support research on critical issues impacting
agriculture that require immediate attention. These funds are intended
to initiate research efforts until other resources can be secured to
address the critical issues. This program started in fiscal year 1996
when one half of our Critical Issues funds were allocated to initiate
research on potato late blight, which is caused by a fungus, a new
strain of which has spread through the nation causing extensive crop
losses. The objective is to have a better understanding of the fungus
to enable scientists to predict and in manage the outbreaks using an
integrated pest management program. The other half of our 1996 Critical
Issues funds were allocated to initiate research on vesicular
stomatitis, a disease of horses, cattle, and swine which has symptoms
very similar to those of food and mouth disease. Livestock producers
are concerned about the potential adverse impact of quarantine measures
as a result of the spread of this disease. The objective is to develop
a better understanding of the disease so more effective control
measures can be used. Both potato late blight and vesicular stomatitis
have national impact of a critical nature and are therefore both very
high priority efforts.
Six research proposals have been funded to address potato late
blight, and scientists have initiated their work on aspects of this
epidemic. The first North American Late Blight Workshop was convened
which involved potato growers and processors, national potato
organizations, university scientists, and the chemical industry. The
major contribution of this workshop was the resulting set of
recommendations for short-and long-term efforts need to solve this
problem, and workshop organizers set up a Internet home page which
invites dialogue on research and education needs for the management of
late blight.
Two research proposals have been funded to address vesicular
stomatitis, which was identified as the highest priority problem in
1996 in discussions with commodity groups, regulatory veterinarians and
colleagues in ARS and APHIS. Work has been initiated under the two
funded projects which are now focusing on transmission of the virus.
$200,000 was appropriated in both fiscal year 1996 and 1997 for a
total appropriation of $400,000 to date.
Potato late blight work is being carried out at Washington State
University, Oregon State University, the University of Idaho, the
University of Wisconsin, and Pennsylvania State University. Vesicular
stomatitis work is being carried out at Colorado State University and
the University of Arizona. The Critical Issues funds are intended to
support the initiation of research on issues requiring immediate
attention until other, longer-term, resources can be secured. The
objectives of the projects supported with these funds are short-term
and are therefore expected to be met within 1-2 years.
All projects were reviewed for scientific merit before funding
decisions were made. Also, scientists whose work on potato late blight
and vesicular stomatitis is supported with Critical Issues funding are
in close contact with CSREES' National Program Leaders so that the
agency is kept abreast of developments as they occur.
dairy and meat goat research, prairie view a&m, texas
The program has addressed a range of issues associated with goat
production. Research by Scientists at the International Dairy Goat
Center, Prairie View A&M University focuses on problems affecting goat
production in the United States. Issues included are the study of
nutritional requirements of goats, disease problems, methods to improve
reproductive efficiency in the doe, the use of gene transfer to improve
caprine genetics and the evaluation of breeding schemes to improve meat
and milk production. Currently, research is in progress to develop an
enterprise budget support program for goat production systems in the
Texas Gulf Coast Region. The principal researcher believes that
nationally, most of the farm enterprises that include goats are diverse
and maintain a relatively small number of animals. Responding to
disease, nutrition, breeding and management problems will improve
efficiency of production and economic returns to the enterprise. In
view of significant needs for research in high priority national
interest topics, funds are not proposed to continue this Special
Research Grant. At the discretion of the State, other funding could be
used to support this research.
The original goal of this research was to conduct research that
will lead to improvement in goat production among the many small
producers in the United States. Research has been conducted to develop
and improve nutritional standards, improve genetic lines for meat and
milk production and to define mechanisms that impede reproductive
efficiency in goats. Current efforts focus on the development of
enterprise budget management tools for goat producers in the Texas gulf
coast region.
Grants have been awarded through appropriated funds as follows:
$100,000 per year for fiscal years 1983-85; $95,000 per year for fiscal
years 1986-88; no funds were appropriated in fiscal year 1989; $74,000
for fiscal year 1990; $75,000 per year for fiscal years 1991--1993;
$70,000 for fiscal year 1994; and $63,000 per year for fiscal years
1995-1997. A total of $1,143,000 has been appropriated. The University
reports no non-federal funds expended on this program.
Research is being conducted at Prairie View A&M University in
Texas, The overall objective of this research is to support the needs
of small farms engaged in the production of meat and milk from goats
along the Texas Gulf Coast. The university researchers continue to
address those needs on an annual basis and anticipate that work
currently in progress will be completed by the end of fiscal year 1998.
Keeping with the Administration's policy of awarding research grants
competitively, no further Federal funding for this grant is requested.
The Dairy/Meat Goat Research grant was last reviewed in June 1996.
The project objectives are within the goals of the program, are within
the mission of both USDA and CSREES, and the institution is well
equipped and qualified to carry out the research project.
delta rural revitalization, mississippi
The project has gone through several phases in the delineation of a
strategy for a long-range development plan for the Mississippi Delta
region. Phase I was completed with the delivery of a baseline
assessment of the economic, social, and political factors that enhance
or impede the advancement of the region. Phase II of the project
evaluated the potential for entrepreneurship and small business
creation as mechanisms to improve economic conditions. Phase III is now
focusing on technical assistance to Delta region manufacturing firms to
strengthen their ability to provide employment and incomes. Continued
emphasis on technical assistance and the development of appropriate
data bases to guide development opportunities. The principal researcher
believes that the databases, technical assistance, and analytical
capability will provide more impact in support of entrepreneurial and
community development activities in the State. The program is conducted
in concert with other University and State agency outreach activities.
In view of significant needs for research in high priority national
interest topics, funds are not proposed to continue this Special
Research Grant. At the discretion of the State, Hatch Act or other
funding could be used to support this research.
The original goal was to develop an analytical baseline for the
Delta region. A publication titled, ``A Social and Economic Portrait of
the Delta,'' serves as an analytical baseline for further work. A Delta
Inventors Society has been created to assist creative individuals in
developing ideas which can be successfully commercialized. An
Entrepreneurial Forum was established to help new business ventures
with start-up advice and assistance. Finally, a venture capital
association has been formed to help both inventors and businessmen find
capital resources to carry out their plans. The emphasis of the project
has now shifted to technical assistance for industrial development.
Grants have been awarded from funds appropriated as follows: fiscal
year 1989, $175,000; fiscal year 1990, $173,000; fiscal year 1991-1993,
$175,000 per year; fiscal year 1994, $164,000; fiscal year 1995-1997,
$148,000 per year. A total of $1,481,000 has been appropriated. Total
non-federal funds directed to this project, as reported by Mississippi
State University, are: fiscal year 1991, $117,866; fiscal year 1992,
$84,402; fiscal year 1993, $68,961. Reports for later years are
incomplete at this time.
Research is being conducted at the Mississippi State University.
The original completion date was September 30, 1990. The original
objectives of the research project have been met. The completion of
additional objectives is scheduled for September 30, 1997. In keeping
with the Administration's policy of awarding research grants
competitively, no further Federal funding for this grant is requested.
Research could be continued at the State's discretion using formula
funds.
The agency evaluates merit of research proposals as submitted. No
formal evaluation of this project has been conducted.
drought mitigation, nebraska
This grant supports the National Drought Mitigation Center program
in the Department of Agricultural Meteorology at the University of
Nebraska. The Center is developing a comprehensive program aimed at
lessening societal vulnerability to drought by promoting and conducting
research on drought mitigation and preparedness technologies, improving
coordination of drought-related activities and actions within and
between levels of government, and assisting in the development,
dissemination, and implementation of appropriate mitigation and
preparedness technologies in the public and private sectors. Emphasis
is directed toward research and outreach projects and mitigation/
management strategies and programs that stress risk minimization
measures rather than reactive actions.
The principal researcher believes drought is a normal part of
climate for virtually all regions of the United States. The impacts of
drought are diverse and affect the economic, environmental, and social
sectors of society. Almost without exception, the occurrence of
widespread severe drought in the past decade has illustrated the
inadequacy of existing assessment, mitigation, response, and planning
efforts at the federal, state, and local level. Rather than the
``crisis management'' approach of the past, a ``risk management''
approach is needed where the emphasis is on preventive measures,
preparedness, education, and mitigation strategies. Until recently,
little attention has been focused on drought among the long list of
natural hazards that affect our nation. The Center is receiving non-
federal funds in support of this research from the University of
Nebraska. In view of the significant needs for research on national
high priority topics, additional funding for this project is not
proposed. At the discretion of the State, Hatch Act or other funding
could be used to support this effort.
The original goal of this research was to create a National Drought
Mitigation Center and develop a comprehensive program aimed at
lessening societal vulnerability to drought. The Center has created an
information clearinghouse for drought mitigation technologies and
associated informational products. This has been accomplished through
the development of a national drought management information system, an
electronic portfolio of information available on the Internet. About
16,000 users each month connect to the National Drought Mitigation
Center's home page to gather information on drought conditions and
management strategies. This home page was used extensively by state and
federal agencies during the 1996 drought to assist in the evaluation
and response process. This home page networks potential users of
drought-related information in the United States and elsewhere with
information that would otherwise be unavailable or inaccessible to
users.
The National Drought Mitigation Center played an important role in
the response of federal and state government to the 1996 severe drought
in the Southwest and southern Great Plains states. The Center
participated in the Multi-state Drought Task Force workshop organized
at the request of President Clinton and help formulate long-term
recommendations to improve the way this nation prepares for and
responds to drought. The Center was also a member of the Western
Governors' Association's Drought Task Force. This task force has also
developed recommendations to reduce the risks associated with the
occurrence of drought in the western United States. The Center is
actively involved with the Western Governors' Association in the
implementation of these recommendations.
The work supported by this grant received an appropriation of
$200,000 in fiscal years 1995 through 1997, for a total appropriation
of $600,000, The University of Nebraska contributed $75,737 of non-
federal funds in support of this research in fiscal year 1995 and
$58,977 in fiscal year 1996. The University of Nebraska will contribute
$61,545 in fiscal year 1997.
The research will be conducted at the University of Nebraska-
Lincoln. The research conducted under this project is being undertaken
under a series of 10 tasks that have been addressed, but these
activities are ongoing. The national drought management information
system has been established but much of this work is continuing in
order to expand the information available through the clearinghouse and
to keep it current. For example, the drought watch section of the
Center's home page is updated monthly to provide users with up-to-date
information on water and climate conditions nationwide. Keeping with
the Administration's policy of awarding research grants competitively,
no further Federal funding for this grant is requested.
The activities of the Center are continuously evaluated by users
that have access to the home page. They provide feedback and
suggestions on a continuous basis. The Center also solicits input on
its program and products at workshops and other meetings in which it
participates. The Center has established a national advisory committee
that consists of three representatives: on from state government, one
from federal government, and one from a regional organization. These
committee members are well known for their expertise in drought
management. The purpose of this committee is to provide feedback to the
Center on existing products and program direction. This national
advisory committee met twice during 1996 to advise the director and
staff.
environmental research, new york
The environmental research in New York consists of two main thrusts
which are aimed at understanding the nitrogen flowing from agricultural
activities and their impacts on adjacent ecosystem components, and the
agricultural dimensions of global climate change. Included in the
program are a technology transfer aspect and an environmental
assessment activity. The principal researcher believes there is a need
to understand the impacts of ecosystem components upon each other. As
global change occurs, impacts will become critical. In view of the
significant need for research on national, high priority topic areas,
such as integrated pest management, funding for this project is not
proposed. At the discretion of the State, Hatch Act or other funding
could be used to support this effort.
The main objectives of this program are to identify and address
interactions and feedbacks between agricultural ecosystems, natural
ecosystems, and natural resources which affect the long-term well being
of each. Agroecosystem management strategies that maintain agricultural
productivity and environmental quality will be devised. Policies will
be established for addressing problems at the interface between
agriculture and the environment. Ongoing program activities are
intended to meet the mentioned objectives. Some examples of projects
are as follows: Several aspects of nitrogen supply interactions with
crops and the recovery of fertilizer nitrogen at crop harvest. Water
quality research has been focused on the relation of intensive animal
production areas and contamination caused by nitrates. Geographic
Information System capability is being developed to evaluate various
scenarios regarding the future of agriculture in broad landscape
changes.
In the sixth year of the program, the principal investigators
propose to substantially complete research on the two main themes of
their program to date, namely nitrogen flows from agricultural
ecosystems to non-agricultural ecosystems and groundwater. A new
project on carbon storage in soils will be added to continuing work on
climate. Continuation of their involvement with the Remington Farms
Sustainable Agriculture Project on the Eastern Shore of Maryland will
extend the results of their nitrogen research programs to other farms.
They will also continue two projects that focus on intervention
strategies to improve management of agricultural systems; one will
explore the potential for reducing herbicide use by using weather
forecasts to predict weed competition, and the second will explore the
use of constructed wetlands to off-set barnyard run-off. The principal
investigators will expand their activities in watershed management by
increasing support to the program that was begun last year.
The work supported by this grant began in fiscal year 1991 with an
appropriation of $297,000. The fiscal years 1992-1993 appropriation was
$575,000 per year; $540,000 in fiscal year 1994; and fiscal years 1995
through 1997, $486,000 each year. A total of $3,445,000 has been
appropriated.
In fiscal year 1991, Cornell University provided $27,893 and the
State of New York provided $118,014. In fiscal year 1992, Cornell
University provided $37,476 and the State of New York $188,915. In
fiscal year 1993, Cornell University provided $13,650 and the State of
New York $243,251. In fiscal year 1994, the State of New York provided
$214,989. In fiscal year 1995, the State of New York provided $233,085.
In fiscal year 1996, the State of New York provided $388,301.
This research is being conducted at Cornell University. The
original estimate was for a five-year program and many of the initial
objectives in the nitrogen and climate change areas have been met. New
objectives evolved from the original work and the program was also
oriented to consider broader dimensions of environmental management,
particularly strategies for community-based watershed management,
involving linkage of technical knowledge with social and local
governmental perspectives and needs. Estimated completion dates for
current program elements are:
1997-1998 program year:
Impacts of Nhx deposition on forests
Landscape evaluation of denitrification
Nitrogen utilization in agricultural ecosystems
Contributions of agricultural ecosystems to climate forcing
1998-1999 program year:
Nutrient processing in wetlands
Use of weather forecasts in weed management
Use of constructed wetlands to remediate barnyard run-off
Effect of climate variability on crop production
Carbon storage in soils
Completion beyond 1999:
Watershed science and management
Effects of elevated CO2 on crop yield potential
Remington farms sustainable ag. project (a 10-year project)
Keeping with the Administration's policy of awarding research
grants competitively, no further Federal funding for this grant is
requested.
The agency evaluates this project through the review of an annual
proposal submission.
environmental risk factors/cancer, new york
The Cooperative State Research, Education, and Extension Service
has requested the university to submit a grant proposal that is
currently being reviewed. The American Cancer Society has estimated
that over 184,000 women in the United States will be diagnosed with
breast cancer in 1996. The role of environmental risk factors, such as
pesticides, is of concern to women, the agricultural community, and
policymakers. While some data exist in the scientific literature,
little has been done to synthesize and evaluate these studies and make
this research information available to the people who need it--the
general public. This project, emphasizing risk reduction prevention
information, will work at filling that void. However, in view of the
significant needs for research on national high priority topics, such
as integrated pest management, funding for this project is not
proposed. At the discretion of the State, Hatch Act or other funding
could be used to support this effort.
The original goals of this research are:
1. To establish a database of critical evaluations on the current
scientific evidence of breast carcinogenicity and effects on breast
cancer risk for selected pesticides.
2. To effectively communicate database information to the
scientific community, federal agencies, public health professionals,
the agricultural community, and the general public using innovative
electronic methods of communication, in-service training sessions, and
printed materials.
3. To further develop the Breast Cancer Environmental Risk Factors
World Wide Web to improve ease of use, add informational materials and
hyperlinks, and determine the feasibility of developing an online,
searchable bibliography on pesticides and breast cancer risk accessible
through this Web site.
The work supported by this grant is scheduled to begin in fiscal
year 1997. The appropriation requested for fiscal year 1997 is
$100,000. The non-federal funds and sources provided for this grant
were as follows: $150,000 state appropriations for fiscal year 1996;
$250,000 in state funds (New York) has been requested for fiscal year
1997.
This research will be conducted at the Cornell University, Ithaca,
New York. This is a new project--not yet funded--scheduled to begin in
April 1997. The anticipated completion date is March 31, 1998. Keeping
with the Administration's policy of awarding research grants
competitively, no further Federal funding for this grant is requested.
As a new project, an evaluation has not been conducted, although
the proposal is currently under review. Periodic progress reports are
made throughout the year. A final evaluation will be made after March
31, 1998.
expanded wheat pasture, oklahoma
This project was designed to develop improved supplementation
programs and new systems for technology delivery to reduce production
risk of raising cattle on wheat pasture. The work involves evaluation
of grazing termination date on grain and beef production, assess the
impact of wheat cultural practices and develop an economic model to
evaluate alternative decisions on grain/beef production. Additional
effort is directed toward development of cool season perennial forage
grasses to complement wheat pasture. The proposal for fiscal year 1996
has been received and is being processed. The principal researcher
believes that this work addresses the needs of wheat/cattle producers
of Oklahoma as a primary focus. However, it would appear to have some
application regionally in adjacent states. In view of significant needs
for research in high priority national interest topics such as improved
pest management systems, funds are not proposed to continue this
Special Research Grant. At the discretion of the State, Hatch Act or
other funding could be used to support this research. The principal
researcher suggests the research will indicate mutual benefit to wheat
grower and livestock producer.
The original goal of this research was to develop economically
viable management systems for use of wheat for supplemental pasture for
beef cattle before the crop starts making grain. This work has already
shown how the use of feed supplements can increase net profit from
cattle grazing on wheat pasture. The study has identified management
practices, e.g. date of planting, cultivar selection, grazing intensity
and date of cattle removal that produce the optimum grain yield and
cattle gain. A Wheat/Stocker Management Model has been developed as a
decision aid to help producers assess income risk in the operation.
Work is underway on a Wheat Grazing Systems simulation model.
The work supported by this grant began in fiscal year 1989 and
appropriations were as follows: fiscal year 1989, $400,000; fiscal year
1990, $148,000; fiscal year 1991, $275,000; fiscal years 1992-1993,
$337,000 per year; fiscal year 1994, $317,000, and fiscal years 1995-
1997, $285,000 each year. A total of $2,669,000 has been appropriated.
The nonfederal funds and sources provided for this grant were as
follows: $175,796 state appropriations in 1991; $174,074 state
appropriations in 1992; and $236,584 state appropriations in 1993. The
non-federal support for 1994 was $238,058 for state appropriations.
Funds for fiscal year 1995 were $275,426, and for 1996 were $120,000.
The research is being done at Oklahoma State University. This
project started in 1989 with a projection of 10 years to complete the
research objectives. Some objectives are nearing completion while
others will probably require further study. A number of wheat cultivars
have been identified which will tolerate grazing and still produce
economic grain yields. The grazing cut off date for grain production
has been established. However year to year variation need additional
study in order to develop a reliable decision support system. In
keeping with the Administration's policy of awarding research grants
competitively, no further Federal funding for this grant is requested.
Research could be continued at the State's discretion using formula
funds.
This program has not been subjected to a comprehensive review.
However, each year's funding cycle is reviewed internally and by CSREES
scientist for scientific merit and relevance.
expert ipm decision support system
A prototype information and decision support system was developed
in collaboration with Purdue University and the Department of Energy's
Argonne National Laboratory that integrates and manages information
from multiple data sources. Information on the status of, EPA review of
pesticides, losses caused by pests, status of alternative tactics,
status of minor use registrations, current research in progress, and
priorities of IPM implementation teams are integrated in the Pest
Management Information Decision Support System (PMI/DSS). Information
on the genetic resistance of pests has been planned with Michigan State
University but the resources to implement the plan have not been
available to date. With the information in the current data base,
commodity/pest problems are prioritized using a science-based logic
developed by Argonne National Laboratory personnel based on key policy
concerns. The need for decision support and information is greater than
in the past with the passage of the Food Quality Protection Act [FQPA]
of 1996. The act requires the Environmental Protection Agency (EPA) to
place greater reliance on science, dietary exposure to pesticides,
reasonable risks, and emphasis on children's diets and exposure. The
Act also recognizes IPM as helping to provide workable solutions to
pest problems. The decision support system is incorporating increased
information to address these needs. The data fields and sources of the
data bases that will contribute to additional information are: Risk
Assessments (EPA), Registered Alternatives by Commodities for
Pesticides Under EPA Review (EPA Registration Tapes), Critical Pest
Problems with Removal of Suspect Pesticides (State IPM Teams and NAPIAP
State Liaison Coordinators; Commodity Groups), State Crop Production
(U.S. Census), Pesticide Tolerances on Commodities (EPA Data Bases),
Market Basket Residues on Commodities (AMS and EPA Analyses), Dietary
Habits of Adults and Children (1977 data base, and data bases to be
developed), Method of Use and Reduction of Risk (State IPM Teams and
NAPIAP State Liaison Coordinators; Commodity Groups), IPM Dependence
(State IPM Team Data Bases).
The PMI/DSS serves national, regional, and local needs for research
and extension activities. At the national level, the system supports
the USDA/USEPA Memorandum of Understanding (MOU) to find alternatives
to pesticides under regulatory review or being lost due to genetic
resistance. The data base has identified priorities for the Pest
Management Alternatives request for proposals for the past two years
and interacts with the project system of the IR-4 Minor Use
Registration Program. It also is interacting with the identification of
priorities for research and extension activities in the regional IPM
Special Grant and Special Projects. It provides a mechanism for growers
and grower organizations to interact with the priority process and the
ultimate result is to help insure that farmers have alternatives for
managing pests at the specific local level.
The goal of the PMI/DSS is to refine the process to identify IPM
needs of USDA, EPA, and states by addressing critical needs, reinforce
state and federal partnerships to disseminate important pest management
information for improved decision making, profitability, and
environmental quality, and to address future applications and needs. In
1996 and 1997, the program addressed priority commodity pest management
needs due to voluntary pesticide cancellations and regulatory
cancellations responding to the MOU and supplemental MOU between EPA
and USDA, The supplemental MOU was signed in April, 1996, at which time
there were 58 pesticides and 374 uses identified and prioritized. The
process included information on cancellations furnished by EPA,
selected uses were sent to the states NAPIAP and IPM network and
impacts of cancellations effecting individual state agriculture
reported back for compilation in the decision support system. The
results were used in the 1996 and 1997 request for proposals for the
Pest Management Alternatives Program. Twenty-five minor commodities on
which 40 specific pest were identified in the 1997 request for
proposals. This was the first time that we have identified specific
commodity/pest combinations for which proposals were limited. Results
were also used by the regional IPM request for proposals. As previously
stated, the program is currently addressing issues associated with the
FQPA which increases the information requirements significantly.
In fiscal year 1994, we expended $40,000 of CSREES administrative
funds and $90,000 from Science and Education Evaluation Funds to
initiate collaborative work with the Argonne National Laboratory. In
fiscal year 1995, we expended $172,000 as a Cooperative Agreement with
Purdue University and Argonne National Laboratory from the Pest
Management Alternative Special Grant Funds and $5,000 from NAPIAP
funds. In fiscal year 1996, we expended $177,000 in a cooperative
agreement with Purdue University and Argonne National Laboratory from
Pest Management Alternative Special Grant Funds, $21,000 from Research,
Extension, and Education Evaluation Funds, and $40,000 from NAPIAP
funds (for development of NAPIAP data fields). In fiscal year 1997, we
are expending $165,425 to Purdue University and Argonne National
Laboratory. The total resources to date are $710,425.
It is difficult for us to estimate the amount of non-federal funds
supporting the Pest Management Information, Decision Support System.
Purdue University and Cornell University have contributed non federal
resources to the oversight of the information, decision support system
as well as a number of states that have provided information that is
part of the information base. Many program areas are contributing data
bases that are run on the Pest Management Information, Decision Support
System.
The bulk of the work is carried out in Washington, D.C. CSREES has
National Program Leaders in IPM, NAPIAP, and IR-4 program areas working
on the Pest Management Information, Decision Support System. The
Argonne National Laboratory has a Washington, D.C. office where
information, decision support personnel are housed and there are daily
interactions between CSREES and other USDA staff personnel on a daily
basis. Interactions and information is provided by every state in our
system. We are in the process of institutionalizing this program by
hiring and assigning dedicated staff to this area.
Our original estimate was two-to-three years with adequate
resources to complete the developmental work. However, the design
considerations become more complex as program needs dictate expansion
of the information base such as the developments under FQPA. In
addition, the technology is moving so swiftly that we must continue to
do updating. We feel we are reasonably meeting our objectives with
resources that are available. As indicated, we are institutionalizing
this activity and it will become an ongoing activity of the agency of
increasing importance.
We have a guidance committee that gives us input on an ongoing
basis. We conduct an annual evaluation of this progress in this
program. A specific technical evaluation was made of the Toulmin-based
logic which is policy-question driven that under lines the design and
decision support process in fiscal year 1996. It was concluded that
this science-based logic has significant relevance to decision making
in agricultural pest management systems. We are currently developing
plans for an intensive outside review of the system and proposed
directions involving personnel in participating program areas, research
and extension partners, and grower organizations. The review includes
World Wide Web activities and evaluation input from a wide community of
users and potential users.
farm and rural business finance, illinois and arkansas
The long-range plan of work for this program focuses on three
principal areas. One is the financial management and performance of
rural businesses which includes on-going research into financial
management and decisionmaking by farm and agribusiness firms
complemented by evaluation of the performance of existing firms and
training programs for farm and rural business owners. The second area
includes research on financial markets and credit institutions serving
rural America with emphasis on pricing and credit evaluation of loans,
evaluation of credit relationships, identification of key factors
affecting the supply and demand for financial capital, and evaluation
of financial innovations for farm and rural business finance. The third
area addresses the impact of public policies and programs on the
financial health of rural America, measures the effect of regulatory
changes on the performance of financial institutions, evaluates
organizational alternatives for rural credit markets and analyzes the
effects of geographical liberalization of commercial banking on
structure and performance. The principal researcher believes
traditional characteristics of agriculture such as capital intensive
businesses, variable prices and production and seasonality present
unique risks with important implications for the cost and availability
of financial capital for farm and rural businesses. In the present
uncertain policy and budget environment, identification of new sources
of financial capital and innovative programs are essential to enhance
the financial capacity for undertaking rural development programs and
responding to growth opportunities in rural businesses. In view of
significant needs for research in high priority national interest
topics, funds are not proposed to continue this Special Research Grant.
At the discretion of the State, Hatch Act or other funding could be
used to support this research.
The goal is to assist farmers and rural businesses with research-
based information on financial management as they deal with changing
and increasingly complex financial markets. The program has completed
projects on the financial structure and efficiency of grain farms, risk
and financial implications of vertical coordination in hog production,
commercial bank access to agency market funds through government
sponsored enterprises, and competitive challenges for bankers in
financing agriculture. Additional projects in various stages of
completion include investigate the financial implications of property
tax reform at the State level and investment options for farmers and
businesses during high income periods. Other projects weigh regulatory
costs in rural lending, conduct statistical analysis of Chapter 12
bankruptcy filing data, and identify determinants of the type and terms
of leases used in agriculture.
The work has been underway since 1992. Appropriations were $125,000
in fiscal year 1992, $125,000 in fiscal year 1993, $118,000 in fiscal
year 1994, and $106,000 in fiscal year 1995 through fiscal year 1997.
Appropriations through fiscal year 1997 total $686,000.
The non-federal sources and funds provided for this program in
fiscal year 1992 totaled $259,427 with $58,427 in State appropriations,
$189,000 from industry and $12,000 from miscellaneous sources. In
fiscal year 1993, the total was $287,890 with $94,588 in State
appropriations, $133,000 from industry and $25,000 from miscellaneous
sources. In fiscal year 1994, the total was $$391,000 with $221,000
coming from State appropriations, $45,000 from industry and $125,000
from miscellaneous sources. In fiscal year 1995 the total was $185,000
where $46,000 came from State appropriations, $62,500 from industry and
$76,500 from miscellaneous sources. In fiscal year 1996, the total was
$344,000 where $294,000 was appropriated from State sources and $50,000
from private sources. In fiscal year 1997, $177,000 is being
appropriated from State sources.
The work is being carried out at the University of Illinois and
University of Arkansas. The original objectives of the program were
amended with additional funding and new termination dates which now
extend to fiscal year 1998. While many of the objectives have been met,
the principal researcher believes that new dimensions of the originally
proposed objectives need to be addressed as a result of changing
conditions and new financial environments. Anticipated completion date
of these related objectives will extend into fiscal year 1998. In
keeping with the Administration's policy of awarding research grants
competitively, no further Federal funding is requested for this grant.
Research could be continued at the State's discretion using formula
funds.
The project is evaluated with the submission of the annual proposal
and as progress reports are received. The program has supported
projects which cover topics involving farm and rural business finance.
During this past year, the projects have been responsive to the
changing policy and financial risk environment including the
examination of financial impacts of vertical coordination in the
livestock industry and impacts of structural change within the rural
finance sector. Evaluation of the program considers methodologies used
to conduct specific projects, the impact the projects have on current
issues, and products resulting from the projects.
floriculture, hawaii
The research carried out with these funds involves wholesale and
retail US and Japan market research, development of new varieties for
aesthetic values and pest resistance, and pest and disease management
strategies to meet quarantine needs and consumer expectations. The
researcher believes the tropical cut flower and foliage industry in
Hawaii, which includes antilurium, orchids, flowering gingers, bird of
paradise, heliconia, protea, and cut foliage--ti leaves and other
greens--is worth over $50 million primarily in out-of-state sales.
Development of disease resistant cultivars and quarantine pest and
disease management strategies which reduced pesticide usage are
included in the national high priority improved pest management
systems. In view of significant needs for research in high priority
national interest topics such as improved pest management systems,
funds are not proposed to continue this Special Research Grant. At the
discretion of the State, Hatch Act or other funding could be used to
support this research.
The original goal of the research was to develop superior Hawaii
anthuriums, orchids, prolea, and exotic tropical flower varieties with
disease resistance, particularly to anthurium blight which devastated
the Hawaii anthurium industry through the mid-1980's and reduced
Hawaii's market share. Additionally, research focused on development of
post-harvest handling practices and quarantine pest control. To date, a
new anthurium cultivar has been patented and released. Additional
blight resistant cultivars are being propagated and tested by the
anthurium industry. Disease resistant protea germplasm has been
obtained from South Africa and is being used in the protea breeding
program. A post-harvest hot water dip treatment has been developed and
is being used commercially on tolerant cutflower species to meet
quarantine requirements.
Grants have been awarded from funds appropriated as follows: fiscal
year 1989, $300,000; fiscal years 1990-1993, $296,000 per year; fiscal
year 1994, $278,000; and fiscal years 1995-1997, $250,000 each year. A
total of $2,512,000 has been appropriated. The non-federal funds and
sources provided for this grant were as follows: State appropriations
of $87,937 in 1995 and $87,937 in 1996.
Research is being conducted by the University of Hawaii at Manoa
and Hilo. The objectives in the original project were to maintain
Hawaii floricultural industry competitive. This objective continues to
be the principal direction for the projects. Because the industry and
the markets are changing, pests are becoming either resistant or newer
strains, and quarantines are changing with technology the objective
remains valid. Keeping with the Administration's policy of awarding
research grants competitively, no further Federal funding for this
grant is requested. Research could be continued at the state's
discretion using other funds.
The individual projects funded under this Special Research Grant
are evaluated through merit review to ensure that good science is being
used. This evaluation is the major tool used to award funds to the
projects.
food and agriculture policy institute, iowa and missouri
The Food and Agriculture Policy Research Institute (FAPRI) was
established by Iowa Stale University and the University of Missouri,
Columbia, in 1984. The purpose of the institute is to conduct
comprehensive analyses and disseminate results about the economic
impacts of U.S. food, farm, and trade policies to agricultural
producers, agribusinessmen, and public policymakers. Iowa State
conducts research on the economic interrelationships within and between
domestic and foreign food and agricultural markets from the farm gate
to market destinations; develops and maintains databases and analytical
support systems to facilitate the analysis of agricultural and trade
policy issues; and evaluates the impacts of U.S. and foreign commodity
supply, demand, and public policy programs on agricultural trade. The
University of Missouri maintains models of the domestic agricultural
economy and directs its efforts primarily to the analysis of domestic
policy issues. The two universities maintain linkages with a number of
other universities who provide data and analytical support to the
system. The universities maintain a comprehensive analytical modeling
system of the U.S. and international food and agricultural sectors to
evaluate near-and long-term economic implications of alternative farm
policies for the basic commodities. The system is capable of providing
economic information on potential impacts out to 10 years in the future
of farm policies on farm prices, income, output, government program
costs and means to enhance the management of farm programs at the
national level.
The Nation's agricultural sector and its components are subject to
numerous Federal policies and programs. FAPRI is the only publicly
supported, non-federal organization with the analytical capability to
assess and evaluate the numerous public policies and programs affecting
the agricultural sector and report results to a broad constituency
including farmers, agribusinessmen, and Federal and State policymakers.
However, in view of significant needs for research in high priority
national interest topics such as improved pest management systems,
funds are not proposed to continue this Special Research Grant. At the
discretion of the State, Hatch Act or other formula funding could be
used to support this research.
The original goal was to develop the analytical capability to
assess farm policies on the U.S. agricultural sector and disseminate
this information to farmers, agribusinessmen, and public policymakers.
The mission has been expanded to include assessment of trade and
environmental policy impacts and their interaction with the
agricultural sector at national, regional, and farm levels. The models
in place are also used to assess fiscal and monetary policy
implications and impacts of new technologies such as biotechnological
innovations on the agricultural sector. Both institutions maintain
large econometric models and data sets which are regularly updated to
analyze farm and trade policy alternatives and the impacts of various
programs on the several sub sectors of the agricultural economy. During
the past year, the FAPRI completed over 45 studies addressing policy
issues such as assessments of the 1996 Farm Bill and alternative ways
of implementing its provisions. Numerous studies were completed
addressing improvements made to the empirical modeling system to
improve domestic and international policy capabilities. The FAPRI
professionals made numerous public appearances throughout the U.S. to
agricultural groups and Congressional committees and Executive branch
groups addressing policy issues. New thrusts include development of two
new baselines to complement the existing agricultural baseline used for
agricultural policy analysis. These are the resource and environmental
baseline and the food-nutrition-health baseline. Completion and
incorporation of these baselines into the existing model framework will
provide an integrated procedure to assess environmental and health
policies on the agricultural and food sectors and implications of
agricultural policies on the environment and public health.
Grants have been awarded from funds appropriated as follows: fiscal
years 1984-1985, $450,000 per year; fiscal years 1986-1987, $357,000
per year; fiscal year 1988, $425,000; fiscal year 1989, $463,000;
fiscal year 1990, $714,000; fiscal years 1991-1993, $750,000 per year;
fiscal year 1994, $705,000; fiscal years 1995-1996, $850,000 each year,
and fiscal year 1997, $80,000. The total amount appropriated is
$8,671,000.
The non-federal funds and sources provided for this grant are as
follows: $260,355 State appropriations, $113,565 industry, and $37,913
miscellaneous for a total of $411,833 in fiscal year, 1991; $321,074
State appropriations, $51,500 industry, and $35,100 miscellaneous for a
total. of $407,674 in fiscal year 1992; $234,796 State appropriations
and $70,378 industry for a total of $305,174 in fiscal year 1993;
$78,286 State appropriations, $43,925 industry, and $29,750
miscellaneous in fiscal year 1994 for a total of $151,961; $80,155
State appropriations, $37,128 industry, and $42,236 miscellaneous for a
total of $159,519 for fiscal year 1995; $124,123 in State
appropriations with no other funding for fiscal year 1996; and $79,000
in State appropriations, $50,000 industry and $25,000 miscellaneous for
a total of $154,000 in fiscal year 1997.
The program is carried out at the Center for Agriculture and Rural
Development, Iowa State University and the Center for National Food and
Agricultural Policy, University of Missouri. This is a continuing
program of research and analysis for the purpose of assessing farm and
related policy actions and proposed actions likely to affect the
agricultural sector and its components. However, in keeping with the
Administration's policy of awarding research grants competitively, no
further Federal funding is requested for this grant.
We have conducted no formal evaluation of this program. However,
the project proposal is carefully reviewed for adherence to stated
objectives and annual progress.
food irradiation, iowa
Since the Linear Accelerator Facility was placed in operation in
March 1993, studies on the effect of irradiation on shelf-life
extension, safety and quality of ground beef, beef steaks, ham, pork
chops from loins, chicken breasts, and turkey have been conducted.
Studies combining irradiation with high hydrostatic pressure and
cooking, using whole chicken breasts, turkey and ham, have been
conducted to determine the combination of these treatments that will
yield a shelf-stable product while maintaining high eating quality.
Several studies were conducted to determine whether consumers can
detect a difference between irradiated and nonirradiated ground beef
patties. Experiments were also conducted to investigate consumer
acceptance of pork products irradiated to prevent trichinosis. Test
markets of irradiated chicken breasts were conducted to determine
consumers' willingness to pay for irradiated products. The principal
researcher believes consumers' attention and concern about the safety
of fresh meat and poultry has increased with recent outbreaks of
foodborne illness from E. coli 0157:H7. The meat industry has also
expressed interest regarding the quality of irradiated products, and
how this process can be used to yield high quality fresh meats that are
free of pathogens. With the recent outbreak of illness of thousands of
Japanese due to E. coli 0157:H7 and the subsequent drastic reduction of
U.S. beef exports to Japan, irradiation of beef could have significant
economic impact on the nation's export of this high value product.
Additionally, researchers from eight other research institutes have
used the irradiation facility for research projects. In view of
significant needs for research in high priority national interest
topics such as improved pest management systems and food safety, funds
are not proposed to continue this Special Research Grant. At the
discretion of the State, Hatch or other funding could be used to
support this research.
The original goal of the research was to generate knowledge
necessary to develop a research and technology transfer program leading
to commercial use of irradiation of foods, whereby consumers would be
provided with food products with enhanced safety. The effectiveness of
irradiation, using an electron beam accelerator, in destroying known
pathogenic bacteria in pork and beef has been determined. Mathematical
models have been developed to predict the growth of bacteria in low-
dose irradiated ground pork. Demonstration of irradiation technology
has been presented to some commercial firms, and plans are being
developed for some large scale test markets.
The work supported by this grant began in fiscal year 1991 when
$100,000 was appropriated for this project. The appropriations for
fiscal years 1992 and 1993 were $237,000 per year; fiscal year 1994,
$223,000; and fiscal years 1995-1997, $201,000 each year. A total of
$1,400,000 has been appropriated.
The project received $1,037,270 in State of Iowa funds--$1 million
of which was for capital construction--in fiscal year 1991; $37,942 in
state funds and $67,800 in industry grants in fiscal year 1992; $68,897
in state funds, $78,300 in industry grants and $9,666 in user fees in
fiscal year 1993; $70,652 in state funds, $35,420 in industry grants
and $47,788 in user fees in fiscal year 1994; and $72,772 in state
funds, $100,000 in industry grants and $55,211 in user fees in fiscal
year 1995; and $81,540 in state funds, $115,300 in industry grants.
Research is being conducted at Iowa State University. The principal
investigator anticipates that the project will continue through June
1998. Since irradiation continues to be viewed skeptically by many non-
scientists as a tool for improving shelf-life and preserving food, and
because optimal dose and use parameters are still being defined,
additional research will be needed to move this technology to broader
consumer acceptance and industry use to enhance safety of food
products. Until irradiation of red meat is approved by the Food and
Drug Administration, research on the factors affecting the quality of
irradiated red meat will be primarily conducted using the Iowa State
University facility. Keeping with the Administration's policy of
awarding research grants competitively, no further Federal funding for
this grant is requested. Research could be continued at the State's
discretion using formula funds.
An agency science specialist conducts a merit review of the
proposal submitted in support of the appropriation on an annual basis.
A review of the proposal was conducted on December 20, 1996. Previous
studies funded under this project have provided useful information
toward understanding how irradiation can be useful in eliminating or
reducing foodborne pathogens in meat products. It is anticipated that
the proposed research will continue to further the understanding of how
irradiation can be used to improve shelf-life and enhance safety of
meats and meat products.
food marketing policy center, connecticut
The Food Marketing Policy Center was established in 1988 at the
University of Connecticut at Storrs. The Center conducts
interdisciplinary research on food and agricultural marketing and
related public policy issues that influence economic performance of the
food marketing system. The Center studies how public policies and
private sector organization and strategies affect food industry
competitiveness and the delivery of food and services, their costs,
prices, and safety. The Center works closely with the University of
Massachusetts to carry out the research program. The research proposal
identifies an ongoing national need to continually improve the economic
efficiency and operation of the U.S. food marketing system to benefit
farmers, merchants, and consumers. In view of significant needs for
research in high priority national interest topics such as improved
pest management systems and food safely, funds are not proposed to
continue this Special Research Grant. At the discretion of the State,
Hatch Act or other funding could be used to support this research.
The ongoing research goal is to identify marketing problems and
assess alternatives that improve economic performance of the U.S.
agricultural and food marketing sector. The Center conducts research in
conjunction with the Hatch regional research project NE-165, ``Private
Strategies, Public Policies and Food System Performance.'' The Center
performs studies on food marketing, including a description of food
quality issues and enhancement policies; private label food brands;
advertising strategies of agricultural cooperatives; assessment of food
retailing mergers and competition; and evaluation of state dairy
regulations, branded product marketing strategies, supermarket chain
entry, oligopsony in agricultural markets, and the impact of
agricultural cooperatives on food processor market performance. The
Center develops analytical methods to assess market performance. It has
sponsored workshops on industrial organization issues. Food safety
economic issues are addressed in two books and at workshops that
summarize research done at the center and the regional research
project.
This grant will be used to support research on 12 projects with
research targeted at three problem areas. They are factors shaping
decisions by food firms and the consequent effects; impact assessment
of public intervention on firm food safety and quality strategies; and
analysis of public policies affecting competition in food markets.
Projects include analyses of the effects of trade agreements on food
quality and trade in food products; an assessment of the efficiency
aspects of ex ante versus ex post approaches to food safety problems;
firm strategic responses to food safety and nutrition regulation and
effects on competition, market structure and food price levels;
demographic patterns of food borne illness for high risk populations;
market structure on food advertising activity; competitive strategies
of cooperatives; basic research on oligopoly theory; and publication of
new data sets on the food industry.
Grants have been awarded from funds appropriated as follows: fiscal
year 1988, $150,000; fiscal year 1989, $285,000; fiscal year 1990,
$373,000; fiscal years 1991-1993, $393,000 per year; fiscal year 1994,
$369,000; and fiscal year 1995 through 1997, $332,000 each year. A
total of $3,352.00 has been appropriated. The non-federal funds and
sources provided for this grant are State appropriations as follows:
$234,259 in fiscal year 1991; $231,741 in fiscal year 1992; $201,288 in
fiscal year 1993; $234,557 in fiscal year 1994; $219,380 in fiscal year
1995; and $134,399 in fiscal year 1996.
The research is being carried out by the Connecticut Agricultural
Experiment Station at Storrs and at the University of Massachusetts.
The original proposal in 1987 was for 24 months. The objective of
conducting policy-oriented research on food manufacturing and
distribution industries to assist state and Federal policy decision
makers in improving the performance of the food system is still an
ongoing public concern, given increasing levels of concentration in
food processing according to the principal researcher. The current
phase, as funded in fiscal year 1997, will be completed in 2001.
However, in keeping with the Administration's policy of awarding
research grants competitively, no further Federal funding is requested
for this grant. Research could be continued at the state's discretion
using formula funds.
CSREES annually reviews project reports, succeeding annual project
proposals, research studies and educational programs.
food processing center, nebraska
The University of Nebraska Food Processing Center has been
conducting short-term, highly applied research projects to assist small
and mid-sized food processing companies and entrepreneurs to develop or
improve processes and products and to develop new food processing
enterprises. Projects were selected based on the estimated economic
impact of the technical assistance or the criticality of the technical
assistance to the future of the firm or venture. Priorities were placed
on projects relating to the safety of the food product or process and
to the fulfillment of regulatory mandates such as nutrition labeling,
use of approved and effective ingredients, and adherence to regulations
imposed by foreign governments. In addition, several research projects
were conducted to improve or assess the quality, extend the shelf-life,
or assess or improve the processing efficiency of specialty food
products which impacted several processors or used alternative
agricultural products. The principal researcher believes the primary
impact of this project will be statewide. Small and mid-sized food
processing companies and entrepreneurs have limited technological
capabilities for addressing issues related to product development,
process development, product and process evaluation, food safety,
quality assurance, and regulatory mandates. The short-term research and
technology transfer projects conducted as part of this overall project
will aid these companies in appropriately addressing these oftentimes
complicated issues. In view of significant needs for research in high
priority national interest topics such as improved pest management
systems and food safety, funds are not proposed to continue this
Special Research Grant. At the discretion of the State, Hatch Act or
other funding could be used to support this research.
The goal of the research, as stated previously, is to assist small
and mid-sized food processing companies and entrepreneurs to develop or
improve processes and products and to develop new food processing
enterprises. Technological evaluations were conducted for 210
individuals or companies interested in developing new food processing
businesses. These evaluations included formulations, processes,
processing equipment, packaging, shelf-life, sensory, nutritional
attributes, microbiological quality, regulatory considerations, and
other factors. Additionally, microbiological analyses, shelf-life
assessments, sanitation audits, and nutritional analyses were conducted
for numerous Nebraska food companies.
The work supported by this grant began in fiscal year 1992. The
appropriations were $50,000 per year for fiscal years 1992-1993 ;
$47,000 for fiscal year 1994; and $42,000 for fiscal years 1995-1997
each year. A total of $273,000 has been appropriated. The Food
Processing Center received $288,421 in State funds and $1,303,685 in
food industry grants and miscellaneous sources from 1992 through 1996.
Research is being conducted at the University of Nebraska. Because
this project supports ongoing technical assistance to clients, the
objectives are ongoing. Keeping with the Administration's policy of
awarding research grants competitively, no further Federal funding for
this grant is requested. Research could be continued at the State's
discretion using formula funds.
An agency science specialist conducts a merit review of the
proposal submitted in support of the appropriation on an annual basis.
A review of the proposal was conducted on December 20, 1996. Progress
under previous grants for this project appears to be satisfactory.
food systems research group, wisconsin
The Group conducts research on contemporary issues affecting the
organization and competitiveness of the U.S. food system in domestic
and international markets. The issues include new technologies, market
structure, and government policies and programs. Studies have been
completed on pricing of cheddar cheese, fed cattle and hogs; changes in
private label product markets; causes of structural change in the flour
milling, soybean oil milling, wet corn milling, cottonseed milling,
beef packing, and broiler processing industries; competition in U.S.
food markets; and the relationship between U.S. food market structure
and the industry's performance in global markets. The principal
researcher believes that the U.S. food system is changing rapidly in
response to a large number of global economic-social-technical changes.
Research is needed to determine the effects of these change on the
system's organization and performance, and to ascertain needed
adjustments in public policies based upon sound research. In view of
significant needs for research in high priority national interest
topics such as improved pest management systems and food safety, funds
are not proposed to continue this Special Research Grant. At the
discretion of the state, Hatch Act or other funding could be used to
support this research.
The original goal was to conduct research to assess and evaluate
the organization and performance of the U.S. food industry and provide
recommendations for improvements. The Food Systems Research Group
recently completed a study of the National Cheese Exchange which
resulted in a major public report, Congressional hearings, and a
Wisconsin task force. Alternative pricing mechanisms are being
developed to avoid the problems of a very thin market which is used to
price a large volume of off-market sales. The group is also examining
the impact of ``tough competition'' policies on industry performance.
Deregulation in the United States and privatization in the U.K.,
Mexico, and Eastern Europe provide empirical bases for evaluating the
impact. The Group has completed numerous studies on economic structure
and performance issues of the U.S. food manufacturing and distribution
system. Basic research is conducted on market theories; effects of
mergers, new technologies, and firm conduct on industry structure and
organization; factors affecting industry prices, profits, efficiency
and progressiveness; and impact of public policies and regulations on
food system organization and performance.
Grants have been awarded from funds appropriated as follows: fiscal
years 1976-1981, $150,000 per year; fiscal years 1982-1985, $156,000
per year; fiscal years 1986-1989, $148,000 per year; fiscal year 1990,
$219,000; fiscal years 1991-1993, $261,000 per year; fiscal year 1994,
$245,000; and fiscal years 1995-1997, $221,000 per year. A total of
$4,026,000 has been appropriated.
The non-federal funds and sources provided for this grant are as
follows: State appropriations of $120,304 in fiscal year 1991; $119,448
in fiscal year 1992; $85,188 in fiscal year 1993; $96,838 in fiscal
year 1994; $100,869 in fiscal year 1995; $101,272 in fiscal year 1966;
and $112,842 in fiscal year 1997.
The grant supports research at the University of Wisconsin,
Madison. The original proposal in 1976 was for a period of 36 months.
The current phase of the program will be completed in 1999. In keeping
with the Administration's policy of awarding research grants
competitively, no further Federal funding is requested for this grant.
CSREES performed a merit review of the project in January 1997 as
it evaluated the project proposal for 1997 and concluded that, under
this project, researchers conduct unique studies on the structure,
conduct and performance of selected segments of the food industry. In
spite of the growing concentration in food production-processing and
increasing public policy questions concerning the performance of this
industry, few organizations are providing the research needed for
public and private decision-making. Research results appear in several
professional journals and popular press and researchers have ongoing
dialog with private and public decision-makers.
forestry research, arkansas
The Arkansas Forest Resources Center has offered programs of
teaching and research to the landowners of Arkansas and the surrounding
region. This has been done through offering continuing education
workshops for landowners. The educational thrust has combined Center
and private dollars to establish computer software capability capable
of use in the education of landowners and students. The Center includes
one of only three Arc View learning centers for natural resources. The
Center has acquired quality staff, well versed in the use of advanced
technologies. Projects address issues of species diversity, richness,
redundance, and the resilience of disturbed and undisturbed hardwood
stands. Furthermore, evidence exists that neotropical migratory birds
are indicators of ecosystem health. Factors implicated as influencing
their breeding range include habitat destruction/alteration, forest
fragmentation, etc. Thus, issues of reestablishment and the structure
of regenerated hardwood stands are important for timber, non-timber
values, and the quality of life enjoyed regionally, nationally, and
internationally. These issues will grow in importance as Southern
forests assume greater proportions of the national demand for hardwood
fiber and wood. The principal researcher believes that with the reduced
levels of production of wood products from the Northwest, Southern
forests are increasingly bearing the brunt of providing the majority of
wood products for the United States. This increased production makes
more imperative the appropriate and efficient balance in the use of
Southern forests in producing timber and non-timber outputs. This would
prevent these conflicts, or at least reduce them significantly.
However, with the limited resources available and the possibility that
at the discretion of the state, Hatch Act or other funding could be
used to support this research, funds are not proposed to continue this
Special Research Grant.
Developing alternative forest management strategies for achieving
multi-resource objectives; i.e., joint production of timber, wildlife,
recreation, and other outputs of the forest on private, industrial, and
non-industrial forest lands and public forest lands, is the thrust of
goal one of the project. In the last year, significant progress has
been made in several areas. Some examples include: developing intensive
fiber farming systems as alternatives to soybeans for Mississippi
farmers, taking the first step toward biological control of the
Southern pine beetle by discovering the nutrient needs of predators of
the beetle so they can be grown and studied in artificial cultures, and
conducting the first survey of nonindustrial landowners in Arkansas for
15 years. The survey shows some areas for concern, such as the fact
that the average age of forest landowners is over 60. There will be a
massive change in ownership in the next 10-20 years. Landowners
continue to not be aware of assistance programs and a concern about
government programs and intervention on private land. This is
information needed to prepare our institutions for transitions and to
design more effective programs. Ongoing projects include a broad array
of topics, competitively awarded within the Center, concerned with best
management practices, ecological characteristics, effects of different
management intensities, streamside buffer zone effectiveness, as well
as the efforts mentioned previously.
The work supported by this grant began in fiscal year 1994. The
appropriation for fiscal year 1994 was $470,000 and for fiscal year
1995 through 1997, $523,000 each year. A total of $2,039,000 has been
appropriated. During fiscal year 1994, more than $380,000 was funded by
forest and related industries and private foundations. For fiscal years
1995 and 1996, these figures were $815,000 and $910,000, respectively.
This research is being conducted at the School of Forest Resources,
the University of Arkansas at Monticello. The primary project
objectives are to be completed by the end of the fifth year of funding,
and the specific objectives of each project will be met. Some projects
have long-term objectives, typical of forestry research. These projects
and objectives will be continued using the infrastructure and capacity
developed with these Special Research Grants. Keeping with the
Administration's policy of awarding research grants competitively, no
further Federal funding for this grant is requested. Research could be
continued at the State's discretion using formula or other funds.
In 1991, a Cooperative State Research, Education, and Extension
Service team visited Monticello and reviewed faculty qualifications,
supporting sources, and the feasibility of the proposal. The team exit
report indicated the faculty was highly capable, the infrastructure
needed strengthening, and the proposal concepts were feasible. Since
1991, there has not been a formal program review.
fruit and vegetable market analysis, arizona and missouri
The purpose is to provide timely knowledge of the impacts of trade,
environmental, monetary, and other public policies and programs upon
the Nation's fruit and vegetable industry to farmers, agribusinessmen,
and policymakers through a program of empirical assessment and
evaluation. The U.S. fruit and vegetable sector is experiencing
increased growth from greater domestic and export demand. However, the
growth of this sector depends upon its ability to compete domestically
and internationally and to conform with the regulatory environment in
which it operates. This program of research provides information to
farmers and policymakers on the implications and impacts of various
policies and programs. However, in view of significant needs for
research in high priority national interest topics such as improved
pest management systems, funds are not proposed to continue this
Special Research Grant. At the discretion of the State, Hatch Act or
other funding could be used to support this research.
The goal is to develop the analytical capability to assess and
evaluate public policies and programs impacting the U.S. fruit and
vegetable industry and disseminate the results to users. Proposals have
been submitted that outline long-range plans and specific projects for
funding. Models have been developed for potatoes, fresh market
tomatoes, onions, broccoli, lettuce, cauliflower, oranges and apples.
This grant will be used to develop models for processing market
tomatoes, strawberries, celery, cucumbers and green peppers. Trade
models for those commodities with a significant import and/or export
sector will also be developed. These models feed in to a larger food
and agricultural sector model to support analyses of cross commodity
and policy effects.
The work supported by this grant began in fiscal year 1994. The
appropriation for fiscal year 1994 was $329,000, and for fiscal years
1995-1997, $296,000 each year. A total of $1,217,000 has been
appropriated.
The non-federal finding provided to this grant in fiscal year 1994
was $50,073 State appropriations and $11,000 industry for a total of
$61,073; $21,876 State appropriations and $36,624 industry for a total
of $58,500 for fiscal year 1995; a total of $62,400 from State and
industry sources expected for fiscal year 1996; and approximately
$50,000 from these sources in fiscal year 1997.
The work is being carried out at Arizona State University and the
University of Missouri. The university researchers anticipate that work
is an ongoing project to look at the impact of various public policy
proposals on the U.S. fruit and vegetable industry. However, in keeping
with the Administration's policy of awarding research grants
competitively, no further Federal funding for this grant is requested.
We have conducted no formal evaluation. However each annual
proposal is carefully reviewed and work progress is compared with prior
year's objectives.
generic commodity promotion, new york
The grant supports, in part, the National Institute on Commodity
Promotion Research and Evaluation which provides objective analyses of
national and state commodity checkoff programs designed to enhance
domestic and export demand. The principle researcher believes that
producers are contributing about $1 billion annually to commodity
research and promotion funds designed to expand the domestic and export
markets for their products. The number of commodity groups
participating and the size of the funds available could continue to
grow. There are national and regional needs to ascertain the
effectiveness of such programs because of the large number of dollars
involved and several questions about their effectiveness. In view of
significant needs for research in high priority national interest
topics such as improved pest management systems, funds are not proposed
to continue this Special Research Grant. At the discretion of the
state, Hatch Act or other funding could be used to support this
research. The goal is to determine the economic effectiveness of
generic promotion programs designed to increase the sales of
agricultural commodities in domestic and international markets. Recent
accomplishments include: the impact of promotion and other factors on
the sales of almonds, beef exports, pork exports, and wheat exports;
development of a major database of commodity advertising expenditures
for future research; new methods of measuring advertising wearout; and
comparisons of research techniques to determine sensitivity of results
based on various methods used.
The work supported by the grant began in fiscal year 1994. The
appropriation for fiscal year 1994 was $235,000 and for fiscal years
1995-1997, $212,000 each year. A total of $871,000 has been
appropriated. The non-federal matching funds and sources allocated to
this grant by Cornell University are as follows: $97,333 a year in
State appropriations for fiscal year:, 1994-1996; $97,333 for fiscal
year 1997. Collaborating institutions performing work under subcontract
agreements have not provided information.
The work is being carried out at Cornell University in
collaboration with eight other land-grant universities. The original
proposal in 1994 was for a period of 21 months, however, the objectives
for evaluating the benefits of promotion programs is a growing regional
and national concern as producers take on greater responsibility for
marketing their products. The current phase of the program will be
completed in 1998. In keeping with the Administration's policy of
awarding research grants competitively, no further Federal funding is
requested for this grant.
CSREES performed a merit review of the project in January 1997, as
it evaluated the project proposal for 1997, and determined that the
project provides leadership for a unique body of research and education
on the impact of commodity promotion programs. Research results appear
in several professional journals and popular press and researchers have
ongoing dialog with private and public decision makers.
global change
Radiation from the sun occurs in a spectrum of wavelengths with a
majority of wavelengths being beneficial to humans and other living
organisms. A small portion of the short wavelength radiation, what is
known as the Ultraviolet or UV-B Region of the spectrum, is harmful to
many biological organisms. Fortunately, most of the UV-B radiation from
the sun is absorbed by ozone located in the stratosphere and does not
reach the surface of the earth. The discovery of a deterioration of the
stratospheric ozone layer and the occurrence of an ozone hole over
polar regions has raised concern about the real potential for increased
UV-B irradiance reaching the surface of the earth and the significant
negative impact this could have on all biological systems including man
plus animals and plants of agricultural importance. There is an urgent
need to determine the amount of UV-B radiation reaching the earth's
surface and to learn more about the effect of this changing
environmental force. The Cooperative State Research, Education and
Extension Service, CSREES, is in the process of establishing a network
for monitoring surface UV-B radiation which will meet the needs of the
science community of the United States, and which will be compatible
with similar networks being developed throughout the world. The fiscal
year 1996 grant supports work through July 1997. This grant is part of
a government-wide initiative. The research is closely coordinated with
other Federal agencies involved in the U. S. Global Change Research
Program UV-Monitoring Network Plan.
The principal researcher believes destruction of the stratospheric
ozone layer, our shield from the full intensity of solar radiation,
continues to increase. This creates a high priority need for
information to document not only the levels of UV-B radiation reaching
the earth's surface, but the climatology of that radiation. The United
States, and the rest of the world, needs to know the strength of the
UV-B radiation reaching the earth and the potential impact on all forms
of life, especially animal and plant life of agriculturally important
species.
The principal researcher believes this research to be of national
as well as regional and local importance.
The USDA UV-B Network is to provide accurate, geographically
dispersed data on UV-B radiation reaching the surface of the earth and
to detect trends over time in this type of radiation. A primary problem
which had to be overcome in order to reach this goal is the development
of instrumentation adequate to make the measurements required for the
monitoring network. A major advance occurred during 1996 with the
availability to the network of a new multi-band instrument which will
provide the spectral information needed to support both biological and
atmospheric science research and to serve as ground-truth for satellite
measurements. These instruments have been deployed and are currently in
operation at ten monitoring sites across the United States. The
researchers plan to have twenty sites operational by the summer of
1997. Two grants to design and build advanced spectroradiometers have
been awarded under the National Research Initiative Competitive Grants
Program. These instruments are to be used in a research network to make
precise measurements of the total UV-B spectra at selected sites. The
first of these instruments failed to meet spectral performance
standards when tested and calibrated by the National Institute of
Science and Technology. An alternative design which will result in a
much larger and difficult instrument to deploy is currently under
development. To gain network experience, broadband instruments along
with ancillary instruments have been installed at ten selected field
sites and operated for the last 28-36 months. An additional ten sites
have been developed during the last 12 months, including those equipped
with the new multi-band UV instrument. Data from all sites is
transmitted daily to Colorado State University for analysis,
distribution and archiving. These data are available, within 24 hours
of collection, on the Internet via a World Wide Web Site located in the
Natural Resources Research Laboratory at Colorado State University. The
Department of Agriculture is also a participant in the development of a
central calibration facility located at Department of Commerce
facilities in Boulder, Colorado to ensure uniform and acceptable
calibration and characterization of all instruments used in interagency
UV-B monitoring programs.
The work supported by this grant began in fiscal year 1992, and the
appropriation for fiscal years 1992-1993 was $2,000,000 per year;
fiscal year 1994 was $1,175,000; fiscal year 1995 was $1,625,000;
fiscal year 1996 was $1,615,000; and fiscal year 1997 is $1,567,000. A
total of $10,072,000 has been appropriated. The non-federal funds and
sources provided for this grant are as follows: $162,000 state
appropriations in 1993; $183,106 state appropriations in 1994; and
$285,430 provided by Colorado State University in 1995.
Colorado State University is managing the operating network which,
when completed, will include all regions of the country. At least
thirty sites are planned for the climatological network including sites
in Hawaii, Alaska and Puerto Rico in order to provide broad geographic
coverage. Ten sites have been operational with broad band instruments
for up to three years and it is planned to have at least twenty sites
operational with new generation instruments by the summer of 1997. The
research level network will begin with the first instrument to be
installed at the Department of Energy Solar Radiation site near Ponca
City, Oklahoma, as part of the Atmospheric Radiation Measurements field
network. As with other weather and climate observations, this network
will address an ongoing need for the predictable future. These
measurements will provide information-nation on the nature and
seriousness of UV-B radiation in the United States and will provide
ground truth validation to other predictions of UV-B irradiance.
The agency has assigned two technical staff to continuously monitor
activities in the global change research program. A team of three
experts in UV-B radiation measurement technology reviewed
specifications for the development of the advanced spectroradiometers
in July 1996 prior to the procurement of major components of the
instrument. A panel of radiation spectra scientists was brought in to
review data derived from the new multi-band instruments in December
1996 to advise on the interpretation and analysis of data derived from
these instruments. Agency staff are in contact with program management
on a weekly basis and have visited the program headquarters four times
during the last year.
global marketing support services, arkansas
This grant supports the University of Arkansas Global Marketing
Support Services program to provide research and service to
agribusinesses. The objective of the university research is to identify
potential foreign markets for Arkansas products and to conduct and
disseminate foreign market assessment and evaluation studies to
agribusiness firms. The principal researcher believes the emerging
importance of global trade to the nation's economy and the reduction of
trade barriers world-wide presents unprecedented opportunities for
cooperative public-private-university research to develop expertise in
world markets. In view of significant needs for research in high
priority national interest topics such as improved pest management
systems, funds are not proposed to continue this Special Research
Grant. At the discretion of the state, Hatch Act or other funding could
be used to support this research.
The goal is to develop a university research and service
organization to support international trade development activities by
local area businesses. Research is conducted to determine the demand
for specific Arkansas products in selected countries. Recent results
include: twelve ``Industry/Company Opportunity Reports'' that provided
local businesses with information about potential export markets; a
report on consumer attitudes in Mexico and Columbia toward imported
products; an evaluation of the food system in China, with emphasis on
poultry sector; two new fact sheets; and additions to an electronic
export information database that is accessed by local firms.
The work supported by this grant began in fiscal year 1994. The
appropriation for fiscal year 1994 was $47,000; and for 1995 through
1997, $92,000 a year. A total of $323,000 has been appropriated. The
non-federal funds and sources provided for this grant are $90,000 per
year in State appropriations for fiscal years 1994-1996. Private funds
also support this grant but an estimate is not available.
This research is being conducted at the University of Arkansas,
Fayetteville. The original proposal in 1994 requested funding for a
period of 12 months, but the objectives for expanding the export
capacity of small to medium-sized agribusiness firms will not be fully
met until 1999. In keeping with the Administration's policy of awarding
research grants competitively, no further Federal funding is requested
for this grant.
CSREES performed a merit review of the project in January 1997 as
it evaluated the project proposal for 1997. CSREES scientists are
currently working with the university researchers to enhance the 1997
proposal so that it adequately reflects the kind of work being
conducted and to address timelines for the initiation of new research
and the distribution of results.
grain sorghum, kansas
This project was designed to address the lack of yield improvement
in grain sorghum cultivars, particularly when grown under dryland
conditions where a considerable portion of this crop is grown, The
research will focus on identification of early maturing lines which
will shift more of the production to grain and less to vegetative
growth and thereby making more efficient use of the limited water
supply. The focus of this research is toward the non-irrigated lands of
Kansas where sorghum can produce a grain crop under conditions that
would not be possible with corn and is therefore very important in the
rotation with wheat. While the research is directed toward Kansas
conditions, it would also apply to adjoining states. However, in view
of significant needs for research in high priority national interest
topics such as improved pest management systems, funds are not proposed
to continue this Special Research Grant. At the discretion of the
state, Hatch Act or other funding could be used to support this
research. The original goal of this research is to identify/develop
grain sorghum cultivars that mature earlier with more of the production
in grain rather than vegetative growth. This is a new project starting
in fiscal year 1997, so no significant accomplishments can be reported
at this time.
The work supported by this grant begins in fiscal year 1997 and the
appropriation for fiscal year 1997 is $106,000.
Research will be conducted at Kansas State University. This is a
new project starting in fiscal year 1997, so the objectives have not
yet been met. Keeping with the Administration's policy of awarding
research grants competitively, no further Federal funding for this
grant is requested.
The research proposal will be peer reviewed prior to awarding of
funds.
grass seed cropping systems for sustainable agriculture
This program was developed to provide management systems for
sustainable grass seed production without field burning of the straw
residue following harvest which results in adverse air quality
problems. Grass seed yields are often significantly reduced the
following season if the residue is not burned. Fiscal year 1996 grant
proposal has been received and is being processed. The principal
researcher believes that according to information provided by technical
committees representing researchers and the grass seed industry, the
need for this research is to develop sustainable systems of seed
production that do not depend on field burning of straw residue. Much
of the grass seed for the United States including lawn grasses is
produced in the area. Field burning of straw residue creates
unacceptable levels of air pollution and yields of some cultivar
decline without burning. In view of significant needs for research in
high priority national interest topics such as improved pest management
systems, funds are not proposed to continue this Special Research
Grant. At the discretion of the state, Hatch Act or other funding could
be used to support this research, The original goal for this project is
to develop grass seed production systems that do not depend on field
burning of straw residue. To date, joint planning by state experiment
station administrators and researchers from the three states with
industry input for an integrated regional research effort to solve the
problem.
The work supported by this grant began in fiscal year 1994. The
appropriation for fiscal year 1994 was $470,000, and for fiscal years
1995-1997, $423,000 each year. A total of $1,739,000 has been
appropriated. The nonfederal support for this project in fiscal year
1994 was $266,055, $298,052 for fiscal year 1995 and $282,053 in 1996.
The research will be conducted by the three state agricultural
experiment stations in Idaho, Oregon and Washington. Completion of the
initial objectives was anticipated to take 5 years and therefore should
be completed in 1999. In keeping with the Administration's policy of
awarding grants competitively, no further Federal funding for this
grant is requested. Research could be continued at the State's
discretion using formula funds.
The entire project is reviewed annually by a steering committee for
focus and relevance. The combined proposal is reviewed by CSREES before
funds are awarded.
human nutrition, iowa
This research aims to develop animal and plant foods with
nutritionally optimal fat content and to improve utilization of foods
containing non-nutrient health protectants, components that may reduce
health risks. The research includes human and animal nutrient
utilization, consumer food choices, and economic impacts of nutritional
optimization of food production and processing. The fiscal year 1996
grant supports research efforts of 25 investigators from six
disciplines through June 1997. The research addresses food quality,
nutrition and optimal health. Much of the research focuses on improving
the nutritional quality of foods important to the economy of the
Midwest, while making those improvements economically feasible. This
work may be a model for the nation with regards to designing foods to
improve human nutrition. In view of significant needs for research in
high priority national interest topics such as improved pest management
systems, funds are not proposed to continue this Special Research
Grant. At the discretion of the state, Hatch Act or other funding could
be used to support this research.
The goal of the Center for Designing Foods to Improve Nutrition,
the administrative unit for this grant, is to improve human nutrition
and health maintenance by determining how to improve animal and plant
food fat content and how to increase availability of health-protectant
factors in the human food supply. The research includes food
production, processing, consumer choices, biological utilization, and
economic impacts. This research has identified soy oils which can be
naturally hardened and early results indicate potential feasibility of
processing these oils into shortenings, which may provide human health
benefits in comparison with chemically saturated vegetable fats
containing trans fatty acids. Additional work further verifying the
feasibility of production of more highly unsaturated pork fat has also
been conducted, with human feeding trials underway. A novel health-
protective, cholesterol-lowering component of soy, the isoflavone
daldzein, has been identified in a mouse feeding study. Further
evidence has been found that oxygenated carotenoids potentially found
in processed fruits and vegetables have greater antioxidant ability
than the parent carotenoids. This greater antioxidant ability might be
expected to decrease cancer and heart disease risk.
The work supported by this grant began in fiscal year 1991 with an
appropriation of $300,000. The fiscal years 1992-1993 appropriation was
$500,000 per year; $470,000 in fiscal year 1994; $473,000 in fiscal
years 1995 through 1997. A total of $3,189,000 has been appropriated.
The non-federal funds and sources provided for this grant were as
follows: $293,000 university, $312,869 industry, and $14,000
miscellaneous in 1991; $90,000 state appropriations, $473,608
university, $131,160 industry, and $116,560 miscellaneous in 1992;
$307,500 state appropriations, $472,081 university, and $222,267
industry in 1993; $486,000 university, and $254,000 private in 1994;
$210,000 university, and $200,000 private in 1995; and $613,770
university and $207,811 private in 1996.
Research is being conducted at the Center for Designing Foods to
Improve Nutrition, Iowa State University. The original overall
objective to design foods to improve nutrition is continuing to be
addressed. A set of related objectives will be completed in 1999.
Keeping with the Administration's policy of awarding research grants
competitively, no further Federal funding for this grant requested.
The grant proposal for fiscal year 1996 was subjected to extensive
peer review and the recommendations will be incorporated into the
proposed renewal.
human nutrition, louisiana
Obesity is a major problem in the United States. This grant,
entitled Dietary Fat and Obesity, will help answer three issues about
this problem. Is there a specific preference for fat in some people,
and if so, how is it controlled? Why do thin people adapt differently
to a high fat diet than obese people? How do specific fatty acids in
the diet influence body metabolism of lean and obese people
differently? Obesity is one of the most important and preventable
problems in America today and its prevalence in Louisiana is among the
highest in the nation. The results will expand the foundation for
setting national dietary guidelines for individual fat intake. In view
of significant needs for research in high priority national interest
topics such as improved pest management systems, funds are not proposed
to continue this Special Research Grant. At the discretion of the
state, Hatch Act or other funding could be used to support this
research.
The overall goal of this grant is to identify the basis for the
susceptibility to obesity of some people who eat high fat diets and to
understand how they differ from those people who are resistant to
becoming obese when eating a high fat diet. The first project is aimed
at identifying people who eat large amounts of fat and those who eat
small amounts of fat. The researchers are taking several approaches to
this problem, including specific laboratory tests and evaluations of
people in free choice environments. In the second project, they have
examined the effect of different levels and distributions of body fat
on the way foods with different amounts of fat are used by the body.
This will be followed by detailed studies on the processes by which
adjustments to changes in body fat are made. The third project will
evaluate the effect of different types of dietary fat on the metabolism
and response to insulin. These studies have just begun.
The work supported by this grant began in fiscal year 1991 and the
appropriation for fiscal years 1991-1993 was $800,000 per year; for
fiscal years 1994-1997 was $752,000 per year. A total of $5,408,000 has
been appropriated.
The non-federal funds and sources provided for this grant were as
follows: $523,100 state appropriations in 1991; $515,100 state
appropriations and $2,216,606 private in 1992; $536,100 state
appropriations and $940,000 private in 1993; $627,000 state
appropriations and $3,775,000 private in 1994; $546,100 state
appropriations and $3,100,000 private in 1995; and $1,471,000 state
appropriations and $2,488,000 private in 1996.
Research will be conducted at the Pennington Biomedical Research
Center, Louisiana State University. The anticipated completion date for
the original objectives is fiscal year 1999. Keeping with the
Administration's policy of awarding research grants competitively, no
further Federal funding for this grant is requested.
The grant proposal for fiscal year 1996 was subjected to extensive
peer review, and in December 1996 an on-site panel of researchers
evaluated the proposed objectives and experimental protocols. On the
basis of the written comments from the reviewers, the proposal for
fiscal year 1997 was revised.
human nutrition, new york
The work focuses on the basic biological roles of selected
nutrients and other food components which are expected to increase or
fall as consumption patterns move toward dietary guidelines. The
objectives are to develop strategies for improving methods to monitor
plant-based food consumption; approaches to increase their consumption
by school-aged children; and an integrated analysis of availability,
accessibility, and consumption of plant-based foods at the community
level. The research will contribute to the knowledge base needed by
consumers to make informed decisions, businesses to plan for
maintaining the world's most efficient food system, and those who make
and implement policies related to agriculture, food and health outcomes
as eating patterns shift to predominantly plant-food based diets. In
view of significant needs for research in high priority national
interest topics such as improved pest management systems, funds are not
proposed to continue this Special Research Grant. At the discretion of
the state, Hatch Act or other funding could be used to support this
research.
The newly revised dietary guidelines reemphasize expected health
benefits from the increased consumption of fruits, vegetables, and
grain products. As pointed out in the response to the first question,
investigations are carried out at the basic, clinical, and community
levels. Brief synopses typifying the accomplishments are reported.
Changes in the American diet are expected to alter lipid metabolism by
impacting fat levels and composition. Lipoprotein lipase is a pivotal
enzyme that regulates lipid metabolism. New understandings about the
enzyme were reported. Researchers cloned a larger portion of the human
lipoprotein lipase promoter than had been isolated previously. The
activity, synthesis and secretion of lipoprotein lipase is decreased
ten fold in young fat cells transfected with the hormone leptin, which
suggests a new function for this hormone. In addition, investigators
demonstrated that fatty acids enhance the differentiation of young fat
cells and possible mechanisms are being explored. Work also has been
done on strategies for improving the quality of school lunch programs.
This work builds on an earlier study which showed the reluctance of
children to consume unfamiliar foods to be a significant barrier. A
coordinated effort by food service personnel, teachers, and cooperative
extension has resulted in a successful program that introduces
unfamiliar to school children by a variety of methods, such as the
introduction of various ethnic foods as part of lessons on cultural
diversity. Another portion of the work focuses on the
interrelationships among the factors that influence food choice at the
community, family and individual levels. The approach involves a unique
integration of research and intervention. Results indicate that use of
fruits and vegetables is positively associated with the previous
consumption of fresh produce from a home garden; regional, cultural, or
family traditions that emphasize these food groups, and health
concerns. Limited access to low cost and preferred types of fruits and
vegetables, and lack of time and skill for food preparation are
significant barriers to consumption. A ``Life Course Model of Fruit and
Vegetable Choices'' has been developed to guide further research and
intervention efforts.
Grants have been awarded from funds appropriated as follows: fiscal
year 1989, $450,000; fiscal years 1990-1991, $556,000 per year; fiscal
years 1992-1993, $735,000 per year; fiscal year 1994, $691,000; fiscal
years 1995-1997, $622,000 each year. A total of $5,589,000 has been
appropriated.
The non-federal funds and sources provided for this grant were as
follows: $154,056 state appropriations and $2,456 private in 1991;
$238,430 state appropriations and $60,746 private in 1992; $19,401
state appropriations and $22,083 private in 1993; $202,441 state
appropriations and $1,175 private in 1994; $296,794 state
appropriations in 1995; and $348,127 in state appropriations and
$39,593 private in 1996.
Research is being conducted at Cornell University, New York. The
original overall objective to integrate nutrition goals and food
systems is continuing to be addressed. A set of retained objectives
will be completed in 1997 and a set of new related objectives are
planned for an additional three years. Keeping with the
Administration's policy of awarding research grants competitively, no
further Federal funding for this grant is requested.
The grant proposal for fiscal year 1995 was subjected to extensive
peer review, and the recommendations were incorporated into the ensuing
experimental designs.
illinois-missouri alliance for biotechnology
The Illinois-Missouri Alliance has initiated a competitive grants
program in agricultural biotechnology for research in targeted priority
areas of need related to corn and soybeans. The scope of interest
includes production, processing, marketing, utilization, inputs and
support services, along with economic, social, environmental, and
natural resource concerns. The Alliance has solicited research project
proposals from scientists at Illinois and Missouri and other Midwestern
institutions, and have conducted peer reviews for science quality,
commercial feasibility and potential economic impact to select the
proposals that will be funded. In 1996 the Alliance awarded four
research grants at three institutions totaling $1,012,859. The Alliance
also issued a second request for proposals and received fifteen
proposals which are being reviewed by an external review panel of
scientists employed by agribusinesses. The principal investigator has
indicated that the goal of the Alliance is the pre-commercial
development of emerging biotechnology discoveries for agriculture. The
Midwestern region produces more than half of the nation's output of
corn and soybean crops, and the principal investigator believes it is
critical to domestic food security and United States competitiveness in
global agricultural markets. The Alliance is implementing a research
strategy that it hopes will generate important biotechnological
developments that are rapidly adaptable to unique local soil, climatic
and socioeconomic conditions of the region. In view of significant
needs for research in high priority national interest topics such as
improved pest management systems, funds are not proposed to continue
this Special Research Grant. At the discretion of the State, Hatch Act
or other funding could be used to support this research.
Fiscal year 1996 was the second year of funding for the Alliance.
The research program focuses on the two major commodity crops, corn and
soybeans, as produced, processed and marketed in the Midwest. The goal
of this biotechnology program is to fund integrated research and
development projects that will lead to specifically defined practical
technologies for commercialization. The projects funded in fiscal year
1996 include efforts to: (1) produce soybeans free of phytic acid to
improve nutritional value and reduce phosphate pollution, (2) improve
the protein quality of corn by increasing its lysine and tryptophan
content, (3) increase oil content and change the fatty acid composition
of soybeans to add value, and (4) commercialize a fast-acting
recombinant baculovirus for control of European corn borer.
The work supported by this grant began in fiscal year 1995 and the
appropriations for fiscal years 1995 and 1996 were $1,357,000 each
year, and for fiscal year 1997, $1,316,000. Thus a total of $4,030,000
has been appropriated.
The Alliance has not specified a required amount of matching funds,
but it is expected that most projects will have commitments for
significant direct and in-kind non-federal support. Since Alliance
projects are only now getting underway, the exact amount of the non-
federal contribution is still unknown. The non-federal contribution is
expected to be substantial, and a system for accounting for future non-
federal contributions is in place.
The research projects identified for funding in fiscal year 1995 is
being conducted at the University of Illinois, the University of
Missouri, and Iowa State University. Each project proposal for Alliance
funding has a target date for completion. The four initial projects
were three-year studies with anticipated completions at the end of
fiscal year 1998. Most of the second round of projects are also three-
year studies with anticipated completions at the end of fiscal year
1999. Keeping with the Administration's policy of awarding research
grants competitively, no further Federal funding for this grant is
requested. Research could be continued at the State's discretion using
formula or other funds.
The Illinois-Missouri Biotechnology Alliance was evaluated for
scientific merit by an agency peer review panel on January 7, 1997. The
panel recommended approval of the project pending receipt of
supplemental information on administrative aspects of the project.
improved dairy management practices, pennsylvania
The research focuses on developing methods to help dairy farmers in
the adoption of new technology and management practices which lead to
improved dairy farm profitability. The principal researcher believes
the local need is the identification and implementation of profit
enhancing management strategies for Pennsylvania dairy farms in
response to changing market conditions and emerging technologies. The
current focus is to develop economically-viable solutions to issues
confronting Pennsylvania dairy farmers such as dealing with animal
waste in an environmentally-friendly manner, reducing the cost of
forage production systems, including grazing systems, and to develop a
better understanding of decision processes by dairy farmers. In view of
significant needs for research in high priority national interest
topics such as improved pest management systems, funds are not proposed
to continue this Special Research Grant. At the discretion of the
State, Hatch Act or other funding could be used to support this
research.
The original goal of this research remains the same, which is the
development of methods to help dairy farmers in the adoption of new
technology and management practices which lead to improved dairy farm
profitability. A farm management survey is complete and analysis of
results is in progress. Farm financial models have been developed and
are undergoing field test on selected farms. Workshops to teach
elements of business management to dairy farmers have been conducted,
and survey instruments are in place to monitor effectiveness of
workshops. Research is currently underway to develop improved models
for nutrient management on northeastern dairy farms, to evaluate the
potential role of intensive grazing systems to replace harvested
forage, and to better understand how decisions are made by dairy farm
families. Refinements of an expert computer based system to assist
dairy farmers in controlling the udder disease, mastitis, is underway.
A study to evaluate the induction of lactation on dairy profitability
is underway. An additional study to evaluate the impact of improved
protein nutrition during late gestation on dairy cow performance has
been initiated.
The work supported by this grant began in fiscal year 1992 and the
appropriation for fiscal years 1992 and 1993 was $335,000 per year. The
fiscal year 1994 appropriation was $329,000 and $296,000 each year in
fiscal years 1995-1997. A total of $1,887,000 has been appropriated.
During fiscal year 1992, $354,917 were from State funds, $16,000 from
Industry, for a total of $370,417. During fiscal year 1993, $360,374
were from State funds and $16,000 from Industry for a total of
$376,374. Information is not available for fiscal years 1994-1996.
Research is being conducted at Pennsylvania State University. The
principal researcher anticipated completion of the original objectives
by March 1994. The original objectives were met. Availability of
continued funding has permitted the institution to develop a
competitively awarded grant program within the institution to address
priority issues related to management of dairy farms. Proposals are
reviewed and ranked by peers in other institutions prior to award. It
is anticipated that awards from the fiscal year 1997 appropriation will
be complete in September 1999. Keeping with the Administration's policy
of awarding research grants competitively, no further Federal funding
for this grant is requested.
The agency accepts technical review of specific proposals funded by
this grant on an annual basis. The overall proposal is reviewed by the
agency on an annual basis. In addition, technical staff conducted on-
site reviews of the program in 1993 and in 1995. The overall objectives
of the work funded by this grant has direct relationship to the
development of an Integrated Management System as well as to aspects of
animal production systems on animal well-being and impact on the
environment. The activities of this grant lie within the mission of
USDA and CSREES.
improved fruit practices, michigan
This research will involve a multidisciplinary approach to reduce
chemical use on apple, blueberry, and sour cherry, three important
Michigan fruit crops, and improve the management of dry edible beans
and sugar beets. Research will be conducted on crop management
techniques and reduced chemical use. The principal researcher believes
Michigan's need for this research is to develop and maintain/expand
their tree fruit and small fruits industry. There is a need to improve
the culture and management of dry edible beans and sugar beets. In view
of significant needs for research in high priority national interest
topics such as improved pest management systems, funds are not proposed
to continue this Special Research Grant. At the discretion of the
state, Hatch Act or other funding could be used to support this
research. The planned objectives of the research are to reduce the
chemical contamination of the environment from fruit production and
improve production practices for beans and beets through
multidisciplinary research, including pesticides, and the development
of new nonchemical production methods.
The work supported by this grant began in fiscal year 1994. The
appropriation for fiscal year 1994 was $494,000, and for fiscal years
1995-1997, $445,000 each year. A total of $1,829,000 has been
appropriated. The nonfederal funds and sources provided for this grant
in fiscal year 1994 were $437,338 from state appropriations and
$135,000 from industry, for fiscal year 1995 were $574,494 from state
appropriations and $127,000 from industry and a total of $908,969 for
1996.
Research will be conducted at Michigan State University. The
anticipated completion date of this project is 1998. The PI's have
reported significant progress toward improved cultural practices for
these speciality crops which is expected to reduce the need for
chemical pesticides. Keeping with the Administration's policy of
awarding grants competitively, no further Federal funding for this
grant is requested. Research could be continued at the State's
discretion using formula funds.
This project has not been subjected to a comprehensive review. The
annual proposals including all of its sub projects are subjected to
CSREES review before they are approved.
institute for food science and engineering, arkansas
As the flagship center for the Institute for Food Science and
Engineering, the Center for Food Processing and Engineering has as its
objectives to facilitate and encourage value-added research and improve
the efficiency and effectiveness of processing agricultural products.
Its research program includes seventeen projects which have been funded
and are underway or complete. The Center requires that researchers
acquire the financial support of industry to support their research.
Thus, five additional research projects have been approved but are
awaiting funding from industry. The next request for proposals by the
Institute will be issued on April 4, 1997. The Center for Food Safety
and Quality, with a mission to conduct research on the safety and
quality of foods relative to microbiological and chemical hazards, will
be activated during this grant period. The principal researcher
believes the Institute will provide technical support and expertise to
small and mid-sized food processors that usually do not possess
adequate expertise in-house. The economy of the southern region will be
improved through the creation of new jobs. The Institute will develop
and disseminate scientific information and provide educational programs
related to value-added further processing, storage and marketing of
food products. In view of significant needs for research in high
priority national interest topics such as improved pest management
systems and food safety, funds are not proposed to continue this
Special Research Grant. At the discretion of the State, Hatch Act or
other funding could be used to support this research.
The original goal of this research is to establish an Institute of
Food Science and Engineering at the University of Arkansas-
Fayetteville. As noted in an earlier response, the Institute for Food
Science and Engineering and the flagship Center for Food Processing and
Engineering were established and several research projects were funded
through the Center. Research demonstrated promise for a high pressure
water spray to remove phomopsis decay and brown rot tissue from peaches
for processing. Considerable progress was made in modifying
commercially produced rice hull silicate to create silica gel. Other
research results indicated that holding green and ripe peaches in
elevated carbon dioxide atmospheres could reduce acidity and decay,
possibly allowing fruits to ripen prior to processing without excessive
losses to decay. The Institute provided information to new food
business entrepreneurs on food regulations, safety, labeling,
ingredients, packaging, and financial aspects of starting a food
business and on marketing products. Several products were evaluated and
specific recommendations made to those entrepreneurs.
The work supported by this grant began in fiscal year 1996, and the
appropriation for fiscal years 1996 and 1997 was $750,000 each year. A
total of $1,500,000 has been appropriated. The non-federal funds and
sources provided for this grant include $184,700 in state funds and
$93,000 from industry in fiscal year 1996, and $187,357 in state funds
and $166,752 in industry funds in fiscal year 1997. The Institute
received, as a donation worth $200,000 from industry, a trained sensory
panel to qualify and quantify sensory properties of foods. Industry has
pledged an additional $109,628 which has not yet been received.
Research will be conducted at the University of Arkansas at
Fayetteville. The principal researcher anticipates that work will be
completed on the original goals in fiscal year 2005. The goals of this
project related to establishing the centers of the Institute are
sequential and have not been fully met. The Center for Human Nutrition
is scheduled to be activated in 1999. It is expected that objectives
related to research and service to food entrepreneurs will be ongoing
and require ongoing support. Keeping with the Administration's policy
of awarding research grants competitively, no further Federal funding
for this grant is requested. Research could be continued at the State's
discretion using formula funds.
An agency science specialist conducts a merit review of the
proposal submitted in support of the appropriation on an annual basis.
A review of the proposal was conducted on January 13, 199'7. The
assessment was that satisfactory progress was demonstrated in meeting
the goals of the Institute, noting that the timetable for activating
the Center for Food Safety and Quality had been accelerated.
integrated pest management/biological control
Research supported by Integrated Pest Management special grants
continues to provide a science basis for the development of alternative
approaches for managing pests including insects, mites, weeds, plant
pathogens, and ectoparasites. Emphasis of the program has been on
enhanced natural control. Enhanced natural control emphasizes increased
use of biological control, cultural control, and host resistance
practices and the management of genetic resistance of pests. Most of
the research projects emphasize the development of natural control
practices used in conjunction with selective pesticides and
biopesticides when pest monitoring programs and pest populations
warrant a pesticide application. In recent past years, a limited number
of joint research/extension projects were initiated in the North
Central Region, and in fiscal years 1996 and 1997, three to four joint
projects were funded in each of the four regions. The extension
component of the joint project, focusing on the education component for
implementing new approaches, is funded by extension IPM funds for
special projects. These joint projects are having an impact on the
entire research community. Researchers are planning for the
implementation of research from the beginning and throughout the
research.
This research program addresses the national priority to implement
IPM on 75 percent of the nations cropland by the year 2000. In
particular, the research will provide the tools to take IPM to more
bio-intensive levels which will have greater impact on environmental
quality and consumer safety while maintaining the agricultural
productivity, sustainability of protection practices, and
competitiveness of American agriculture. This research program
addresses the regional needs. The program is organized by regional
competitive grant programs, and the request for proposals address both
the national and regional needs and priorities. In the past year,
jointly funded research and extension production region commodity teams
with grower and private sector participation have identified priority
protection needs. This research program addresses local needs. State
IPM commodity interdisciplinary teams working with growers and private
consultants have identified priority local needs which are addressed in
the regional request for proposals. The fiscal year 1997 requests for
proposals in all four regions have made measurable shifts in emphasis
based on these priority setting activities.
The original goal and current goal is to bring IPM into the 21st
Century with a paradigm shift from past sole dependence on pesticides
to an emphasis on natural control integrated with selective pesticides
and biopesticides when pest population densities warrant their use. The
more recent increase in joint research/extension collaboration has
assisted bringing the accomplishments of research into implementation
reality. It has also provided for better documentation and measurement
of impacts of research and extension efforts. All four regions have
produced 12 to 15 page brochures documenting the impacts of research
and extension efforts. The titles are indicative of the goals:
Integrated Pest Management in the North Central States, a sustainable
approach to managing crop pests, using a combination of biological,
cultural, and chemical tactics that reduce pests to tolerable levels
that minimize economic, health, and environmental risks; Integrated
Pest Management in the Northeast Region, 1996 update Involving
Stakeholders; Integrated Pest Management in the Southern Region, At the
heart of Integrated Pest Management is its dual focus on improving
profitability and protecting vital natural resources; and Integrated
Pest Management in the Western Region. IPM advances on 2530 commodities
are described in these brochures.
Grants have been awarded from funds appropriated as follows: fiscal
year 1981, $1,500,000; fiscal years 1982 through 1985, $3,091,000 per
year; fiscal years 1986 through 1980, $2,940,000; fiscal year 1990,
$2,903,000; fiscal year 1991, $4,000,000; fiscal years 1992 and 1993,
$4,457,000 per year; fiscal year 1994, $3,034,000; and fiscal years
1995-1997, $2,731,000 each year. A total of $52,668,000 has been
appropriated. Non-federal funds are as follows: for fiscal year 1993,
state appropriations, $841,017; product sales, $33,987; industry
grants, $17,081; and other, $31,737; for fiscal year 1994, state
appropriations, $2,303,458; product sales, $77,157; industry grants,
$210,110; and other, $216,552.
This research is being carried out in practically all of the State
Agricultural Experiment Stations. There is a high priority for
continuation of IPM research and for collaborative linkages with other
research, extension, technology transfer, regulatory, and incentive
programs to accomplish the transitions called for in the
administration's policy for reducing overall risks from the use of
pesticides through integrated pest management programs which lead to
more sustainable agricultural production strategies and reduction in
the use of pesticides. The future will bring more collaboration between
program areas that address pest management building on the increased
collaboration between research and extension. Integration is currently
focused on the commodity production system. These are highly complex
systems involving a network of organizations that impact on the system.
Future levels of integration will address whole farm planning where
issues of landscape ecology can be addressed and better interactions
with water quality programs can take place. The rate of progress will
be determined by the availability of resources.
Due to the complexity of the program, evaluations are done at a
number of levels. All grants awarded are evaluated by peer scientists
in the multiple disciplines comprising IPM. These peer reviews are
conducted in the four regional IPM programs. Peer scientists are drawn
from regions outside of the region conducting the review. State IPM
commodity teams, with growers and private consultants, review plans and
priorities for commodities programs. Production region commodity
development programs have been reviewed by peer scientists at the
national level.
integrated production systems, oklahoma
This grant focuses on the development of efficient management
systems for production of watermelons and blackberries under
intensively managed conditions. The work will address biotic and
abiotic production components under Southeastern Oklahoma conditions
for use in production guidelines. This will include planting densities,
fertilizer studies, weed management and insect and disease control. The
proposal for fiscal year 1996 has been received and is being processed.
The principal researcher believes the need for this research is focused
on the local area of Southeastern Oklahoma, an area that is
economically depressed and in need of alternative crops to diversify
the dominant cow/calf livestock production. In view of significant
needs for research in high priority national interest topics such as
improved pest management systems, funds are not proposed to continue
this Special Research Grant. At the discretion of the state, Hatch Act
or other funding could be used to support this research. The original
goal of this research was to develop new and alternative crops to
supplement and diversify the cow/calf livestock agriculture of
Southeastern Oklahoma with emphasis on horticultural crops. Work to
date has shown promise for strawberries, blackberries, cabbage, melons
and blueberries. CD-ROM technology transfer to research results to
support an expert system will be developed for grower use.
Work supported by this grant started in fiscal year 1984 and the
appropriations were: fiscal, year 1984, $200,000; fiscal year 1985,
$250,000; fiscal year 1986, $238,000; fiscal years 1987-1989, $188,000
per year; fiscal years 1990-1991, $186,000 per year; fiscal year 1992,
$193,000; fiscal year 1993, $190,000; fiscal year 1994, $179,000;
fiscal years 1995-1997, $16 1,000 each year. A total of $2,669,000 has
been appropriated.
The non-federal funds and sources provided for this grant were as
follows: $165,989 state appropriations in 1991; $160,421 state
appropriations in 1992; and $164,278 state appropriations in 1993.
Nonfederal support for 1994 was $141,850 for state appropriations.
Funds for fiscal year 1995 were $129,552, and for 1996 were $146,000.
This research is being done at the Wes Watkins Agricultural
Research and Extension Center at Lane, Oklahoma, a branch of the
Oklahoma State Agricultural Experiment Station. The original objectives
of this project were to develop production system for alternative crops
with economic potential for southeastern Oklahoma. Each year's funding
cycle has address specific crop and management objectives to be
completed over two years time. These short term objectives have been
met for each of the completed two year projects. However the original
objective of developing alternative cropping systems is very long term
and has not been completed. In keeping with the Administration's policy
research grants competitively, no further Federal funding for this
grant is requested. Research could be continued at the State's
discretion using formula funds.
Each of the annual project proposals has been put through the
institutions review and is also reviewed by a CSREES scientist before
approval. In addition to the annual review of individual proposals, a
comprehensive review of the Lane Agricultural Center, where this
research is conducted, was conducted in 1993. This review revealed that
work supported by this grant is central to the mission of that station
and represents an important contribution to the agriculture of the
area.
international arid lands consortium
Fiscal year 1996 was the third year that CSREES funded the
International Arid Lands Consortium. The Forest Service supported the
program during fiscal year 1993 to develop an ecological approach to
multiple-use management and sustainable use of and semiarid lands.
Projects that began in 1994-1996 will continue to be funded to address
issues of land reclamation, land use, water resources development and
conservation, water quality, and inventory technology, e.g. remote
sensing. The principal researcher believes the Consortium is devoted to
the development, management and reclamation of and semi-arid lands in
the United States, Israel, and elsewhere in the world. The
International Arid Lands Consortium will world to achieve research and
development, educational and training initiatives, and demonstration
projects. The current member institutions are the University of
Arizona, The University of Illinois, Jewish National Fund, New Mexico
State University, South Dakota State University, Texas A&M University,
Kingsville. The United States Department of Agriculture's Forest
Service works very closely with The International Arid Lands Consortium
through a service-wide memorandum of understanding. The IALC's
affiliate members include Egypt's Ministry of Agriculture and Land
Reclamation Undersecretarial for Afforestation and Jordan's Higher
Council for Science and Technology. In view of significant needs for
research in high priority national interest topics such as improved
pest management systems, funds are not proposed to continue this
Special Research Grant. At the discretion of the state, Hatch Act or
other funding could be used to support this research.
The original goal of this consortium is to be acknowledged as the
leading international organization supporting ecological sustainability
of arid and semi-arid lands. To date, 35 projects have been funded, 25
of which are to conduct research and development, 6 for demonstration
projects, and 4 for international workshops. Funds approximating $1.91
million have been used to fund these projects.
International Arid Lands Consortium was incorporated in 1991. Funds
were appropriated to the Forest Service in 1993. Additional funds were
received during each of the years that followed. $329,000 has been
appropriated from CSREES for fiscal years 1994 through 1997 for total
appropriations of $1,316,000 for the 4-year period.
Members of the International Arid Lands Consortium have provided
funds to support the consortium office in Tucson, Arizona, and for
printed materials as needed. Each member has provided travel and
operations support for semi-annual meetings, teleconferences, and other
related activities. In fiscal years 1993-1996, $60,000 in state
appropriations were provided. Industry provided $84,083 and $100,000
and $25,000 in fiscal years 1993, 1995 and 1996, respectively. Amounts
are not yet available for fiscal year 1997.
Research is currently being conducted at the University of Arizona,
South Dakota State University, Texas A&M University, Kingsville, New
Mexico State University, University of Illinois, and several research/
education institutions in Israel. Research projects started in 1993
have been completed. The projects started in 1994 and 1996 are expected
to be completed within 6 months to 3 years depending upon the nature of
the research or demonstration projects. Several demonstration projects
were completed and 4 international workshops were held during 1994
through 1996. Keeping with the Administration's policy of awarding
research grants competitively, no further Federal funding for this
grant is requested.
This project is evaluated annually based on an annual progress
report and agency participation in the Consortium Board of Directors
meeting. The cognizant staff scientist has reviewed the project and
determined that the research is conducted in accordance with the
mission of the agency.
iowa biotechnology consortium
This consortium is the focal point for cooperative biotechnology
research endeavors between Iowa State University, the University of
Iowa and the City of Cedar Rapids, Iowa to develop and test methods to
improve wastewater treatment processes for agricultural wastes, and
when possible, to convert by-product materials in agricultural wastes
into useful new products. The overall objectives of this research are
to conduct fundamental and applied research aimed at enhancing the
recovery and utilization of byproduct materials through studies
involving fermentation, enzyme catalysis and bioprocessing. The
expectation is that technologies will be developed from the research to
reduce the burden of agricultural bioprocessing wastes on municipal
waste management systems and to transform these wastes into
commercially viable products. Developments in biotechnology have
allowed for the development of improved management systems that
increase the capacity and sophistication of agricultural waste
processing. These researchers believe that technological breakthroughs
are possible to deal effectively with the increasing burden of
agricultural wastes and that useful byproduct materials can be
recovered and recycled through bioprocessing of wastes, especially
fermentation wastes. In view of significant needs for research in high
priority national interest topics such as pest management systems,
funds are not proposed to continue this Special Research Grant. At the
discretion of the State, Hatch Act or other funding could be used to
support this research.
The original goals of this project were aimed at enhancing the
recovery and utilization of by-product materials arising from new and
emerging industries using biotechnology. Recycling agricultural wastes,
isolating useful byproducts and developing value added processing
remain the primary thrusts of the project. The Consortium has
established a network of researchers to assist them in finding uses for
the by-product streams as concentrated steepwater and to find methods
to concentrate by-products for industrial uses. The Consortium is also
making important progress in the bioconversion, biocatalysis, membrane
concentration, and bioseparation of fats and carbohydrates.
Grants have been awarded from funds appropriated as follows: fiscal
year 1989, $1,225,000; fiscal year 1990, $1,593,000; fiscal year 1991,
$1,756,000; fiscal year 1992, $1,953,000; fiscal year 1993, $2,000,000;
fiscal year 1994, $1,880,000; fiscal years 1995-1996 $1.,792,000 each
year; and in fiscal year 1997, $1,738,000. A total of $15,729,000 has
been appropriated.
Non-federal funds and sources provided for this grant were as
follows: $623,803 from the State of Iowa, $42,813 from the city of
Cedar Rapids in 1991; $768,287 from the State of Iowa, and $365,813
from the city of Cedar Rapids in 1992; $858,113 from the State of Iowa,
and $170,000 from the city of Cedar Rapids in 1993; $841,689 from the
State of Iowa, and $36,000 from the City of Cedar Rapids in 1994; and
$1,016,505 from the State of Iowa, and $36,000 from the city of Cedar
Rapids in 1995.
Research is being conducted at Iowa State University and the
University of Iowa, in collaboration with the City of Cedar Rapids. The
Consortium was originally formed between the City of Cedar Rapids and
the participating universities to assist the City in dealing with
wastes associated with corn and oat processing and milling,
biocatalysis to produce high-fructose syrups, and one of the largest
fermentation facilities in the world. No firm date was established to
complete this work. The researchers have worked closely with the City
and the industries generating these wastes and have made significant
progress in analyzing the waste streams and in devising laboratory
procedures for extracting useful products. The City of Cedar Rapids is
planning to invest funds from other sources in special waste treatment
facilities to conduct large scale tests of new treatment methods.
Keeping with the Administration's policy of awarding research grants
competitively, no further Federal funding for this grant is requested.
The Iowa Biotechnology Consortium was evaluated for scientific
merit by an agency peer review panel on January 7, 1997. The panel
recommended approval of the project pending receipt of supplemental
information. The Consortium was also featured in a biotechnology
special grant seminar hosted by the agency on December 16, 1996 at
which the principal investigator presented research progress and
highlights to an audience of agency scientists, administrators, and
awards management staff.
jointed goatgrass
Research is being conducted on control systems for jointed
goatgrass in wheat production including integrated cultural management,
seed bank studies, and modeling for management conducted as sub-
projects by several states. The premier research project continues to
be an ``Integrated Management'' study being conducted across states in
the Midwest and west. In this study, jointed goatgrass management is
being evaluated based on planting dates, planting density, economic
thresholds, and competitive varieties. Research is also being conducted
on crop rotations, biological control, seed production and spread, and
the development of computer-based decision aids. All funded work has a
technology transfer plan and a national coordinator for technology
transfer to insure that growers are fully informed about all options
for managing this devastating weed. The National Technology Transfer
Coordinator has been hired, with the concurrence of a steering
committee, and that person is housed at the University of Nebraska. To
maximize cooperation among scientists, an annual meeting is held among
all investigators and the national steering committee to strengthen
collaborations and optimize the distribution of limited funds.
Jointed goatgrass infests nearly five million acres of winter wheat
in the west and Midwest and is spreading unchecked. It costs U.S. wheat
growers an estimated $145 million annually. Control of jointed
goatgrass in wheat is impossible with current methods because its seed
survives in the soil for five or more years. Jointed goatgrass has
increased rapidly in the past 20 years because of the widespread
adoption of conservation tillage systems. Jointed goatgrass
proliferated in such reduced tillage systems, and it seriously impedes
the universal adoption of such practices. The research involves
scientists from other states. In view of significant needs for research
in high priority national interest topics such as pest management
systems, funds are not proposed to continue the Special Research Grant.
At the discretion of the state, Hatch Act or other funding could be
used to support this research. The principal researcher and the
National Wheat Growers Association believe this research is of national
and regional importance.
The goal of this project is to reduce the devastating effect of
jointed goatgrass on wheat production and quality and to prevent its
continued spread into new, non-infested areas. A jointed goatgrass
population model has been constructed including a post-harvest (fall)
seed bank, spring seed band, and fall and spring germination, seeding
mortality, mature plants and seed production. The underlying jointed
goatgrass population model has been constructed with a vision that the
weed management strategies are going to be long-term in nature and be
focused on the impact of crop rotation, tillage and weather on jointed
goatgrass population dynamics.
The work supported by this grant began in fiscal year 1994. The
appropriation for fiscal year 1994 was $329,000, and for fiscal years
1995-1997, $296,000, each year. A total of $1,217,000 has been
appropriated.
The non-federal funds and sources provided for this grant were as
follows: for 1994, $82,198 state appropriations, $82,256 from industry,
and $14,871 miscellaneous; for fiscal year 1995, $67,442 state
appropriations, $38,496 from industry and $13,304 miscellaneous; and
for fiscal year 1996, an estimated $70,000 state appropriations,
$50,000 from industry, and $14,000 miscellaneous.
The research is being conducted by University scientists in the
states with serious infestations including Washington State
University--the principal coordinating institution--Colorado, Kansas,
Nebraska, Oklahoma, Utah, Oregon, Idaho, Montana, Wyoming, and South
Dakota. The project was initiated to accomplish significant results in
about five years. The original objectives are being met, and the
researchers anticipate that the original work may be completed in
fiscal year 1999. Keeping with the Administration's policy of awarding
research grants competitively, no further funding for this grant is
requested.
Each year the grant is peer reviewed and reviewed by CSREES's
senior scientific staff.
landscaping for water quality, georgia
The project is a comprehensive multi-institution, multi-agency,
private producer partnership directed by the University of Georgia. The
researchers believe it will lead to development of management and
siting guidelines for animal agriculture based on landscape and
watershed scale environmental quality considerations. Participating
institutions and agencies are the University of Georgia, the Joseph W.
Jones Ecological Research Center, the Middle South Georgia Soil and
Water Conservation District, the USDA Agricultural Research Service,
the USDA Natural Resources Conservation Service, the USDA Cooperative
State Research, Education, and Extension Service, and the Georgia
Department of Natural Resources. Growers from Brooks and Thomas
counties, Georgia are key partners in the project. The
multidisciplinary research team believes that the efficiency of modem
confinement-based livestock feeding and production facilities and
prevailing economies of scale have led to concentration of these
facilities in several regions of the United States, including the
Southeast. This regional concentration of animal production and
processing has frequently led to degradation of regional water quality
resulting from the excessive discharge of nutrients, organic matter,
and pathogens to receiving waters. One factor contributing to these
problems in the Southeast has been the historical concentration of
animal processing and confinement production facilities in regions with
inadequate crop land for proper management of manure resources. This
research project may provide the knowledge base for the integration of
increased animal production into a regional agricultural system without
sacrificing water quality. The findings will be immediately applicable
to the Southeast. In view of significant needs for research in high
priority national interest topics such as pest management systems,
funds are not proposed to continue this Special Research Grant. At the
discretion of the state, Hatch Act or other funding could be used to
support this grant.
The goal of this research project is to provide the knowledge base
for the integration of increased animal production into a regional
agricultural system without sacrificing water quality. The goal will be
met by completing five specific objectives over a period of five years.
The proposed research is on schedule. Since the project began on
February 1, 1996, significant progress has been made on three of the
five objectives. Work on the final two objectives will begin once
fiscal year 1997 funds become available. Specific accomplishments
include:
1. Completed installation and began sampling for chemical and
biological water quality parameters at seven stream monitoring sites in
the 390 square kilometer Piscola Creek Watershed, and continued
sampling eight stream monitoring sites in the 340 square kilometer
Little River Research Watershed.
2. Nearing completion of Geographical Information System databases
for these two watersheds including information on soils, hydrography,
topography, and landcover.
3. Began compiling a database listing all regulations, guidelines,
and recommended management practices pertaining to animal agriculture
and environmental quality in the southeast region.
The work supported by this grant began in fiscal year 1996 and the
appropriation for fiscal years 1996 and 1997 was $300,000. A total of
$600,000 has been appropriated. Information provided by the University
indicates that $202,000 in state funds will be provided to support this
grant during fiscal years 1996 and 1997. Similar amounts of state
support are anticipated for future years. In addition, funds will be
expended by the other participating nonfederal institutions in support
of this grant.
This research is being conducted by an interdisciplinary team of 19
scientists led by researchers at the University of Georgia's National
Environmentally Sound Production Agriculture Laboratory in Tifton and
Athens, Georgia. The experimental aspects of the project are being
conducted in the coastal plain region of Georgia in watersheds that are
representative of southern Georgia, southeast Alabama, and north
central Florida. The anticipated completion date for the original
objectives of the project was January 31, 1998. As discussed earlier,
significant progress has been made on these objectives and they are on
schedule. The anticipated completion date of additional or related
objectives is January 31, 2001. Keeping with the Administration's
policy of awarding research grants competitively, no further Federal
funding for this grant is requested. Research could be continued at the
State's discretion using formula or other funds.
As this project is still in its first year, a comprehensive
external evaluation has not yet been conducted. However, the principal
researcher is working with us to schedule an evaluation during 1997.
livestock and dairy policy, new york and texas
The purpose of this grant is to assess the possible economic
impacts on the U.S. livestock, poultry, and dairy sectors from various
macroeconomic, farm, environmental, and trade policies and new
technologies. Both Cornell University and Texas A&M University conduct
analyses of these policies and disseminate the information to
policymakers, farmers, and agribusinessmen. Cornell focuses on dairy
policies, and Texas A&M focuses on policies affecting livestock and
poultry. Information on the implications of new and alternative farm,
trade, and macroeconomic policies affecting the livestock and dairy
sectors is of special interest to policy-making officials, farmers, and
others. Such information enables farmers and agribusinessmen to make
necessary adjustments to their operations to enhance profitability and
for public officials to consider alternatives to sustain adequate
supplies and minimize public program costs. In view of significant
needs for research in high priority national interest topics such as
improved pest management systems, funds are not proposed to continue
this Special Research Grant. At the discretion of the States, Hatch Act
or other formula funding could be used to support this research.
The original goal was to establish a specialized research program
that could provide timely and comprehensive analyses of numerous policy
and technological changes affecting livestock and dairy farmers and
agribusinessmen and advise them and polieymakers promptly of possible
outcomes. This goal has been achieved. The program continues to provide
assessments and evaluations of provisions and proposed changes in
agricultural policies, the General Agreement on Tariffs and Trade, and
the North American Free Trade Agreement; various income and excise tax
measures; and alternative pricing measures for milk. The institutions
are involved in several current studies relating to dairy provisions in
the 1996 farm legislation. Both institutions maintain extensive
outreach programs to disseminate results throughout the United States.
Grants have been awarded from funds appropriated as follows: fiscal
year 1989, $450,000; fiscal year 1990, $518,000; fiscal years 1991-
1993, $525,000 per year; fiscal year 1994, $494,000; and fiscal years
1995-1997, $445,000 each year. A total of $4,372,000 has been
appropriated.
The non-federal funds and sources provided for this grant are as
follows: $37,420 State appropriations in fiscal year 1991; $162,086
State appropriations and $133,278 product sales for a total of $295,364
in fiscal year 1992; and $301,817 State appropriations, $1,412
industry, and $7,121 miscellaneous for a total of $310,350 in fiscal
year 1993; $24,702 State appropriations, and $5,961 industry for a
total of $30,663 in fiscal year 1994; $235,526 State appropriations for
fiscal year 1995; $250,000 in State appropriations for fiscal year
1996; and approximately $245,000 in State funding for fiscal year 1997.
The research is being conducted at Cornell University and Texas A&M
University. The original objectives of this project have been achieved.
In keeping with the Administration's policy of awarding research grants
competitively, no further Federal funding for this grant is requested.
We have conducted no formal evaluations of this project. Annual
proposals for funding, however, are carefully reviewed and work
progress is noted. Our agency contact is also in regular contact with
principal researchers at each institution to discuss progress toward
project objectives.
lowbush blueberry research, maine
Interdisciplinary research is being conducted on many aspects of
lowbush blueberry culture and processing includes investigation into
factors affecting processing quality, biological control of insect
pests, sustainable pollination, weed, disease and fertility management,
cold hardiness and ground water protection. Maine produces 99 percent
of all lowbush blueberries or 33 percent of all blueberries in the
United States. This work is of major local interest, and helps maintain
the continued availability and high quality of this native fruit
commodity. In view of significant needs for research in high priority
national interest topics such as improved pest management systems,
funds are not proposed to continue this Special Research Grant. At the
discretion of the State, Hatch Act or other funding sources could be
used to support this research. In addition, future efforts will be made
to collaborate with IPM regional and state representatives in finding
solutions to the specified pest concerns.
The original research goal was to provide research answers to
unique lowbush blueberry production, pest and processing problems.
Research to date indicates that the field sanitizer was able to use
heat to control insect pests without adversely affecting plant growth,
providing a nonchemical alternative to pest management. Eumenid wasps
were found to control red striped fireworm, providing a potential
biological control. Native leafcutter bees and alfalfa leafcutter bees
were found to increase lowbush blueberry fruit set and yield, providing
an alternative to imported honeybees. Clonal variation was found to
affect stem and flower bud hardiness that will prove to be important in
clonal selection for planting. Control of monolina disease was found in
using 4 ounces of propiconazole instead of 24 ounces of triforine
thereby reducing the chemical needed for control of this disease. Boron
and calcium were found to have more influence on the ability of the
stigma to stimulate pollen germination than the germinability of the
pollen grains themselves. A mechanical harvester was found to be
effective and had yields and fruit quality comparable to hand harvest,
providing growers with a more efficient tool to harvest blueberries.
Economic weed thresholds have been determined for weed species, thereby
giving growers a method to determine when to use control measures.
Mowing proved as effective as wiping to suppress two of these species,
providing a non-chemical control alternative. A rope wick wiper
effectively controls weeds growing higher than blueberry plants without
injuring the crop. Pesticide residues in lowbush blueberries were found
to be well below federal tolerances. Carboxymethyl cellulose and
various gums were found to control berry leakage, thereby improving
quality for use in baked products. Products for use in food industry
are being extracted from cull berries, thereby improving utilization
and reducing waste.
Grants have been awarded from funds appropriated as follows: fiscal
year 1990, $170,000; fiscal year 1991, $202,000; fiscal years 1992 and
1993, $185,000 per year; fiscal year 1994, $208,000; and fiscal years
1995, 1996, and 1997 at $220,000 each year. A total of $1,610,000 has
been appropriated. Direct industry support from blueberry tax funds for
1996 is about $65,000.
Research is being conducted at the University of Maine. The
original objectives have not yet been met. The University of Maine
researchers estimate that the project will be concluded at the end of
fiscal year 2001. Keeping with the Administration's policy of awarding
research grants competitively, no further Federal funding for this
grant is requested. Research could be continued at the State's
discretion using formula funds.
The agency evaluates this project on a yearly basis as funding is
renewed. Project proposals are peer reviewed by the University of Maine
review mechanism. Progress reports are submitted to the Cooperative
State Research, Education, and Extension Service on a yearly basis as
part of the review of the proposed project.
maple research, vermont
The research increased understanding of how water moves from the
soil into and through the maple trees, affecting tree growth and sap
production. It examined the relationship of maple decline to acid
precipitation. It measured the effectiveness of various fertilizer
combinations in improving the health of declining maple trees. It
identified sources of lead contamination in maple products and began
testing lead-free equipment and possible commercial methods for
removing lead from maple syrup. Maple products are an important source
of seasonal income in maple-growing areas of rural America. Identifying
the source of contamination during processing and identifying
commercial methods to remove lead from products is important to
assuring consumers that these food products are not harmful. In view of
significant needs for research in high priority national interest
topics such as improved pest management systems, funds are not proposed
to continue this Special Research Grant. At the discretion of the
State, Hatch Act or other funding sources could be used to support this
research. The goal of this research is to conduct research on maple
tree physiology, management of sugar maple stands, and related aspects
of the maple industry to benefit the maple industry in Vermont and the
Northeast. The U.S. Department of Agriculture approved an amendment to
these goals to permit the research to focus on lead in maple products.
Grants have been awarded from funds appropriated as follows: fiscal
year 1985, $100,000; fiscal years 1986-1987, $95,000 per year; fiscal
years 1988-1989, $100,000 per year; fiscal years 1990-1993, $99,000 per
year; fiscal year 1994, $93,000; and fiscal years 1995-1997, $84,000
each year. A total of $1,231,000 has been appropriated.
The non-federal funds and sources provided for this grant were as
follows: $52,220 state appropriations and $10,345 product sales in
1991; $49,450 state appropriations and $18,950 product sales in 1992;
$49,575 state appropriation and $23,860 product sales in 1993; $44,543
state appropriation, $29,321 product sales, and $25,000 local support
in 1994; $60,856 state appropriation, $12,000 product sales, and
$19,090 local support in 1995; $83,000 state appropriation and $15,000
product sales in 1996; and $67,000 state appropriation, $11,000 local
support, and $15,000 product sales in 1997.
This research is being conducted at the Vermont Agricultural
Experiment Station. The work relative to maple tree physiology and
management of maple stands has been completed so far as this project is
concerned, but it continues under sponsorship of the U.S. Forest
Service. The new objective of identifying sources of heavy metals in
maple products and reducing them is underway. Anticipated completion
date is 1999. Keeping with the Administration's policy of awarding
research grants competitively, no further Federal funding for this
grant is requested.
This project is evaluated annually by the U.S. Department of
Agriculture through review of the project proposal and any previous
accomplishments. Although satisfactory progress was being made on the
tree physiology and maple tree management aspects of the project, the
project was amended to focus on lead in maple products.
michigan biotechnology consortium
The objective of the Michigan Biotechnology Consortium's research
program is to develop bioprocessing technology to manufacture products
from agricultural raw materials, to increase the utilization of raw
materials, reduce surpluses, and to degrade agricultural and associated
wastes, thereby decreasing environmental costs of agricultural products
and processes. Bioprocessing may include fermentation, an enzymatic
step, chemical catalysis, or physical modification of agricultural raw
materials. The principal researcher believes the results from the
research to develop bioprocessing technology to manufacture value-added
products from agricultural raw materials, which increases their
utilization and reduces agricultural commodity surpluses and
environmental costs, will contribute to regional and national
priorities. In view of significant needs for research in high priority
national interest topics such as improved pest management systems,
funds are not proposed to continue this Special Research Grant. At the
discretion of the State, Hatch Act or other funding could be used to
support this research.
The original goal of this research remains to select and develop
market-viable technologies that will form the basis of new companies,
new jobs, and additional tax revenues produced for state, local and
Federal governments. The Michigan Biotechnology Institute and Michigan
State University have succeeded in developing numerous technologies
that are now in the marketplace.
Examples include the following: A process was developed to produce
lactic acid through fermentation using corn as the feedstock resulting
in a polymer for biodegradable plastics and a disinfectant. The
properties of the polymer make it useful for non-woven applications
such as medical packaging, clear blister bags, diapers, etc. Corn was
used as a feedstock to develop plant growth formulations to enhance
plant growth and productivity and reduce nitrogen fertilizer
requirements. Growth promoters for high volume or high value crops have
the potential for productivity increases of 15 percent and a reduction
in nitrogen fertilizer use of 25 percent. Biodegradable plastic resins
developed from cornstarch were made to produce compostable films for
agricultural mulch and other soluble films, and for cellulase-base
engineered thermoplastic resine. Biodegradable plastic resins from
cornstarch were also developed for moldable products such as disposable
cutlery, plastic containers, toys and toothbrushes. The market for
resins for use in formulation and extrusion of plastics for all
applications is in excess of $2 billion annually. Corn was also used
for the development of all-natural flavors and derivatives including a
salty flavor compound that can be produced to taste in non-sodium and
non-potassium forms. Low-cost, readily-available carbohydrates were
used to produce high-quality, high-value optically-pure chiral
intermediates for the pharmaceutical and agrochemical industries. A
sand/manure separation system for dairy farmers was developed to cost-
effectively separate manure from sand and recycle both components. Many
of these products are being explored for commercial development through
licensing agreements with industrial partners or new company startups.
In addition, there are many agri-based industrial products under
development including: several succinate-based green chemicals for
surfactants and detergents, new food ingredients and flavors, paint
removers, adhesives, lubricants, and plastic resins; green solvents
from fermentation of corn-derived materials; ethanol produced from
cellulose; natural food preservatives, improved enzymes for processing
starch and fructose production, food flavors and pigments, feed
ingredients to improve digestibility of forage-based animal feed;
biomass-based animal feeds; and agricultural waste treatment processes
to improve methods to clean up herbicides and pesticides.
Grants have been awarded from funds appropriated as follows: fiscal
year 1989, $1; fiscal year 1990, $2,160,000; fiscal year 1991,
$2,246,000; fiscal years 1992-1993, $2,358,000 per year; fiscal year
1994, $2,217,000; fiscal year 1995, $1,995,000; and fiscal years 1996
and 1997, $750,000 per year. A total of $16,584,000 has been
appropriated.
The non-federal funds and sources provided for this grant were as
follows: $1,750,000 in State of Michigan appropriations, $160,000 from
industry, and $1,000,000 from miscellaneous in 1991; $1,750,000 in
State of Michigan appropriations, $175,000 from industry, and
$1,000,000 from miscellaneous in 1992; $1,750,000 in State of Michigan
appropriations and $100,000 from industry in 1993; $1,750,000 in State
of Michigan appropriations, $175,000 from industry, and $100,000 from
miscellaneous in 1994; and $200,000 in State of Michigan appropriations
and $2,035,000 from industry in 1995; $1,250,000 in State of Michigan
appropriations and $350,000 from industry in 1996. A total of
$13,545,000 has been provided to support this work by non-federal
sources.
The research is being conducted on the campus of Michigan State
University and at the Michigan Biotechnology Institute. The Institute
had reported specific milestones that it intended to be accomplished
within the five-year period ending in fiscal year 1998. Keeping with
the Administration's policy of awarding research grants competitively,
no further Federal funding for this grant is requested. Research could
be continued at the State's discretion using formula or other funds.
The Michigan Biotechnology Institute was evaluated for scientific
merit by an agency peer review panel on January 7, 1997. The panel
recommended approval of the project pending receipt of supplemental
information on administrative aspects of the project. The Institute was
also featured in a biotechnology special grant seminar hosted by the
agency on December 16, 1996 at which the principal investigator
presented research progress and highlights to an audience of agency
scientists, administrators, and awards management staff.
midwest advanced food manufacturing alliance, nebraska
The stated purpose of the Midwest Advanced Food Manufacturing
Alliance is to expedite the development of new manufacturing and
processing technologies for food and related products derived from
United States produced crops and livestock. The Alliance involves
research scientists in food science and technology, food engineering,
nutrition, microbiology, computer science, and other relevant areas
from 12 leading Midwestern universities and private sector researchers
from numerous U.S. food processing companies. Close cooperation between
corporate and university researchers assure that the latest scientific
advances are applied to the most relevant problems and that solutions
are efficiently transferred and used by the private sector. Fiscal year
1997 funds will support research from June 1, 1997 through May 31,
1998. The principal researcher believes the food manufacturing industry
is the number one manufacturing industry in the Midwestern region and
that opportunities for trade in high value processed food products will
grow exponentially on a worldwide basis. The researcher believes the,
Alliance is positioned to fill the void in longer range research and
development for the food industry. In view of significant needs for
research in high priority national interest topics such as improved
pest management systems, funds are not proposed to continue this
Special Research Grant. At the discretion of the State, Hatch Act or
other funding could be used to support this research.
The goal, as stated previously, was to expedite the development of
new manufacturing and processing technologies for food and related
products derived from United States produced crops and livestock. This
is accomplished by conducting research proposal competition among
faculty from the 12 participating universities to find research
projects where matching funds are available from industry. Fourteen
(14) projects were funded from fiscal year 1994 funds with completion
and final reports due by May 1, 1996. Ten (10) projects were funded
from fiscal year 1995 funds with anticipated completion and final
reports due by August 31, 1997. Ten (10) projects were also funded from
fiscal year 1996 funds with anticipated completion and final reports
due by May 31, 1998. Proposals are reviewed for scientific merit by
independent scientists, and final selection of projects includes
consideration of industrial interest and commitment of non-Federal
matching funds.
The work supported by this grant began in fiscal year 1994. The
appropriation for fiscal year 1994 was $470,000, and for fiscal years
1995-1997, $423,000 each year. A total of $1,739,000 has been
appropriated. Industry matching funds were $823,148 in fiscal year
1994, $414,164 in fiscal year 1995, and $576,600 in fiscal year 1996.
The work is being coordinated by the Nebraska Agricultural
Experiment Station at Lincoln. Specific research projects are also
being conducted at seven (7) other universities that are part of the
Alliance. Keeping with the Administration's policy of awarding research
grants competitively, no further Federal funding for this grant is
requested. Research could be continued at the State's discretion using
formula funds.
An agency science specialist conducts a merit review of the
proposal submitted in support of the appropriation on an annual basis.
A review of the proposal was conducted on December 20, 1996. The
principal investigator has provided descriptions of projects funded by
this grant.
midwest agricultural products, iowa
The Midwest Agribusiness Trade Research and Information Center does
applied research to improve the global competitiveness and
marketability of agricultural products produced in the Midwest and
disseminates the results to small and medium-sized agribusinesses.
Projects include analyses of potential markets for U.S. agricultural
products and equipment/technology in several countries; attitudes of
foreign consumers; and development of new/improved U.S. products to
meet foreign needs. The principal researcher believes that agribusiness
firms in the United States, especially small to medium-sized firms,
have a large unrealized potential to expand export sales and foreign
business ventures. These untapped opportunities exist in well-
established growth markets in the Pacific Rim and in newly opening
markets such as Mexico, China, and Eastern Europe. The reluctance of
small to medium-sized firms to explore these market opportunities is,
in part, due to the high cost of market information and analysis and
the perceived high risk of doing business in new markets with
unfamiliar partners. In view of significant needs for research in high
priority national interest topics such as improved pest management
systems, funds are not proposed to continue this Special Research
Grant. At the discretion of the state, Hatch Act or other funding could
be used to support this research.
The goal is to enhance the export of agricultural commodities,
value-added products, and equipment produced by Midwestern agribusiness
firms through research and education programs utilizing close-working
relationships with those firms. In the past year, several studies were
completed and distributed to interested firms, and new ones were
initiated. Completed studies included: an analysis of conditions and
prospects for agribusiness ventures in Egypt; market analyses for U.S.
agricultural products in Cameroon, Senegal, and Cote d'Ivoire; an
assessment of market opportunities for food processing equipment in
China; Mexican consumer response to U.S. pork products; comparative
advantage of U.S. pork in North American markets; impact of NAFTA on
Midwest beef industry; an evaluation of the need for government
regulation for maintaining or improving the quality of 12 export
commodities; case studies of 16 outstanding food and agricultural
exporters; evaluation of 60 varieties of corn for dry milling for the
Mexican market; suitability of microsoy flakes for markets in Pacific
Rim and African countries; and use of the Internet for marketing goods
and services. In addition several seminars and conferences were held,
``Global Connections'' newsletter was published regularly, and business
contacts database kept up to date. As a result of much work to
establish trading relationships with China, the Des Moines sister-city
of Shijiazhuang, China established a trade office in Des Moines.
The work supported by this grant began in fiscal year 1992. The
appropriation for fiscal years 1992-1993 was $700,000 per year; fiscal
year 1994, $658,000; and fiscal years 1995-1997, $592,000 per year. A
total of $3,834,000 has been appropriated.
The non-federal funds and sources provided for this grant are as
follows: $185,495 State, appropriations and $373,897 industry for a
total of $559,392 in fiscal year 1992; $183,192 State appropriations
and $318,966 industry for a total of $502,158 in fiscal year 1993;
$127,948 State appropriations and $500,394 industry for a total of
$628,342 in fiscal year 1994; $258,053 State appropriations and
$389,834 industry for a total of $647,887 for fiscal year 1995;
$165,425 State appropriations for fiscal year 1996; and $162,883 State
appropriations for fiscal year 1997. Industry contributions continue
but were not reported for 1996 and 1997.
The program is carried out by Iowa State University. The original
proposal in 1994 was for a period of 24 months, however, the objectives
for expanding the export capacity of small to medium-sized agribusiness
firms is an ongoing regional and national concern. The current phase of
the program will be completed in 1999. In keeping with the
Administration's policy of awarding research grants competitively, no
further Federal funding is requested for this grant.
CSREES performed a merit review of the project in January 1997 as
it evaluated the project proposal for 1997 and concluded that the
Midwest Agribusiness Trade and Research Center at Iowa State University
has a record of producing research and trade information for
agribusinesses in the Midwest and other states. Research results appear
in several professional journals and popular press.
milk safety, pennsylvania
The overall goal of the milk safety program is to provide insight
into factors that help ensure an adequate and safe milk supply. Toward
that end, the research has focused on factors that affect milk
production, processing, manufacturing, and consumption. Special
attention has been given to ways of preventing and/or treating
pathogens that enter the milk supply.
The principal researcher believes that the question of microbial
safety is of paramount interest to the milk/dairy industry at all
levels. Dairy products such as milk, nonfat dry milk, cheese, butter,
and cream have been associated with several large outbreaks of
staphylococcal food poisoning, and coagulase negative Staphylococcus
infections are one of the most common intramammary infections of dairy
cattle. Listeria monocytogenes is present in about 4 percent of raw
milk, and it has the potential to grow to dangerous levels during
refrigeration and storage, making pasteurization critical in preventing
foodborne illnesses from this organism. Bovine mastitis is the most
important infectious disease affecting the quality and quantity of milk
produced in the nation, costing producers an average $180 per cow per
year. The researchers believe ensuring safety of dairy products impacts
not only consumer health and confidence in the safety of the food
supply, but economic viability as well. In view of significant needs
for research in high priority national interest topics such as improved
pest management systems, funds are not proposed to continue this
Special Research Grant. At the discretion of the State, Hatch Act or
other funding could be used to support this research.
The research is aimed at minimizing or eliminating future foodborne
disease outbreaks from milk and dairy products. A key accomplishment
includes the discovery of potential approaches of enhancing natural
defense mechanisms of the bovine mammary gland through vaccination and
immunoregulation. Discoveries of factors influencing growth of
Staphylococcus aureus could be used to prevent or contain growth of
this pathogen in foods. Researchers have identified and sequenced a
gene from this bacterium that is essential for growth under stressful
conditions. A computer model of Listeria monocytogenes growth in dairy
foods under dynamic refrigeration conditions and during extended
storage is under development to provide producers and processors with a
proven technology for further enhancing the safety of fluid milk and
related products. Researchers have elucidated conditions that
significantly enhance the survival of Listeria monocytogenes during
heat challenge. Research also revealed that consumers having high
general concern about milk and dairy product safety and nutrition were
more likely to be female, to have lower levels of education, be non-
white and report more attention to scientific news, health and
nutrition news and news about government food safety regulatory
attention.
Grants have been awarded for milk consumption and milk safety from
funds appropriated as follows: fiscal years 1986 through 1989, $285,000
per year; fiscal year 1990, $281,000; fiscal year 1991, $283,000;
fiscal year 1992, $284,000; fiscal year 1993, $184,000; fiscal years
1994-1997, $268,000 per year. A total of $3,244,000 has been
appropriated for milk safety and milk consumption.
The University estimates that non-federal funds contributed to this
project include the following costs and salaries: $265,000 for fiscal
year 1991; $224,700 for fiscal year 1992; $142,600 for fiscal year
1993; and $252,168 for fiscal year 1995. No data are currently
available for fiscal years 1994 and 1996.
The research is being conducted at the Pennsylvania State
University. The researchers anticipate that research supported by this
grant should be concluded in 1999. Keeping with the Administration's
policy of awarding research grants competitively, no further Federal
funding for this grant is requested. Research could be continued at the
State's discretion using formula or other funds.
An agency science specialist conducts a merit review of the
proposal submitted in support of the appropriation on an annual basis.
Since the agency has not yet received the proposal in support of the
fiscal year 1997 proposal, the last review of the proposal was
conducted on March 8, 1996. At that time, the agency science specialist
believed that the projects addressed issues retained to safety of milk
and dairy food products, were scientifically sound, and that
satisfactory progress was being demonstrated using previously awarded
grant funds.
minor use animal drugs
The National Agricultural Program to Approve Animal Drugs for Minor
Species and Uses (NRSP-7) was established to obtain Food and Drug
Administration clearance of animal drugs intended for use in minor
species and for minor uses in major species. The funds for the special
research grant are divided between the four regional animal drug
coordinators and the headquarters at Michigan State University for
support of the drug clearance program. The NRSP-7 funds are being
utilized by the regional animal drug coordinators and by allocation to
State Agricultural Experiment Stations to develop data required for
meeting clearance requirements. Participants in the research program
consist of the regional coordinators, State Agricultural Experiment
Stations, USDA's Agricultural Research Service (ARS), the U.S.
Department of Interior, schools of veterinary medicine, and the drug
industry. Each year priorities are established for the various species
categories including small ruminants, game birds, fur-bearing animals,
and aquaculture species. The fiscal year 1996 grants terminate between
April 1997 and September 1998. The 1997 grant proposals have been
received and are being reviewed.
Animal agriculture throughout the U.S. has relied on chemical and
pharmaceutical companies to provide their industry with safe
efficacious drugs to combat diseases. The need for approval from FDA's
Center for Veterinary Medicine (CVM) for drugs to control diseases in
minor species and for minor uses in major species has increased with
intensified production units and consumer demand for residue-free meat
and animal products. The high cost incurred to obtain data required by
federal, regional, and local regulations to approve these drugs, when
coupled with limited economic returns, has limited the availability of
approved drugs for minor uses and minor species. The program provides
research needed to develop and ultimately culminate in drug approval by
FDA/CVM for the above purposes. The goals are accomplished through the
use of regional animal drug coordinators as well as a national
coordinator to prioritize the need, secure investigators at federal,
state and private institutions, and oversee the research and data
compilation necessary to meet federal regulations for approval. All
drug approvals are national, although industry use may be regional. For
example, aquaculture is concentrated in specific geographic sections of
the country. The Administration believes this research to be of
national, regional and local need.
The original NRSP-7 goal to obtain FDA clearance of animal drugs
intended for use in minor species and for minor uses in major species
remains as the dominant goal. In recent years, the research program has
expanded or given additional emphasis to aquaculture species, veal
calves and sheep. In addition, several new animal drug requests from
the game bird industry were received during the past year. The
importance of environmental assessment, residue withdrawals and
occupational safety have increasingly been given more attention during
the approval process to help assure consumer protection. To date, 282
drug requests have been submitted to the Minor Use Animal Drug Program
for clearance. Working in conjunction with many universities, the U.S.
Department of Interior, ARS, and numerous pharmaceutical companies, 24
research projects are now active and will be continued through 1997 to
establish data for clearances. Twenty four public master files have
been published in the Federal Register providing clearance for drug use
in minor species. Two additional public Gmaster files are currently
being completed and several others are under review by FDA. The Center
for Veterinary Medicine is cooperating and supporting this program to
the fullest extent. The program is a prime example of Federal
interagency cooperation in coordination with academic institutions,
pharmaceutical industries and conunodity interests to effectively meet
an urgent need.
Grants have been awarded from appropriated funds in the amount of
$240,000 per year for fiscal years 1982-85; $229,000 per year for
fiscal years 1986-1989; $226,000 for fiscal year 1990; $450,000 for
fiscal year 1991; $464,000 per year for fiscal years 1992 and 1993;
$611,000 for fiscal year 1994; and $550,000 for fiscal years 1995-1997.
A total of $5,7'41,000 has been appropriated.
The non-federal funds and sources provided for this grant were as
follows: $156,099 state appropriations. $29,409 industry, and $11,365
miscellaneous in 1991; $265,523 state appropriations, $1,182 product
sales, $10,805 industry, and $59 miscellaneous in 1992; $212,004 state
appropriations, $315 industry; and $103 miscellaneous in 1993; $157,690
state appropriations, and $7,103 miscellaneous in 1994; $84,359 state
appropriations in 1995; and $191,835 non-federal support in 1996.
The grants have been awarded to the four regional animal drug
coordinators located at Cornell University, the University of Florida,
Michigan State University and the University of California-Davis, and
to program Headquarters at Michigan State University. Research is
conducted at these universities and through allocation of these funds
for specific experiments at the State Agricultural Experiment Stations,
ARS, the U.S. Department of Interior, and in conjunction with several
pharmaceutical companies.
Selected categories of the Special Research Grants program address
important national/regional research initiatives. The overall
objectives established cooperatively with FDAL and industry are still
valid. However, specific objectives continually are met and revised to
reflect the changing priorities for FDA, industry, and consumers.
Research projects for this program have involved 20 different animal
and aquaculture species with emphasis given in recent years to research
on drugs for the expanding aquaculture industry and increasing number
of requests from the sheep, veal calf, and game bird industries. The
minor use animal drugs program involves research on biological systems
that by their nature are ever changing and representing new challenges
to agriculture. Especially with the new sensitivities about safety and
the environment, there is a high priority for continuation of these
ongoing projects.
The agency conducted a formal review of the Minor Use Animal Drug
Program in 1991. The program was found to be very productive and it was
recommended that increased financial support should be sought in order
to meet the national needs identified for the program. GAO also
conducted a review of the program in 1991 and recommended additional
support for the program. Each year the project is peer reviewed and
twice a year the agency and representatives of the program meet with
FDA to evaluate progress and to prioritize research. Biannually, a
workshop is held to identify priorities for the program whereby
producers, pharmaceutical companies, FDA, and researchers participate.
molluscan shellfish, oregon
The research under this program was initiated in fiscal year 1995.
A repository for the conservation of genetic material of molluscan
shellfish was established during the first year of the project. This
repository is serving as a source of genetic material for current
breeding programs aimed at commercial production of shellfish with
desirable traits. The researchers indicate that there is a national
need for a molluscan broodstock development program to benefit the
commercial industry through conservation, genetic manipulation and wise
management of the genetic resources of molluscan shellfish. In view of
the significant research needs in high priority national interest
topics such as improved pest management systems, funds are not proposed
to continue this research. At the discretion of the state, Hatch Act
funds or other funding sources could be used to support this research.
The goals of this research program are to establish a repository for
genetic materials of molluscan shellfish, to establish breeding
programs for commercial production of molluscan shellfish, and to
establish a resource center for the industry, researchers, and other
interested parties in the United States and abroad.
The work supported by this grant began in fiscal year 1995 with an
appropriation of $250,000; fiscal year 1996 was $300,000; and fiscal
year 1997 is $400,000. A total of $950,000 has been appropriated. The
university estimates a total of $135,454 of non-federal funding in
fiscal year 1995 primarily from state sources; in fiscal year 1996 no
cost sharing was provided.
Research will be conducted at Oregon State University, Rutgers
University, and the University of California at Davis. Although the
specific research objectives outlined in the original proposal were to
be completed in 1996, researchers anticipated that the original broad
objectives would be completed in 1999. Progress has been made on major
components of the research program. The anticipated completion date is
for the broad research objectives is still 1999.
The specific research outlined in the present proposal will be
completed in fiscal year 1997. Keeping with the Administration's policy
of awarding research grants competitively, no further Federal funding
for this grant is requested.
The agency evaluates the progress of this project on an annual
basis. The university is required to submit an accomplishment report
when the new proposal is submitted to CSREES for funding. The 1996
review indicated that the researchers were well qualified to conduct
the research, the research is being conducted in close cooperation with
the private sector.
multi-commodity research, oregon
The purpose of this research program is to provide agricultural
marketing research and analysis to support Pacific Northwest producers
and agribusiness in penetrating new and expanding Pacific Rim markets
for value-added products. The program examines the potential for
increasing the competitiveness and economic value added of Pacific
Northwest agriculture through improvements in food production,
processing, and trade by assisting decision makers in developing
economic and business strategies. The principal researcher believes
that Oregon and the other Pacific Northwest States produce a wide
variety of agricultural commodities and products with commercial
potential for export to Pacific Rim countries. Research and analysis is
necessary to guide agricultural producers and processors in assessing
these markets and developing market strategies and value-added
products, and marketing strategies tailored to specific Pacific Rim
markets. In view of significant needs for research in high priority
national interest topics such as improved pest management systems,
funds are not proposed to continue this Special Research Grant. At the
discretion of the State, Hatch Act or other funding could be used to
support this research. The principal researcher believes this research
to be of national, regional and local need.
The goal of this proposed research project is to gain better
scientific understanding of the Technical, economic and social
relationships that define Oregon's value-added agricultural sector, and
examine how these factors affect the economic performance of this
sector. Project objectives were to:
1. develop a pilot agricultural economic growth assessment model
for Oregon's farm and value-added agricultural products. While
developed as an Oregon-specific model, it is anticipated that the
resulting approach and methodologies will be applicable to other
Pacific Northwest state economies.
2. conduct and coordinate applied research focused on understanding
the factors affecting the global competitiveness of Oregon agriculture
and the roles of public policies influencing the long-term success of
the industry.
3. reassess and modify as necessary existing economic performance
benchmarks designated for the Oregon agricultural industry, and create
strategies and actionable targets for industry performance to be
achieved within defined time periods.
4. encourage and facilitate applied, industry-level research into
value-added agricultural trade, marketing and policy issues affecting
Oregon and the Pacific Northwest.
5. assess, on an on-going basis, related agricultural trade and
marketing research across multidisciplinary fields at Oregon State
University and other universities throughout the region. This will
include work with affiliated universities to establish research
projects that further the development of agricultural products,
processes, or international markets.
6. establish, in collaboration with the Asian wheat foods industry,
criteria for development of noodle of varieties best suited to Asian
markets. This will enhance the competitiveness of U.S. wheats in the
Asian wheat foods markets through the accurate description of wheat
quality characteristics and the exploitation of wheat blends, an
inherent strength of the U.S. multi-class wheat delivery system.
The research began in fiscal year 1993 with an appropriation of
$300,000. The fiscal year 1994 appropriation was $282,000, and fiscal
years 1995 through 1997 appropriations are $364,000 for each year. The
total amount appropriated is $1,674,000. The non-federal funding
provided for this grant was $168,824 State appropriations in fiscal
year 1992; $177,574 State appropriations in fiscal year 1993; and
$162,394 State appropriations in fiscal year 1994. Due to a change in
university policy, the university has not reported the amount of non-
federal funds appropriated for fiscal years 1995-1997.
The research program will be carried out at Oregon State University
in Corvallis, and at the Agricultural Marketing and Trade Program in
Portland, Oregon. This Special Grant is awarded on a year-by-year
basis. Thus, Oregon State University has traditionally requested funds
for this project on an annual basis and has budgeted the funds to
individual sub-projects on that basis. Progress on original objectives
is as follows: baseline data has been accumulated, an economic growth
assessment model is being formulated and tested, global competitiveness
is being assessed for value-added Pacific Northwest agricultural
products, targets for performance are being worked out with
agricultural industries, and many trade teams have been involved in
assessing the ability of U.S. based industries to meet the demands for
noodle production for Asian markets. Anticipated completion date is
1998. However, in keeping with the Administration's policy of awarding
research grants competitively, no further Federal funding is requested
for this grant. Research could be continued at the state's discretion
using formula funds.
The agency reviews progress each year when a new proposal is
submitted. We believe satisfactory progress is being achieved.
multi-cropping strategies for aquaculture, hawaii
In fiscal year 1993, the university redirected this research
program to address the opportunities of alternative aquaculture
production systems, including the ancient Hawaiian fish ponds on the
island of Molokai. The university has developed a community based
research identification process and has developed specific research
projects to be included in this program. Current research includes work
in the area of edible seaweed cultivation and the culture of the
Pacific threadfin, a species indigenous to Hawaii. Previous research
under this program led to the development of coproduction of shrimp and
oysters in aquacultural systems. The technology developed from this
program has been commercialized. The principal researchers indicate
that the primary need for this research is to assist the native
Hawaiians in improving the profitability and sustainability of the
ancient Hawaiian fish ponds and other appropriate aquaculture systems
as part of a total community development program. In view of
significant needs for research in high priority national interest
topics such as improved pest management systems, funds are not proposed
to continue this Special Research Grant. At the discretion of the
state, Hatch Act or other funding could be used to support this
research.
The original goal of this program was to develop technology for the
coproduction of shrimp and oysters in aquacultural production systems.
Research led to the development of oyster production systems that have
been field tested under commercial conditions. The current research
effort is aimed at developing sustainable commercial aquaculture
production systems on the island of Molokai. Hatchery techniques have
been developed for the culture of the Pacific threadfin. Techniques for
the culture of two edible aquatic plants have been refined.
Multidimensional field testing and evaluation of existing and restored
ancient Hawaiian fish ponds is currently underway.
This research was initiated in fiscal year 1987 and $152,000 per
year was appropriated in fiscal years 1987 through 1989. The fiscal
year 1990-1993 appropriations were $150,000 per year; $141,000 in
fiscal year 1994; and $127,000 in fiscal years 1995-1997, each year. A
total of $1,578,000 has been appropriated. The university reports a
total of $137,286 of non-federal funding for this program in fiscal
years 1991-1994, $318,468 in fiscal year 1995. The primary source of
non-federal funding was from state sources.
Research is being conducted through the University of Hawaii on the
island of Molakai. The completion date for the original project was
1993. The original objectives were met. The specific research outlined
in the current proposal will be completed in fiscal year 1998. Keeping
with the Administration's policy of awarding research grants
competitively, no further Federal funding for this grant is requested.
Research could be continued at the State's discretion using formula or
other funds.
The agency evaluates the progress of this project on an annual
basis. The university is required to provide an accomplishment report
when the new grant proposal is submitted to CSREES for funding. In
addition, in 1996 the CSREES program manager conducted a site visit to
Molokai to meet with the principal investigator and industry
cooperators. The 1996 review indicated that progress has been made in
the implementation of the program despite the challenges of developing
a community based program in such a unique social and cultural
environment.
national biological impact assessment program
The National Biological Impact Assessment Program was established
to facilitate and assess the safe application of new technologies for
the genetic modification of animals, plants and micro-organisms to
benefit agriculture and the environment. This program was established
in fiscal year 1989. During the last decade there has been an explosion
of new information produced by rapid advances in biotechnology and its
beneficial application to agriculture and the environment. The research
proposed for this program fulfills an important national need to
provide scientists easy access to relevant information that will
facilitate the preparation of scientific proposals that comply with the
oversight and regulatory requirements for testing potential
biotechnology products and foster the safe application of biotechnology
to benefit agriculture and the environment. This program supports the
agricultural and environmental biotechnology community by providing
useful information resources to scientists, administrators, regulators,
teachers and the interested public.
The original goal of the National Biological Impact Assessment
Program was to provide easy access to reliable information on public
health and environmental safety of agricultural biotechnology research.
Its objectives were to increase the availability, timeliness and
utility of relevant information to the biotechnology research
community; facilitate the compliance of biotechnology research with
oversight and regulatory requirements for testing biotechnology
products; and provide informational resources to the scientific
community that would foster the safe application of biotechnology to
agriculture and the environment. This same goal continues today. Each
year much new information is added and integrated into the computerized
database. The system has evolved to adapt new computer technologies and
is now available via internet and the World Wide Web. This computer-
based information system now includes texts of Federal biotechnology
regulations, proposed rules and policy statements; databases of biotech
companies, and research centers, institutional biosafety committees and
state regulatory contacts; resource lists of publications, directories,
bibliographies and meetings; monthly newsletters developed and
distributed by this program; relevant Federal Register announcements;
and links to other electronic information resources. In addition, this
program provides biosafety training through workshops for academic and
corporate scientists, biosafety officers and state regulators. A Field
Test Notebook has been developed as a reference text for these
workshops.
Grants have been awarded from funds appropriated as follows: fiscal
year 1989, $125,000; fiscal year 1990, $123,000; fiscal years 1991-
1993, $300,000 per year; fiscal year 1994, $282,000; and fiscal years
1995-1997, $254,000 per year. A total of $2,192,000 has been
appropriated.
The co-principal investigator of this grant is Head of the
Department of Biochemistry and Anaerobic Microbiology at Virginia
Polytechnic Institute and State University. The university contributes
its time to administer this grant which amounts to approximately $5,000
each year.
This grant award is with Virginia Polytechnic Institute and State
University. Former and current partners in the program include The
Pennsylvania State University, Louisiana State University, North
Carolina Biotechnology Center, University of Arizona, University of
Missouri, Michigan State University, Purdue University, and the
National Agricultural Library. There remains a continuing need to
address the safety of field testing of genetically modified organisms
to benefit agriculture and the environment. This continues to be a
rapidly expanding field. Increasing amounts of new information needs to
be properly integrated into the computerized information system each
year. This program has been very successful in providing essential,
updated information on the conduct of safe field experiments. Thus, the
program remains a high priority and needs to be continued.
The National Biological Impact Assessment Program was extensively
reviewed by an external panel of scientists in October 1994. The review
report was highly complimentary regarding the Information Systems for
Biotechnology funded by this special grant and recommended continuation
of this program. The fiscal year 1997 proposal was peer reviewed and
highly recommended for funding. Peer reviewers consistently conclude
that the Information Systems for Biotechnology supported by this grant
contains current, highly relevant, and useful information for the
biotechnology research community. Scientists rely on this database as a
source of current and accurate information in a rapidly changing field
of science.
nematode resistance genetic engineering new mexico
This research is designed to investigate naturally occurring
compounds from diverse sources that may confer pesticidal resistance if
introduced into agronomic plants. The main target pests are plant
parasitic nematodes. The work is using molecular biological techniques
to incorporate genes into agronomic plant which will shortens the time
frame to produce transgenic plants. Progress includes the a Diphtheria
A toxin has been engineered behind a root-knot promoter. The promoter
triggers the toxin to kill the nurse cell, which is necessary for
nematode development. Two proteinase inhibitor genes have been
constructed and have been inserted into crop plants. The expression
rate however is low at this time. Other genes that promote toxins have
been constructed and inserted into experimental and crops plants. The
bioassay with targeted pest appear very promising. The principal
researcher believes that the successful development of these techniques
and subsequence transfer of nematode resistant genes into agromic
plants will provide an environmentally-sound system for all plants
susceptible to plant parasitic nematodes. Because there are significant
needs for research in high priority national interest topics such as
improved pest management systems, funds are not proposed to continue
this Special Research Grant. At the discretion of the state, Hatch Act
or other funding could be used to support this research. The original
goal of this research was to provide an alternative approach for the
control of plant parasitic nematodes through the use of molecular
biological technologies to transfer pesticide resistant to plants. A
nematode-stimulated promoter element was engineered for insertion in
front of a bacteria toxin. A unique technique utilizing insect
intestinal membrane vesicles were used as tools for detection of
specific protein binding domains. The synthetic gene, CRY3A Bt has been
successful in field trials on potato and eggplants.
The work supported by this grant began in fiscal year 1991 and the
appropriations for fiscal years 1991-1993 was $150,000 per year;
$141,000 was appropriated in 1994: $127,000 in fiscal years 1995-1997,
each year. A total of $972,000 has been appropriated thus far.
The non-federal funds and sources provided for this grant were as
follows: $65,000 state appropriations in 1991; $62,000 in state
appropriations in 1992; $75,000 in state appropriations in 1994; and
$75,000 in 1995. For 1996, the University and the Plant Genetic
Engineering Laboratory are providing matching contributions in faculty
and staff salaries, facilities, equipment maintenance and replacement,
and administrative support. In 1997, there are no matching non-federal
funds.
Research is being conducted at the New Mexico State University, and
at collaborating universities in the region. The estimated completion
date for this project is estimated to be in 2001. Keeping with the
Administration's policy of awarding research grants competitively, no
further Federal funding for this grant is requested.
The last evaluation of this project was a merit review conducted
December 19, 1996. In summary, the overall goal of this project is to
use molecular biological techniques to develop pesticide capability in
plants of agronomic importance. The research accomplishments
demonstrated the feasibility of insertion of toxin genes into plants
for expression against nematodes. The use of the synthetic CRY3A Bt
gene has been successful in potato and eggplant in field trails.
nonfood agricultural products program, nebraska
This work focuses on the identification of specific market niches
that can be filled by products produced from agricultural materials,
developing the needed technology to produce the product, and working
with the private sector to transfer the technology into commercial
practice. Major areas of application include starch-based polymers, use
of tallow as diesel fuel, improvements in ethanol production, use of
vegetable oil as drip oil for irrigation wells, production of levulinic
acid, the extraction of wax from grain sorghum and production of
microcrystalline cellulose from crop biomass. The principal researcher
believes our ability to produce agricultural commodities exceeds our
needs for food and feed. These commodities are environmentally-friendly
feedstocks which can be used in the production of many biochemicals and
biomaterials that have traditionally been produced from petroleum. The
production of the commodities and the value-added processing of these
commodities is regional in scope. In view of significant needs for
research in high priority national interest topics such as improved
pest management systems, funds are not proposed to continue this
Special Research Grant. At the discretion of the state, Hatch Act or
other funding could be used to support this research.
The objectives of the Center are to identify niche markets for
industrial utilization of agricultural products, improve and develop
conversion processes as needed for specific product isolation and
utilization, provide technical, marketing and business assistance to
industries, and coordinate agricultural industrial materials research
at the University of Nebraska, Lincoln. Accomplishments include
developing a formula that combines starch from corn and wheat, plastic
resin from polystyrene and polymethylmethacrylate and compatibilizing
agents to make loose fill packaging materials. Collaborations with the
private sector to optimize the technology and to initiate a startup
company are ongoing. Crude degummed and dried soybean oil has been
proven to be an effective drip oil for irrigation wells. Archer
Petroleum in Omaha is developing a marketing plan for regional
distribution through 2500 distributors. Crude beef tallow has been
converted to methyl esters and studied as diesel fuel. Fuel tests and
extensive engine studies have shown it to be compatible with petroleum
diesel and diesel engines. Starch has been converted to levulinic acid
using acid hydrolysis and an extruder. As an antifreeze, levulinic acid
has a freezing point of -18 deg.C, which is not as low as conventional
antifreeze but is environmentally friendly. Other industrial uses of
levulinic acid need to be explored. Protein films have been made and
evaluated for potential use as coatings and in laminated packaging
materials. These films may have a unique application for use as
sprayed-in-place agricultural mulches. Seeds or plants could be easily
planted by puncturing the film on the soil surface. Preliminary studies
show significant potential for such film applications in controlling
soil erosion.
The funding levels for this project are $109,000 in 1990; $110,000
per year in fiscal years 1991-1993; $103,000 in fiscal year 1994;
$93,000 in fiscal year 1995; and $64,000 in fiscal years 1996 and 1997.
A total of $763,000 has been appropriated.
The non-Federal funding for this project is: in fiscal year 1992,
$315,000, fiscal year 1993, $330,000, fiscal year 1994, $330,000,
fiscal year 1995, $309,000, and fiscal year 1996, $251,000 and fiscal
year 1997 $250,000. These funds were from Nebraska Corn, Soybean,
Wheat, Sorghum and Beef Boards, World Wildlife Fund, Nebraska Bankers
Association, United Soybean Board and National Corn Growers
Association.
This work is being conducted at the Industrial Agricultural
Products Center, University of Nebraska, East Campus, Lincoln,
Nebraska. The objectives of the original projects have been completed.
Specific objectives have been identified in each renewal request.
Keeping with the Administration's policy of awarding research grants
competitively, no further Federal funding for this grant is requested.
Research could be continued at the State's discretion using formula or
other funds.
This project is evaluated annually based on an annual progress
report. The lead staff scientist has reviewed the project and
determined that the research is conducted in accord with the mission of
this agency.
north central biotechnical initiative
The North Central Biotechnical Initiative administered by Purdue
University conducts a regional competitive research grants program for
biotechnology research to enhance the economic value and commercial use
of plant-based agricultural products of the North Central Region. The
Initiative has funded biomolecular studies with commercial potential in
corn, soybean, rice, barley, and alfalfa, as well as studies on
significant plant pests such as corn borer, corn rootworm, and fungal
pathogens. The principal researcher believes that the proposal links
public and private research in plant biotechnology for enhanced
commercialization of agricultural research that will contribute to
regional and national priorities. In view of significant needs for
research in high priority national interest topics such as improved
pest management systems, funds are not proposed to continue this
Special Research Grant. At the discretion of the State, Hatch Act or
other funding could be used to support this research. The principal
researcher believes this research to be of national, regional or local
need. The original goal of this project is to enhance the economic
value and commercial use of plant-based agricultural products of the
North Central Region. In 1996, the project awarded 13 grants for
biomolecular studies with commercial potential in corn, soybean, rice,
barley, alfalfa, and plant pests.
The work supported by this grant began in fiscal year 1995 and the
appropriation for fiscal years 1995-1996 was $2,000,000 per year and
for fiscal year 1997, $1,940,000, for a cumulative appropriation of
$5,940,000. At this time Purdue University has not allocated any direct
non-federal funds for grants management. Purdue University staff are
providing management and oversight support for the program. Non-federal
support may accrue to individual research projects funded under the
grant.
The funds are administered at Purdue University and the research is
currently carried out at Purdue University, Iowa State University,
Michigan State University, North Dakota State University, Ohio State
University, University of Minnesota, University of Missouri, and
University of Wisconsin. The researchers anticipate that work may be
completed in fiscal year 1999. Completion of initially awarded grants
will be in the summer of 1998 for two-year awards and later for
programs extending beyond two years. Keeping with the Administration's
policy of awarding research grants competitively, no further Federal
funding for this grant is requested. Research could be continued at the
State's discretion using formula or other funds.
The North Central Biotechnical Initiative was evaluated by an
agency peer review panel on January 7, 1997. The panel expressed
concerns about the project, primarily because of the brevity of the
proposal and the absence for a proposal from the grant application. The
agency requested additional information from the principal researcher,
and the grant has been forwarded for final processing. The North
Central Biotechnical Initiative was also featured in a biotechnology
special grant seminar hosted by the agency on December 16, 1996, at
which the principal investigator presented progress and highlights to
an audience of agency scientists, administrators, and awards management
staff.
oil resources from desert plants, new mexico
The Plant Genetic Engineering Laboratory has been exploring the
potential for the production of high value industrial oils from
agricultural products. The effort has been focused on transferring the
unique oil producing capability of jojoba into oilseed rape and
soybean. With the development of technology to both isolate the enzyme
components of oil biosynthesis and successfully transform the target
plants, significant advances have been made with jojoba. In addition,
oil enzymes have been studied in soybean, castor, oilseed rape, and
meadowfoam. The principal researcher believes desert plant sources of
valuable oils for industrial applications are typically low yielding
and limited in climatic areas for farm production. Genetic engineering
offers an opportunity to move genetic capability to high yielding major
crops. Many of the oils and their derivative acids, waxes, and others
can directly substitute for imports of similar polymer materials,
especially petroleum. In view of significant needs for research in high
priority national interest topics such as improved pest management
systems, funds are not proposed to continue this Special Research
Grant. At the discretion of the State, Hatch Act or other funding could
be used to support this research. The goal of the research is to
transfer the unique oil producing capability of jojoba and other native
shrubs into higher yielding crops such as oilseed rape and soybean.
This is a form of metabolic engineering and it requires the transfer of
coordinated groups of genes and enzymes into the host plant to catalyze
the necessary biochemical reactions. Progress has included
characterization and isolation of several lipid biosynthetic enzymes
along with associated genes, binding proteins, and molecular enhancers.
This research began in fiscal year 1989 with a $100,000 grant under
the Supplemental and Alternative Crops program. Grants have been
awarded under the Special Research Grants program as follows: fiscal
year 1990, $148,000; fiscal years 1991-1993, $200,000 per year; fiscal
year 1994, $188,000; fiscal years 1995-1996, $169,000 each year; and
fiscal year 1997, $175,000. A total of $1,549,000 has been
appropriated.
Non-federal funds are not provided for operational portions of this
research. However, New Mexico State University and the Plant Genetic
Engineering Laboratory provide $90,000 for in-kind support per year
including faculty salaries, graduate student stipends, facilities,
equipment maintenance, and administrative support services.
The research is being conducted by the Plant Genetics Engineering
Laboratory at New Mexico State University, Las Cruces, New Mexico. An
estimate of the total time in Federal funds required to complete all
phases of the project is 3-4 years. Keeping with the Administration's
policy of awarding research grants competitively, no further Federal
funding for this grant is requested. Research could be continued at the
State's discretion using formula or other funds.
The Oil Resources from Desert Plants, New Mexico project was
evaluated for scientific merit by an agency peer review panel on
January 7, 1997. The panel recommended approval of the project pending
receipt of supplemental information on administrative aspects of the
project.
organic waste utilization, new mexico
Composted dairy waste is utilized as a pretreatment to land
application. Composting dairy waste before land application may
alleviate many of the potential problems associated with dairy waste
use in agronomic production systems. Composting may also add value to
the dairy waste as a potential landscape or potting media substrate.
High temperatures maintained in the composting process may be
sufficient for killing enteric pathogens and weed seeds in dairy waste.
Noxious odors and water content may be reduced via composting.
Composted dairy waste may be easier to apply, produce better seed beds,
and not increase soil salinity as much as uncomposted dairy waste. The
principal researcher believes the research will address the utilization
of dairy waste combined with other high-carbon waste from agriculture
and industry, including potash and paper waste, for composting. This
approach to waste management will have high impact for states where
dairy and agriculture are important industry sectors. This is
especially true for New Mexico and the southwest United States, where
the dairy business is growing rapidly. This research will also provide
an additional pollution prevention toot for the industrial sectors
dealing with potash and paper waste. In view of significant needs for
research in high priority national interests such as pest management
systems, funds are not proposed to continue this Special Research
Grant. At the discretion of the state, Hatch Act or other funding could
be used to support this research.
The original goal of the research is to determine the feasibility
of simultaneously composting of dairy waste from agriculture and
industry. The research will determine effects of utilizing composted
waste, as opposed to raw waste, as a soil amendment on plant growth,
irrigation requirements, and nutrient and heavy metal uptake. Phase 1,
to determine the feasibility of simultaneous composting dairy waste
with available high carbon wastes from agriculture and industry, has
been completed. Phase 11, to determine the appropriate ratios of waste
to carbon substrate for successful composting, is 50 percent completed.
The work supported by this grant begins in fiscal year 1996 and the
appropriation for fiscal year 1996 was $150,000, and for fiscal year
1997 is $100,000. A total of $350,000 has been appropriated. The non-
federal funds for the duration of this grant from the state
appropriation is $50,000. There is another $30,000 in-kind support from
the industrial partners. Additionally, a sum of $15,000 from the New
Mexico State Highway Department is also being leveraged by this
project.
This work will be carried out in New Mexico under direction of the
Waste-Management Education & Research Consortium in collaboration with
The Composting Council and industrial partners, such as Envio (Ohio),
Plains Electric and McKinley Paper (New Mexico). Completion date will
be January 1999. Objectives are being met as the project continues.
Keeping with the Administration's policy of awarding research grants
competitively, no further Federal funding for this grant is requested.
Research could be continued at the State's discretion using formula or
other funds.
This project has been evaluated based on the annual progress report
and research findings presented at the annual Composting Council
Conference. The lead staff scientist has reviewed the project and
determined that this research is conducted in accordance with the
mission of this agency.
pasture and forage research, utah
CSREES has requested the university to submit a grant proposal in
accordance with the Senate directive that has been received, and is
being reviewed by the agency. The proposed research under this Special
Research Grant will address issues related to forage production and
utilization in Utah. In view of significant needs for research in high
priority national interest topics such as improved pest management
systems, funds are not proposed to continue this Special Research
Grant. At the discretion of the state, Hatch Act or other funding could
be used to support this research. The original goal of this project is
to develop a comprehensive guide for the management of irrigated
pastures to assist livestock producers, reduce cost, and increase net
returns.
The work supported by this grant begins in fiscal year 1997 and the
appropriation for fiscal year 1997 is $200,000.
Research will be conducted at the Utah Agricultural Experiment
Station. The principal investigators anticipate the completion date for
these objectives to be in 2002. Keeping with the Administration's
policy of awarding research grants competitively, no further Federal
funding for this grant is requested.
The proposal for the initial year's funding is currently under
agency review.
peach tree short life in south carolina
Progress continued in 1996 with focus on the continued evaluation
of longevity and productivity of Guardian rootstocks on peach tree
short life sites in the southeast and replant sites throughout North
American. More fundamental work has involved the biochemical
characterization of the egg-kill factor produced by a bacteria on
nematode eggs. Other basic studies involved the cloning of genes
associated with production and expression of toxins from the bacteria.
The problem of the disease on peach, nectarine, and plum trees in the
southeastern United States effects is very great. More than 70 percent
of peach acreage in the southeast is effected. Due to the loss of
chemical nematicides, this disease has increased to nearly three times
the levels experienced when nematicides were in use. In South Carolina,
an average of 100,000 trees died in the years between 1980 and 1986.
Continued studies on improvement of rootstock and the use the cultivar
Guardian BY520-9 has potential to benefit the entire peach industry
including California, New Jersey and Michigan where bacterial canker is
a problem. Because there are significant needs for research in high
priority national interest topics such as improved pest management
systems, funds are not proposed to continue this Special Research
Grant. At the discretion of the state, Hatch Act or other funding could
be used to support this research.
The goal of this research was the continued evaluation of
productivity of peach Guardian BY520-9 rootstocks on peach short life
and investigations into novel management for ring nematodes by
bacteria. Recent accomplishments include increased Guardian seed
production that reached 600,000 commercial seeds. The rootstock is
being tested in a 22 states and provinces and continues to perform
well. Bulk seed lots of Guardian was shown to be resistant to root-knot
nematodes. Fingerprinting using RAPD successfully separated root-knot
nematode resistant rootstocks from susceptible ones. The unique
insertion site in four Tn5 egg-kill factor minus mutants were
identified. The bacteria, Pseudomonas aureofaciens BG33R was shown not
to produce chitinase but other enzymes.
Grants have been awarded from funds appropriated as follows: fiscal
year 1981, $100,000; fiscal years 1982-1985, $192,000 per year; fiscal
years 1986-1988, $183,000 per year; fiscal year 1989, $192,000; fiscal
year 1990, $190,000; fiscal years 1991-1993, $192,000 per year; fiscal
year 1994, $180,000, and fiscal years 1995-1997, $162,000 each year. A
total of $3,041,000 has been appropriated.
The non-federal funds and sources for this grant were as follows:
$149,281 state appropriations in 1991; $153,276 state appropriations in
1992; $149,918 state appropriations in 1993; $211,090 state
appropriation in 1994; $193,976 in state appropriation in 1995,
$169,806 in state appropriation in 1996.
This research is being conducted at South Carolina Agricultural
Experiment Station. The researchers anticipated that the work may be
completed in fiscal year 1998. Adequate progress has been made to
assure that the objectives will be met before the completion date.
Keeping with the Administration's policy of awarding research grants
competitively, no further Federal funding for this grant is requested.
The last agency evaluation was a merit review completed January 5,
1997. In summary, the evaluation of peach rootstocks with resistance to
peach tree short life is of continued importance in managing this
disease. The use of biological control strategies in suppression of
plant parasitic nematodes are a complementary areas of research in that
it can enhance disease management by protecting the peach rootstocks.
Progress was made in all the objectives in 1996. Some accomplishments
were the increased production and release of commercial Guardian seed
and continued evaluation of the seed in 22 states and provinces. A
molecular technique that separates resistant from susceptible peach
rootstocks appeared successful in preliminary studies. Other
accomplishments were on the identification of the Tn5 egg kill factor.
pest control alternatives, south carolina
This grant supports research and technology transfer to provide
growers with alternatives for managing pests and to implement the use
of new alternatives reducing the sole reliance on chemical pesticides.
The investigators contributing to the research and technology transfer
at South Carolina believe that need for the development of alternatives
for managing pests on vegetables is a regional and national problem.
Research contributions are projected by South Carolina to impact
vegetable production in the Southern region and consumers of vegetable
production from the Southern region. In view of significant needs for
research in high priority national interest topics such as improved
pest management systems, funds are not proposed to continue this
Special Research Grant. At the discretion of the State, Hatch Act or
other formula funding could be used to support this research. In
addition, future efforts will be made to collaborate with Integrated
Pest Management (IPM) regional and state team representatives in
finding solutions to the specified problem area.
The goal of this program is to investigate alternative methods of
managing insects, plant diseases, and nematodes in vegetable crops as
complements to or as substitutes for conventional chemical sprays.
Principal accomplishments appear to rest in a four-year comparison of
study plots of organically grown and conventionally grown vegetables.
Residual nutrient levels in subplots treated with organic sources of
fertilizer were greater than in subplots which received inorganic
source of fertilizer. After four years of summer cropping followed by
winter cover crop treatments, no herbicides nor pesticides have been
applied to the study area. Weekly scouting has determined that harmful
insect thresholds have not been reached. Naturally occurring beneficial
insects were sufficient for pest control. The role of indigenous
predators, parasites, and pathogens in controlling insect pests are
being evaluated. Technology transfer to conventional and IPM systems
has resulted in modified thresholds for caterpillar pests in collards
and tomatoes which incorporate the impact of beneficials in the system
and a sampling plan for tomato fruitworm which considers numbers of
parasitized eggs used to schedule insecticide sprays. Numbers of
insecticide sprays were reduced by 75-100 percent and the weight of
marketable fruits was the same in plots receiving weekly sprays.
This work supported by this grant began in fiscal year 1992 and the
appropriation for fiscal years 1992 and 1993 was $125,000 per year. In
fiscal year 1994 the appropriation was $118,000 and in fiscal years
1995 through 1997, $106,000 per year. A total of $686,000 has been
appropriated. South Carolina has provided $124,860 per year from State
appropriations.
This research and technology transfer program is being conducted at
the South Carolina Agricultural Experiment Station, Clemson University
at Clemson, Florence, and Charleston, South Carolina. The original
objectives of the project were for five years. Funding last year
completed the five-year duration, and researchers indicated that the
work would be completed by the end of the last fiscal year. Research on
objective A, develop and evaluate microbial pest control agents for
control of plant pathogens and insect pests of vegetables, is defuse
and non-conclusive. Work in this area could be submitted to competitive
peer review programs where the investigators would need to clearly
focus specific activities and receive the benefit of the comments of
peer scientists. Research on objective B, determine the efficacy of
innovative cultural practices for vegetable production systems in South
Carolina, and objective C, assess the role of indigenous predators,
parasites, and pathogens in controlling insect pests, determine
environmental and biological factors that influence the abundance and
distribution of these indigenous beneficials, and consider the presence
of natural enemies, as well as pests, in management decisions, is the
area where the most progress appears evident. The base of information
and orientation of the research in this area is adequate and of quality
that the investigators could compete well in competitive grant programs
such as sustainable agriculture or regional IPM grant programs, and
would benefit from the peer review process. Progress in this area is an
ongoing process as explanations are sought for the results being
obtained. Research on objective D, evaluate and develop germplasm,
breeding lines and cultivars for resistance to major pathogens of
commercially important vegetables, and objective E, transfer new
technology to user groups, has not demonstrated any progress that would
not be anticipated from ongoing conventional sources of funds. Keeping
with the Administration's policy of awarding research grants
competitively, no further Federal funding for this grant is requested.
We evaluate this project annually when we process the grant. Last
year we wrote to the South Carolina station indicating that they should
consider initiating a comprehensive review with CSREES participation.
CSREES plans to initiate this review before we process the 1997 grant.
pesticide clearance
Pest Management for Minor Crops
The Pest Management for Minor Crops (IR-4) Program, formerly the
Pesticide Clearance Program, is a joint effort between the State
Agricultural Experiment Stations, CSREES, and the Agricultural Research
Service. IR-4 provides the national leadership, coordination and focal
point for obtaining tolerance and safety data for pesticides and
biological control agents for specialty crops such as horticultural
crops. The agricultural chemical industries have not economically-
justified the time and expense to conduct the necessary research for
pesticides with small market potential. With the Federal registration
resulting from this research, a large number of small acreage crops
such as vegetables, fruits, nuts, spices and other specialized crops
have been provided with needed crop protection against pests. Protocols
are written after careful review and inputs from representatives of
grower groups, industry and researchers. The researchers then carry out
field trials on priority needs to determine their effectiveness, safety
and usefulness and then analyze the field grown commodities, where
appropriate, to identify and quantify any residues that may persist.
All of this is done according to the Environmental Protection Agency's
(EPA) Good Laboratory Practices guidelines which calls for rigorous
field testing and chemistry analysis. The research program then
assimilates the data from all the grower groups and chemical industry,
and petitions are written for tolerances and Federal registration or
reregistration. The 1996 grants terminate between March 1996 and March
1998. The basic mission of IR-4 is to aid producers of minor food crops
and ornamentals in obtaining needed crop protection products. IR-4 is
the principal public effort supporting the registration of pesticides
and biological pest control agents for the $31 billion minor crop
industry. This is a national research effort which identifies needs by
a network of users and state university and Federal researchers. This
research is highly significant to national, regional or local needs.
The goal is to obtain minor use and specialty use pesticide
registrations and assist in the maintenance of current registrations,
and to assist with the development and registration of biopesticides
and safer pesticide products useful in IPM systems for minor corps.
This research effort has been responsible for data in support of 2,074
food use clearances, which include 1,127 since 1984, 3,602 ornamental
registrations, and research on 26 biopesticides resulting in 18 minor
use registrations. The Pesticide Clearance program continues to have a
high productivity which, according to EPA, results in 40 percent of all
EPA pesticide registrations.
Grants have been awarded from appropriated funds as follows:
Program redirection in fiscal year 1975, $250,000; fiscal year 1979,
$500,000; fiscal years 1977-1980, $1,000,000 per year; fiscal year
1981, $1,250,000; fiscal years 1982-1985, $1,400,000 per year; fiscal
year; 1986-1989, $1,369,000 per year; fiscal year 1990, $1,975,000;
fiscal year 1991, $3,000,000; fiscal years 1992-1993, $3,500,000 per
year; fiscal year 1994, $6,345,000; and fiscal year 1995 through 1997,
$5,711,000. A total of $52,529,000 has been appropriated.
The non-federal funds and sources provided for this grant were as
follows: $891,856 state appropriations and $65,402 industry in 1991;
$1,002,834 state appropriations and $104,292 industry in 1992;
$1,086,876 state appropriations and $310,133 industry in 1993; $550,160
state appropriations, $408,600 industry, and $924,169 miscellaneous in
1994; $775,432 state appropriations, $266,714 industry, and $751,375
miscellaneous in 1995; and an estimated $800,000 state appropriations,
$250,000 industry, and $800,000 miscellaneous in 1996.
Field work is performed at the State and Territorial Experiment
Stations. Laboratory analysis is conducted primarily at the California,
New York, Florida and Michigan Agricultural Experiment Stations with
assistance by the Oregon, Hawaii, North Dakota, Arkansas, North
Carolina, Washington, Virginia, Mississippi, Idaho, Pennsylvania and
New Jersey Agricultural Experiment Stations. Protocol development, data
assimilation, writing petitions, and registration processing are
coordinated through the New Jersey Agricultural Experiment Station. ARS
is conducting minor use pesticide studies at locations in California,
Georgia, Illinois, Maryland, Ohio, Oregon, South Carolina, Texas, and
Washington. ARS laboratories in Georgia, Maryland and Washington are
cooperating with analyses.
Selected categories of the Special Research Grants program address
important national and regional research initiatives. The pesticide
clearance program, also referred to as pest management for minor crops,
involves research on biological systems that by their nature are ever
changing and presenting new challenges to agriculture. The IR-4
workload is anticipated to be long term because of the sensitivities
about food safety and the environment, plus the reregistration of older
pesticides mandated by the 1988 amendments to the Federal Insecticide,
Fungicide, and Rodenticide Act--FIFRA. IR-4 developed a strategy in
1989 to defend needed minor use pesticides that were subject to
reregistration but would not be supported by industry for economic
reasons. In addition, the Food Quality Protection Act calls for more
extensive residue data requirements which would take into account an
additional safety factor for assessing pesticides on foods consumed by
infants and children. IR-4 will fulfill these commitments by December
1997, the conclusion of reregistration process mandated by the FIFRA
amendments. IR-4's updated strategic plan focuses on the registration
of biopesticides and safer pest control technology for minor crops.
This program thrust will be carried out along with the traditional
minor crop pesticide clearance programs
Each year the program is peer reviewed and reviewed by CSREES'
senior scientific staff. A summary of those reviews indicate excellent
progress in achieving the objectives. In addition to the yearly
evaluations, the program received an on-site external review sponsored
by CSREES in December 1990, and a GAO review, the results of which were
published in June 1992. The GAO report notes that IR-4 has an effective
research agenda to include pesticides that are most likely to be
approved by EPA, using the existing land-grant university
infrastructure. The mentioned legislative requirements and regulatory
standards add to IR-4's already significant workload.
pesticide impact assessment program
Research funded by the National Agricultural Pesticide Impact
Assessment Program NAPIAP--discovers, gathers, publishes, and
distributes information relating to the use and effectiveness of pest
management alternatives essential to the maintenance of U.S.
agricultural crops and livestock production. These data involve
evaluating the biologic and economic impact and consequences of
restricting the use of key pesticides either through voluntary
cancellations or regulatory action. NAPIAP data augments National
Agricultural Statistic Service--NASS--data by conducting commodity
based assessments on minor-use or small acreage crops. To insure that
there is no duplication of effort, NAPIAP coordinates information
collection with NASS and concentrates its pest management inquiries on
commodities not surveyed by NASS. This program provides the
Environmental Protection Agency (EPA) and the USDA with information on
the use and effectiveness of pest management alternatives essential to
the maintenance of U.S. agricultural crops and livestock production.
EPA uses this information in making environmentally sound regulatory
decisions which have minimal risk to human health and the economic
balance of U.S. agriculture. USDA uses these data to identify commodity
sites where there are critical pest threats to production because no or
few pest management alternatives exist. This national research and
information delivery effort involves USDA coordinated cooperative
interactions with scientists in all State Agricultural Experiment
Stations and Cooperative Extension Services. The USDA and EPA receive
state generated agricultural information needed for sound regulatory
decision-making and the state partner receives federal funds,
participatory input into the regulatory process, and direct access to
timely regulatory information.
The National Agricultural Pesticide Impact Assessment Program--
NAPIAP--has been an on-going research effort whose original goal in
1977 was to gather data to provide comprehensive assessments
documenting what would be the impact on agriculture if certain
pesticides would no longer be available. A federally coordinated
network of state scientist contacts was developed in the intervening
years as broader and more environmentally enlightened goals evolved
within this program. Today the NAPIAP's goals are defined in its
strategic plan as: first, in collaboration with USDA, EPA, and Land-
Grant partners, to focus activities on collecting and delivering high
quality, science based pest management information for use in the
regulatory process; and second, maintain and enhance a strong
partnership between the USDA and the Land Grant System in order to
continue the positive interactive flow of vital pest management
information between the USDA, the regulatory community, and production
agriculture.
Grants have been awarded from funds appropriated as follows: Fiscal
years 1977-1981, $1,810,000 per year; fiscal years 1982-1985,
$2,069,000 per year; fiscal years 1986-1988, $1,968,000 per year;
fiscal year 1989, $2,218,000; fiscal year 1990, $2,437,000; fiscal
years 1991-1993, $2,968,000 per year; fiscal year 1994, $1,474,000; and
fiscal years 1995-1997, $1,327,000 per year. A total of $42,244,000 has
been appropriated.
The majority of the cost of the state scientist and the NAPIAP
program is born by the state partner. The exact contribution of each
state is not known, nor has this information been requested to be
reported to the federal partner during the duration of this program.
The federal program funds provided to the states by the Cooperative
State Research, Education, and Extension Service have been used by
state partners to partially defray their costs of staffing a Pesticide
Impact Assessment Program State Liaison Representative on their Land
Grant campus. The remainder of the salary costs, facility costs,
clerical support expenditures, supplies and program costs of the
program's State Liaison Representative have been born by each state and
there costs are considered the state funding provided to support this
program. State estimates of their contributions to this program have
ranged from 3 to 6 times the federal dollars that have been provided to
support their cooperative efforts.
This work is underway at State Agricultural Experiment Stations in
53 states and Territories. Competitively awarded research funds which
fill both national and regional informational needs are coordinated
through a lead state in each of the four regions of the United States:
California--West; Ohio--North Central; Northeast--Pennsylvania; and
Florida--South. The National Agricultural Pesticide Impact Assessment
Program--NAPIAP--has been an ongoing research effort whose original
goal in 1977 was to gather data to provide comprehensive assessments
documenting what would be the impact on agriculture if certain
pesticides would no longer be available. A federally coordinated
network of state scientist contacts was developed in the intervening
years as the information needs of the regulatory agency increased. This
is a multi-agency on-going program strongly supported by dollars and
personnel within CSREES, ARS, ERS, and the Forest Service which is
attempting to address the ever increasing data needs for information by
EPA in recent years. As the impacts of the Food Quality Protection Act
become more widely realized and IPM implementation requires
measurements to comply with the Government Performance and Results Act,
there will be an even greater need for pest management information
traditionally gathered, developed, and processed by the NAPIAP.
A comprehensive evaluation and review of the national component of
the National Agricultural Pesticide Impact Assessment Program--NAPIAP--
was conducted in February 1995. The review panel's report was published
in June 1995. The review team was composed of 10 scientists from EPA,
Industry, and the Land Grant System. The recurring theme that emerged
from the 1995 review was a directive to focus the NAPIAP program on
data collection on the benefits of pest management alternatives. To
address this directive, CSREES brought together the programmatic and
budgetary components of CSRS and CES into a single coordinated NAPIAP
effort. This reorganized program is now supported by parallel funding
of Public Law 89-106 and Smith-Lever 3(d) dollars. In addition to
NAPIAP program allocation funds, there is a regionally-based
competitive grants program designed to: first, quantify the usage of
different pest management alternatives; second, quantify yield and
quality data related to pest management alternatives; and third,
measure other benefit parameters related to agricultural pest
management. The data gathered by NAPIAP will also be used to aid the
Pest Management Alternative program efforts. There is strong potential
for further collaboration between these two programs.
phytophthora root rot, new mexico
Work has continued to focus in general on development of strategies
for sustainable vegetable production in irrigated lands. Work has
continued on the search for Phytophthora root rot resistance in
chilies, identification of molecular markers for rot tolerance genes,
investigation on irrigation modification as a means to manage root rot,
and soil bed temperature control as a means to control disease. Because
the Phytophthora disease threatens chili production in west Texas, New
Mexico, and Eastern Arizona, this problem is of state-and regional-
scale significance. In view of significant needs for research in high
priority national interest topics such as the integrated pest
management systems initiative, funds are not proposed to continue this
Special Research Grant. At the discretion of the state, Hatch Act or
other funding could be used to support this research. The original goal
was to improve chile production through genetically superior cultivars,
combined with new improved cultural practices. Researchers have
developed a highly effective disease screen that selects resistant
seedlings, found that genes for resistance to root rot do not provide
protection against Phytophthora foliar blight, that a wild species of
Capsicum is immune to the fungus, and that molecular markers are useful
to introgress genes for tolerance. They also found that alternate row
irrigation and drip irrigation significantly reduce Phytophthora root
rot. Control of soil temperature with soil mulches can greatly impede
the progression of root rot in the irrigated fields.
The work supported by this grant began in fiscal year 1991 with an
appropriation of $125,000 for fiscal year 1991. The fiscal years 1992-
1993 appropriation was $150,000 per year; $141,000 in fiscal year 1994;
and $127,000 in fiscal years 1995-1997, each year. A total of $947,000
has been appropriated. The non-federal funds supporting this project
amount to $255,319, from state appropriations and the California Pepper
Commission.
Research is being conducted at New Mexico State University. The
anticipated completion date for the original objectives was 1995. Those
objectives have not been met. Related programs deal with research and
development efforts designed to prevent or manage diseases impacting
vegetable production in irrigated areas, and cooperators estimate that
the objective of these programs should be met by 2002. Keeping with the
Administration's policy of awarding research grants competitively, no
further Federal funding for this grant is requested.
The last agency evaluation was made in December, 1996. In summary,
the evaluation stated that the overall goal of this project is control
of various soil-borne diseases of irrigated vegetable crops in New
Mexico, with applicability to other southwest U.S. production areas.
Specifically, the current effort focuses on Phytophthora root rot of
chilies.
postharvest rice straw, california
The postharvest rice straw special grant is new in 1997 and has two
main objectives: (1) characterize current capabilities, costs and
constraints in harvesting and handling rice straw as a renewable
material for commercial products and (2) investigate alternative
harvest and handling systems and evaluate their specialized equipment
and system designs. California legislation mandates reduction in the
amount of open rice straw burning, the principal method of rice straw
disposal. Efficient harvest and handling may make rice straw a suitable
raw material for user businesses while meeting straw burning
regulations and improving air quality. In view of significant needs for
research in high priority national interest topics such as improved
pest management systems, funds are not proposed to continue this
Special Research Grant. At the discretion of the state, Hatch Act or
other funding could be used to support this research. The principal
researcher believes this research to be of regional and local need.
This research was initiated in 1997. The goal is to demonstrate
efficient and economic rice straw harvest and handling, thereby
establishing rice straw as a feedstock for value-added manufacturing
and other uses.
The work supported by this grant begins in fiscal year 1997 and the
appropriation for fiscal year 1997 is $100,000. The University of
California-Davis cites cooperation by the California Rice Industry
Association and the California Rice Research Board. Cost-sharing
support from non-federal funds is not included. Cost-sharing may become
available from industry later in the project as prototype harvest and
handling equipment and systems for rice straw are developed and tested.
Research will be conducted at the Department of Biological and
Agricultural Engineering, University of California-Davis, California.
It is anticipated by the University of California-Davis that the
postharvest rice straw project will be completed in 2002, after a five
year-period to meet objectives. Keeping with the Administration's
policy of awarding research grants competitively, no further Federal
funding for this grant is requested.
Since 1997 is the first year for the postharvest rice straw
project, no evaluation has been conducted.
potato cultivars, alaska
This research will focus on the development of potato cultivars
that might be useful as disease resistant seed stock for the contiguous
U.S. This research will focus on the development of potato cultivars
that might be useful as disease resistant seed stock for the contiguous
U.S. However, in view of significant needs for research in high
priority national interest topics such as improved pest management
systems, funds are not proposed to continue this Special Research
Grant. At the discretion of the state, Hatch Act or other funding could
be used to support this research. This research will focus on the
development of potato cultivars that might be useful as disease
resistant seed stock for the contiguous U.S. Funding for this project
was initiated in fiscal year 1997, so no accomplishments have been made
under the grant to date.
The work supported by this grant begins in fiscal year 1997.
Funding is appropriated in fiscal year 1997 for $120,000. No
information on non-federal funds have been reported to CSREES yet.
The research will be conducted in the state of Alaska. It is
anticipated that the completion date for the original objectives will
be within a 5-year period. Keeping with the Administration's policy of
awarding research grants competitively, no further Federal funding for
this grant is requested.
Because this is a new project in fiscal year 1997, the agency has
not had an opportunity to evaluate the project, but will follow its
procedures of reviewing the University's proposal and the resulting
progress reports.
potato research
Scientists at several of the State Agricultural Experiment Stations
in the Northeast, Northwest, and North Central States, are breeding new
potato varieties, high yielding, disease and insect resistant potato
cultivars, adapted to the growing conditions in their particular areas,
both for the fresh market and processing. Research is being conducted
in such areas as protoplast regeneration, somoclonal variation,
storage, propagation, germplasm preservation, and cultural practices.
The principal researcher believes this research effort addresses needs
of the potato producers and processor. Research areas being studied
include storage and postharvest handling of potatoes and their effect
on potato quality. Potato producer and processor needs are breeding and
genetics, culture factors and pest control on potato production. In
view of significant needs for research in high priority national
interest topics such as improved pest management systems, funds are not
proposed to continue this Special Research Grant. At the discretion of
the state, Hatch Act or other funding could be used to support this
research. Efforts will be made to collaborate with IPM regional and
state team representatives in finding solutions to specific pest
concerns. The original goal was to improve potato production through
genetics and cultural practices as well as improve storage for quality
potatoes for processing and fresh market. This research has resulted in
a number of new high yielding, good quality, disease and insect
resistant, russet type cultivars, which are now being used in the
processing industry and in the fresh market. Research by the Pacific
Northwest States of Washington, Oregon and Idaho has resulted in the
release of a number of cultivars, including Gemchip, Calwhite, Century
Russet, Ranger Russet, Frontier Russet and Chipeta. In addition, North
Dakota developed Norkatah as a result of this program.
Grants have been awarded from funds appropriated as follows: fiscal
year 1983, $200,000; fiscal year 1984, $400,000; fiscal year 1985,
$600,000; fiscal years 1986-1987, $761,000 per year; fiscal year 1988,
$997,000; fiscal year 1989, $1,177,000; fiscal year 1990, $1,310,000;
fiscal year 1991, $1,371,000; fiscal years 1992 and 1993, $1,435,000
per year; fiscal year 1994, $1,349,000; and fiscal years 1995 through
1997, $1,214,000. A total of $15,438,000 has been appropriated.
The non-federal funds and sources provided for this grant were as
follows: $401,424 state appropriations, $4,897 product sales, $249,830
industry, and $30,092 miscellaneous in 1991; $567,626 state
appropriations, $6,182 product sales, $334,478 industry, and $44,323
miscellaneous in 1992; $556,291 state appropriations, $9,341 product
sales, $409,541 industry and $44,859 miscellaneous in 1993; $696,079
state appropriations, $21,467 product sales, $321,214 industry, and
$226,363 miscellaneous in 1994; $935,702 state appropriations, $35,376
product sales, $494,891 industry, and $230,080 miscellaneous in 1995;
and an estimated $900,000 state appropriations, $10,000 product sales,
$400,000 industry, and $200,000 miscellaneous in 1996.
The research work is being carried out at the Cornell, Idaho,
Maine, Maryland, Michigan, North Dakota, Oregon, Pennsylvania, and
Washington State Agricultural Experiment Stations. The project was
initiated to accomplish significant results in about five years.
Because the research is based on genetic varietal development, progress
in developing new potato varieties takes from 5 to 10 years. Keeping
with Administration's policy of awarding research grants competitively,
no further Federal funding for this grant is requested. Research could
be continued at the State's discretion using formula funds.
Each year the grant is peer reviewed and reviewed by CSREES's
senior scientific staff. A summary of that review indicated progress in
achieving the objectives. In addition, the agency has at least one
formal meeting with representatives from the potato industry to review
research needs.
preharvest food safety, kansas
The project is to examine the incidence of shedding of E. coli
0157:H7 in feces of beef cattle and the impact of various management
procedures such as calving, weaning, routine cattle handling for
vaccination, etc. on the frequency and amount of shedding of these
bacteria. The study will focus on the differences between small and
large cow-calf operations in Kansas. The presence of E. coli in cattle
destined for slaughter and entry of meat products into the human food
chain has given impetus to the need for understanding the ecology of
the organism and the impact of management strategies, including herd
size, on the prevalence of the organism and likelihood of contamination
of meat supplies. In view of significant needs for research in high
priority national interest topics such as improved pest management
systems, funds are not proposed to continue this Special Research
Grant. At the discretion of the state, Hatch Act or other funding could
be used to support this research.
The original goal of this research was to determine the relative
incidence of shedding of E. coli 01 57: H7 from beef cattle in small
and large cow-calf operations and the impact of various management
events in the production cycle on this bacterial shedding. The
principal researcher expects this information will assist in reducing
the prevalence of this organism in beef cattle and, thus, reduce the
incidence of food-borne illness in humans due to this bacterium. To
date, the research team has established new highly effective and rapid
detection systems for identifying the E. coli organism in feces of
cattle. The cooperating herds have been identified and initial
collections have been made. Collaborative arrangements have also been
established with scientists at the University of Nebraska-Lincoln for
doing more intensive work with animals that are identified as
``shedders''. At this time they have met all of their goals on time and
expect to continue to do so.
The work supported by this grant began in fiscal year 1996. The
appropriation for fiscal years 1996 and 1997 was $212,000. A total of
$424,000 has been appropriated. During fiscal year 1996 non-federal
funds provided to this project were $150,000 in state appropriations
and $91,450 in contributed indirect costs. It is anticipated that a
similar contribution will be made by Kansas State University in fiscal
year 1997.
This research is being conducted at Kansas State University,
University of Nebraska-Lincoln and at ranches in Kansas, Nebraska and
Colorado. The anticipated completion date was October 1, 1998, for the
original objectives. At this time, the research team has completed all
objectives that were planned for Year 1 of the grant and are working on
the objectives for Year 2. It is anticipated that the other original
objectives will be completed on schedule and the project should
terminate in late 1998. Keeping with the Administration's policy of
awarding research grants competitively, no further Federal funding for
this grant is requested.
The agency evaluates the progress of this project on an annual
basis. The principal researcher has provided regular progress reports
which have confirmed that the objectives are being accomplished in a
timely manner.
preservation and processing research, oklahoma
Research has focused on the effects of preharvest and postharvest
factors on the market quality of fresh and minimally processed
horticultural products, including factors affecting marigold petal
pigment content, minimal processing procedures for extending the shelf
life and reducing the oil content of pecans, and harvest quality
evaluations for watermelons, pecans and peaches. Researchers are
developing harvester prototypes for multiple harvest of marigold
flowers and drying and threshing systems for marigold petal drying and
separation. Work is ongoing to develop a fruit orienting mechanism to
be incorporated into an on-line grading system and to develop
integrated harvesting/postharvest handling systems for fresh market and
processing market horticultural products. Research is also ongoing to
develop methods to determine textural properties of pecans, determine
optimum operating parameters for supercritical carbon dioxide and other
alternative partial oil extraction, and develop and optimize modified
atmosphere packaging techniques for pecan shelf life extension. Fiscal
year 1997 funds will support research from July 1, 1997 through June
30, 1999. The principal researcher believes that technological
improvements in fruit, nut and vegetable handling systems are
critically needed to supply domestic markets and to support continued
participation in international commerce and thus serves the national
need. Regionally, processing systems under development for commercial
adaptation provide crucial solutions required for market expansion of
pecans, affecting product market potential and value throughout the
southern U.S. Locally, improvements in postharvest handling and
processing are necessary to support growth of the industry and ensure
competitive involvement in national and international commerce of
horticultural commodities uniquely suited for production in Oklahoma.
In view of significant needs for research in high priority national
interest topics such as improved pest management systems, funds are not
proposed to continue this Special Research Grant. At the discretion of
the State, Hatch Act or other formula funding could be used to support
this research.
The goal of the research has been to define the major limitations
for maintaining quality of harvested fruits, vegetables and tree nuts
and prescribe appropriate harvesting, handling and processing protocols
to extend shelf life and marketability of harvested horticultural
commodities, thus maintaining profitability of production systems and
assuring an economic market niche for Oklahoma producers and food
processors. A systems approach to develop complementary cropping,
harvesting, handling and processing operations has resulted in
development of improved handling systems for cucurbit and tree fruit
crops. Matching funding has supported development of nondestructive
processing systems for partial oil reduction of tree nuts, to extend
shelf life and lower the calorie content for the raw or processed
product, resulting in development of a business plan for a commercial
facility. Technologies and procedures previously developed for cucurbit
and tree fruit systems are now being applied to support development of
profitable okra, pepper, sage, basil, tree nut, sweetcorn, and marigold
cropping, handling and light processing systems, with a targeted
completion date of 1999. Research from this project provided the basis
for commercial high relative humidity storage of peaches. Grants have
been awarded from funds appropriated as follows: fiscal year 1985,
$100,000; fiscal year 1986, $142,000; fiscal year 1987, $242,000;
fiscal years 1988 and 1989, $267,000 per year; fiscal year 1990,
$264,000; fiscal year 1991, $265,000; fiscal year 1992, $282,000;
fiscal year 1993, $267,000; fiscal year 1994, $251,000; and fiscal
years 1995-1997, $226,000 each year. A total of $3,025,000 has been
appropriated.
Support from the State of Oklahoma, through the Oklahoma
Agricultural Experiment Station and through the Oklahoma Centers for
Advancement of Science and Technology, have been provided as follows:
fiscal year 1991, $126,900; fiscal year 1992, $209,783; fiscal year
1993, $219,243; fiscal year 1994, $308,421; fiscal year 1995, $229,489;
and fiscal year 1996, $366,570, for a total of $1,460,405 in state
funds. An additional $16,100,000 has been committed by the State of
Oklahoma for development of an Agricultural Products and Food
Processing Center to support, among other programs, the horticulture
processing initiatives, and to begin operation in the spring of 1997.
The Oklahoma State University Division of Agriculture Sciences and
Natural Resources has appropriated approximately $2 million dollars to
staff the facility.
This work is being conducted at the Oklahoma State Agricultural
Experiment Station, in conjunction with ongoing production research at
the Wes Watkins Agricultural Research and Extension Center and the
South Central Agricultural Research Laboratories. The principal
investigator anticipated that the fiscal year 1996 grant would support
work through June 1998. It is expected that ongoing research will be
completed in 2001. Keeping with the Administration's policy of awarding
research grants competitively, no further Federal funding for this
grant is requested. Research could be continued at the State's
discretion using formula or other funds.
An agency science specialist conducts a merit review of the
proposal submitted in support of the appropriation on an annual basis.
A review of the proposal was conducted on December 20, 1996. Though
research progress was satisfactory, development and commercial adoption
of new practices and equipment has been less certain. The project was
evaluated as part of a comprehensive CSREES program site review in the
fall of 1995, with a recommendation by the review team to continue the
value-added product development.
red river corridor, minnesota and north dakota
The purpose is to conduct a program of research to assess emerging
international trade opportunities for the Red River trade region and
develop the means to be able to compete for such opportunities in order
to stimulate economic development. Projects were initiated to assess
the Corridor's transportation infrastructure, research and development
capability, competitive position, export opportunities in Europe and
Latin America, and trade strategies. Emphasis is placed on technology
and information transfer to inform users and potential users. The
University of Minnesota has submitted a grant proposal for fiscal year
1997 to CSREES, and the grant has been awarded. The researchers believe
there is a regional need to find new and alternative markets to replace
traditional markets that have little or no growth potential and to
develop the capabilities to compete successfully for these markets.
International trade is expected to support continued economic growth in
this primarily rural, agriculturally dependent region. In view of
significant needs for research in high priority national interest
topics, such as improved pest management systems, funds are not
proposed to continue this Special Research Grant. At the discretion of
the State, Hatch Act or other funding could be used to support this
research.
The goal is to identify and assess export market opportunities and
develop strategies and programs to improve the region's competitiveness
in international trade. The program has completed studies on
transportation services and costs, the region's trade position on
specialty crops and metal fabrication, agro-industrial research and
development capabilities, and export opportunities through
collaboration with Canada. Studies in progress include trade strategies
of selected European regions and their implications for regional trade
strategies, trade opportunities with Mexico, bilateral technology
transfer among businesses in the region, assessment and implications of
Latin American transportation systems on trade, opportunities and
linkages between rural Mexico and the Red River region, and
relationships between social structure and rural development, This
grant will be used to fund projects to expand the use by rural
businesses of state-of-the-art telecommunications technologies to
expand markets and up-grade worker skills.
The work supported by this grant began in fiscal year 1992. The
appropriation for fiscal years 1992-1993 was $200,000 per year,
$188,000 in fiscal year 1994, and $169,000 in fiscal years 1995-1997. A
total of $1,095,000 has been appropriated.
The non-federal funds and sources provided for this grant are as
follows: $4,300 State appropriations and $2,269 miscellaneous for a
total of $6,569 in fiscal year 1992; $16,000 State appropriations,
$4,138 industry, and $16,688 miscellaneous for a total of $36,826 in
fiscal year 1993; and $1,600 State appropriations, $1,637 industry, and
$29,501 miscellaneous for a total $32,738 in fiscal year 1994. The
preliminary allocation of non-federal matching funding for fiscal year
1995 is $2,000 State appropriations, $7,500 industry, and $6,500
miscellaneous for a total of $16,000. Therefore, a total of $91,133
non-federal funds has been provided through fiscal year 1995. Data for
fiscal year 1996 are not available at this time.
The research program is carried out by the University of Minnesota,
Crookston, in collaboration with North Dakota State University. The
researchers indicate that this phase of the program may be completed in
fiscal year 1998. Keeping with the Administration's policy of awarding
research grants competitively, no further Federal funding is requested
for this grant.
A merit review was conducted of this project in 1996 which
indicated that it has contributed to the strengthening of
communications to rural America regarding international trade
opportunities. A site visit is scheduled for 1997 to assess the
project.
regional barley gene mapping project
The objectives of this project are to: construct a publicly
available medium resolution barley genome map; use the map to identify
and locate loci, especially quantitative trait loci controlling
economically important traits such as yield, maturity, adaptation,
resistance to biotic and abiotic stresses, malting quality, and feed
value; provide the framework for efficient molecular marker-assisted
selection strategies in barley varietal development; identify
chromosome regions for further, higher resolution mapping with the
objective of characterizing and utilizing genes of interest; and
establish a cooperative mapping project ranging from molecular genetics
to breeding that will be an organizational model for cereals and other
crop plants. The fiscal year 1995 grant proposal has been received and
is being processed. The principal researcher believes barley breeders
nationwide need information about the location of agriculturally
important genes controlling resistance to biotic and abiotic stresses,
yield, and quality factors in order to rapidly develop new, improved
cultivars and respond to disease and pest threats. This project
provides that information along with appropriate molecular markers to
track these traits through the breeding and selection process. In view
of significant needs for research in high priority national interest
topics such as improved pest management systems, funds are not proposed
to continue this Special Research Grant. At the discretion of the
state, Hatch Act or other funding could be used to support this
research.
The original goal of this project has been to develop a restriction
fragment length polymorphism map for barley and associated important
genetic traits as a map to provide closely linked molecular markers for
barley breeders. The project successfully mapped 300 molecular markers.
Portions of the map are described as very dense and contain key
location points for enhanced utility. The project is now using the map
to locate quantitative traits loci of economic importance. These
include genetic determinations for yield, maturity, rust resistance,
plant height, seed dormancy, and components of malting quality.
Technical papers have been published to report research results to the
scientific community.
Grants have been awarded from funds appropriated as follows: fiscal
year 1990, $153,000; fiscal year 1991, $262,000; fiscal years 1992-
1993, $412,000 per year; fiscal year 1994, $387,000; and fiscal years
1995-1997, $348,000 each year. A total of $2,670,000 has been
appropriated. The nonfederal funds and sources provided for this grant
were as follows: $203,760 from industry in 1991; $212,750 from industry
in 1992; $115,000 from industry in 1993; and $89,000 from industry in
1994; and $35,000 from the State of Washington and $108,000 in other
nonfederal funding, for a total of $143,000 in 1995. An estimated total
of $163,000 of non-federal funds supported this project.
Research is being conducted in the following state agricultural
experiment stations; Oregon, Colorado, Washington, Montana, Idaho,
North Dakota, Minnesota, New York Virginia and California. The original
objective of the ``Regional Barley Gene Mapping Project'' was to
produce a genetic map of agronomically important traits of the barley
genome. The anticipated time to complete this task was estimated at 10
years with completion in 1999. Many important genes have been mapped,
some of which are being used to improve barley cultivars. Keeping with
the Administration's policy of awarding research grants competitively,
no further Federal funding for this grant is requested.
This project is made up of many competitively awarded subprojects
that are reviewed annually by a peer panel and selected for relevance
to the original objective and scientific merit of the proposed
research. This project has been judged as an exceptionally productive
project which serves as a model for multiinstitutional,
multidisciplinary competitively awarded research projects.
regionalized implications of farm programs
The purpose of this research is to estimate the impacts of farm,
trade, and fiscal policies and programs and assess their alternatives
on the economic viability of typical crop and livestock production
operations located in different regions of the United States. The
principal researcher believes there is a need for research that
provides an assessment and evaluation of the potential impacts of
Federal farm, trade, and fiscal policies on the economic viability and
competitiveness of farmers located in different regions of the United
States. Policy impacts vary regionally because of differences in farm
productivity, input costs, climate, farm enterprises and size. The
research results are widely used by farmers and public policymakers
concerned about minimizing policy and program inequities between
regions and farm sizes. In view of significant needs for research in
high priority national interest topics such as improved pest management
systems, funds are not proposed to continue this Special Research
Grant. At the discretion of the State, Hatch Act or other funding could
be used to support this research.
The original, as well as current, goal was and continues to be to
provide the farm community, extension, and public officials information
about farm, trade, and fiscal policy implications by developing
regionalized models that reflect farming characteristics for major
production regions of the United States. The researchers have developed
a farm level policy analysis system encompassing major U.S. farm
production regions. This system interfaces with existing agricultural
sector models used for farm, macroeconomic, and trade policy analysis.
The universities have expanded the number and types of representative
farms to 80. Typical farm models also are being developed for Mexico
and Canada under a collaborative agreement for use in analyzing impacts
of the North American Free Trade Agreement. Some 25 policy studies were
completed this past year at the request of policymakers and farm groups
including analyses of the impacts of various farm policy proposals on
representative crop farms in the U.S., elimination of the rice program,
conservation reserve program impacts on farms in the Great Plains, and
revised baseline projections for representative farms. The
representative farms were used extensively for analysis of farm level
impacts of the alternative farm program proposals considered for the
1996 Farm Bill as well as implementation alternatives after passage of
the Bill.
The work supported by this grant began in fiscal year 1990 and the
appropriation for fiscal year 1990 was $346,000. The fiscal years 1991-
1993 appropriations were $348,000 per year; $327,000 in fiscal year
1994; and $294,000 in each of the fiscal years 1995 through 1997. A
total of $2,599,000 has been appropriated.
The non-federal funds and sources provided for this grant were as
follows: $288,843 State appropriations and $46,773 industry for a total
of $335,616 in fiscal year 1991; $45,661 State appropriations in fiscal
year 1992; $33,979 State appropriations in fiscal year 1993; $40,967
State appropriations in fiscal year 1994; $161,876 State appropriations
in fiscal year 1995; $187,717 State appropriations for fiscal year
1996; and $137,100 for fiscal year 1997.
Research is being conducted by the Texas A&M University and
University of Missouri at Columbia. The researchers believe this
program is of a continuing nature for the purpose of assessing the
impacts of existing policies and issues and proposed policy and program
changes at the individual firm level for feed grain, wheat, cotton,
rice, oilseed and livestock producers. In keeping with the
Administration's policy of awarding research grants competitively, no
further Federal funding is requested for this grant. No formal
evaluation of this project has been carried out.
rice modeling
The purpose of this research project is to develop a rice industry
model with domestic and international components to aid U.S. farmers,
millers, and policymakers in making production, investment, marketing
and public policy decisions. Research is needed to assist both the U.S.
rice industry and national policymakers in assessing the impact of
existing and proposed changes in public policies for rice. This
research enables improved analysis of both international and domestic
policy changes on rice production, stocks, prices of substitute crops
and consumption. However, in view of significant needs for research in
high priority national interest topics such as improved pest management
systems, funds are not proposed to continue this Special Research
Grant. At the discretion of the State, Hatch Act or other funding could
be used to support this research. The original goal of this research
was to develop international, national and regional models to analyze
the impact of foreign and domestic policy changes, and forecast changes
in production, stocks, prices of substitute crops and consumption.
The work supported by this grant began in fiscal year 1996. The
appropriation for fiscal years 1996 and 1997 was $395,000 for a total
of $790,000. For the 1996 fiscal year, state appropriations are
estimated to be $178,000; and for 1997, approximately $150,000.
The research is being carried out at the University of Arkansas-
Fayetteville and the University of Missouri-Columbia. The researchers
anticipate that the domestic portion of the rice model will be complete
by September 30, 1997. The international modeling research is a little
over half completed and the researchers estimate another 5 years is
required. In keeping with the Administration's policy of awarding
research grants competitively, no further Federal funding is requested
for this grant.
We have conducted no formal evaluation of this project. However,
each annual proposal is carefully reviewed for adherence to stated
objectives and annual progress is discussed with the principal
investigators.
rural development centers
The overall objectives of the research agenda of the five rural
development centers are to: Improve economic competitiveness and
diversification in rural areas; support management and strategic
planning for economic development; create community capacity through
leadership; assist in family and community adjustments to stress and
change; and promote constructive use of the environment. The function
of the Centers is to increase the productivity of regional faculty both
in doing research on rural issues and in using that research to do
effective outreach with rural communities. The number of research
faculty who are addressing broader rural issues is declining in many
places. The multi-disciplinary, multistate, work supported by the
Centers becomes even more crucial in a period of reduced research
emphasis. Critical needs are being met by Center support including
public lands policy, changing rural migration patterns, fiscal
alternatives for local governments, and forest stewardship education.
Specific needs for regional research are reviewed annually by the
Centers. The focus of proposals varies from year-to-year depending on
the shifting priorities.
The Rural Development Center mission is to strengthen rural
families, communities, and businesses by facilitating collaborative
socio-economic research and extension through higher education
institutions in the various regions. These program objectives are also
consistent with one of the 5 major goals discussed in the fiscal year
1999 Performance Plan for the REE Mission Area. Research programs are
undertaken after evaluating broader regional and national priorities.
Following are some accomplishments of selected research activities
conducted under the auspices of various centers. A group of economists
from Oregon, Washington, and Nevada used recent developments in
regional economic modeling to look at the effects on rural and urban
economies of reduced timber harvests in Oregon and of limited grazing
on public lands in northern Nevada. Rural-Urban Interdependence and
Natural Resource Policy, a publication recently released by the Western
Rural Development Center, reports these studies in detail. This report
reflects core-periphery input-output modeling that has grown out of an
earlier research project supported by the Center. Northeast Center
staff have been working with faculty of the University of Minnesota
Extension Service and West Virginia University Extension Service to
alter and condense a business retention and expansion notebook.
Retaining and expanding existing businesses in communities is an
effective alternative approach to industrial recruitment. The resulting
publication will appeal to and be appropriate for use by community
leaders/volunteers interested in helping businesses maintain or expand
their services in their community. The community development approach
to solving business problems is what makes these materials so
appealing. The authors are in their final stages of editing, and the
materials should be available for purchase by the spring of 1997.
Grants have been awarded from funds appropriated as follows: fiscal
year 1971, $75,000; fiscal year 1972, $225,000; fiscal year 1973,
$317,000; fiscal years 1974-1981, $300,000 per year; fiscal years 1982-
1985, $311,000 per year; fiscal years 1986-1987, $363,000 per year;
fiscal year 1988, $475,000; fiscal year 1989, $500,000; fiscal year
1990, $494,000; fiscal years 1991-1993, $500,000 per year; fiscal year
1994, $470,000; and fiscal years 1995-1997, $423,000 per year. A total
of $9,695,000 has been appropriated.
Non-federal funds available to the four Regional Centers for Rural
Development were: fiscal year 1991, $1,117,000; fiscal year 1992,
$790,000; fiscal year 1993, $900,000; fiscal year 1994, $776,591; and
fiscal year 1995, $710,050; for a total of $4,293,641 across the five
years for which there are complete data.
The regional rural development centers include the following:
Northeast Regional Center for Rural Development, Pennsylvania State
University; North Central Regional Center for Rural Development at Iowa
State University; Southern Rural Development Center at Mississippi
State University; and Western Rural Development Center at Oregon State
University. There is also a rural development project at North Dakota
State University which receives funding from the annual Rural
Development Centers appropriation. Most of the research sponsored by
the four regional centers is actually performed by resident faculty at
landgrant universities in the respective region through subcontracts
from that center's grant. The regional rural development centers were
established to provide an on-going ``value added'' component to link
research and extension and by doing so to increase rural development
under the special conditions in each region. The work of the Centers is
being carried out in all 50 states and in some territories. The Centers
compile a report of annual accomplishments and share those with the
states in the region. The list of needs is constantly evolving and is
being addressed through projects that are matched to the constantly
shifting local agenda. The current phase of the program will be
completed in 1997.
The Centers enlist the help of advisory committees that help
establish operating rules and provide professional, technical counsel
and peer evaluation of Center projects. Advisory committee members are
qualified to fulfill these roles because they are directly involved in
the scholarship of rural development and are knowledgeable on changing
issues in rural areas. Specific site evaluations have been undertaken
as follows:
Western Rural Development Center--November 1994
North Central Center--July 1992
Northeast Center--May 1993
Southern Center--August 1995
rural policies institute
The Rural Policy Research Institute (RUPRI) is a consortium of
three universities designed to create a comprehensive approach to rural
policy analysis. The Institute conducts research and facilitates public
dialogue to increase public understanding of the rural impacts of
national, regional, state, and local policies on rural areas of the
United States. There is a need to be able to estimate the impacts of
changing programs and policies on rural people and places. Objective
public policy analysis can provide timely and accurate estimates of the
impacts of proposed policy changes to allow more reasoned policy
discussions and decisions. In view of significant needs for research in
high priority national interest topics such as improved pest management
systems, funds are not proposed to continue this Special Research
Grant. At the discretion of the State, Hatch Act or other funding
sources could be used to support this research. The original goal of
the Rural Policy Research Institute was to create a new model to
provide timely, accurate, and unbiased estimates of the impacts of
policies and new policy initiatives on rural people and places. The
Institute has completed a number of successful policy research projects
and developed three analytic models central to its mission. These
Projects focus on the rural implications of health care, education,
housing, rural development, tax and telecommunications policy
proposals. In addition, the Institute uses expert panels to provide
policy decision support to a number of policy making groups at national
and State levels.
The work supported by these grants began in fiscal year 1991 and
the appropriation for fiscal year 1991 was $375,000. The fiscal year
1992 appropriation was $525,000; for fiscal year 1993, $692,000; for
fiscal year 1994, $494,000; and fiscal years 1995 to 1997, $644,000
each year. A total of $4,018,000 has been appropriated.
Aggregated non-federal funds to support the Rural Policy Research
Institute across the three universities involved include unrecovered
indirect costs, salary support from university and other non-federal
sources, and various other grants, contracts, and reimbursable
agreements. They amounted to $316,458 for fiscal year 1991; $417,456 in
fiscal year 1992; $605,302 in fiscal year 1993; $537,834 in fiscal year
1994; $584,516 in fiscal year 1995; $576,782 in fiscal year 1996; and
$186,859 in 1997. Total non-federal funding to date is $3,225,207.
The Institute's member universities are: the University of
Missouri-Columbia; the University of Nebraska-Lincoln; and Iowa State
University, Ames. Current funding will sustain activity through January
1998. In keeping with the Administration's policy of awarding research
grants competitively, no further Federal funding is requested for this
grant.
We have conducted no formal evaluation, however, annual project
proposals are carefully reviewed, as are policy analyses produced by
RUPRI.
seafood harvesting, processing, and marketing, mississippi
Research related to seafood safety, quality and by-product
utilization has been supported by this grant. Compounds that are
generally recognized as safe and naturally occurring viruses have been
tested for their potential to control pathogenic Vibrio vulnificus that
is associated with gastroenteritis and fatal septicemia following
consumption of raw oysters. The researchers have also evaluated a new
impedance technology to objectively and rapidly determine the freshness
of seafoods. Researchers are also testing steam pasteurization to
reduce catfish microflora and extend shelf life. The principal
researcher believes that needs reflected in the project include
providing consumers with affordable alternative seafood products.
Alternative sources of seafood protein are needed because of a drastic
decline in natural harvests due to overexploitation. Other needs
addressed in this project include reducing pollution during seafood and
aquaculture food processing by converting byproducts into value-added
food ingredients or materials. A regional interest for the Gulf coast
is the potential devastation of the oyster industry if harvests are
severely restricted during warm months. The present project seeks to
provide alternative processing strategies to control foodborne disease
agents in oysters. Locally, catfish processors are a major employer of
the severely economically depressed Delta region of Mississippi. By
further enhancing the value of catfish products, this project seeks to
improve the livelihood of individuals both on the Gulf coast and in the
aquaculture region of the state. In view of significant needs for
research in high priority national interest topics such as improved
pest management systems and food safety, funds are not proposed to
continue this Special Research Grant. At the discretion of the State,
Hatch Act or other funding could be used to support this research.
The original goals of the research were to improve the quality and
safety of catfish and improve the utilization of catfish byproducts and
underutilized marine species. Due to successes of the original project,
subsequent efforts are focusing on additional uses of seafood and
aquaculture foods by improving processing strategies and providing
alternative products from waste materials. The project has thus
expanded to include crab, shrimp, oysters, freshwater prawns, hybrid
striped bass, and crawfish.
The work supported by this grant began in fiscal year 1990 when
$368,000 was appropriated for this project. The appropriations for
fiscal years 1991-1993 were $361,000 per year; fiscal year 1994,
$339,000; and fiscal years 1995-1997, $305,000 each year. A total of
$2,705,000 has been appropriated.
The State of Mississippi contributed $1,949 to this project in
fiscal year 1991; $41,286 in fiscal year 1992; $67,072 in fiscal year
1993; $91,215 in fiscal year 1994; $147,911 in fiscal year 1995; and
$61,848 in fiscal year 1996. Product sales contributed $7,044 in 1991,
$13,481 in 1992, $13,704 in 1993, and $5,901 in 1994. Industry grants
contributed $14 in 1992 and $31,796 in 1993. Other non-federal funds
contributed $80 in fiscal year 1991, $838 in 1992, and $17,823 in 1993.
The total non-federal funds contributed to this project from 1991
through 1996 was $501,962.
Research is being conducted by scientists in the Departments of
Food Science and Technology and Agricultural Economics of the
Mississippi Agricultural and Forestry Experiment Station at Mississippi
State University and at the Coastal Research and Extension Center,
Seafood Processing Laboratory, in Pascagoula, Mississippi. The
principal investigators anticipate that research on the original
objectives will be completed in 1999. Keeping with the Administration's
policy of awarding research grants competitively, no further Federal
funding for this grant is requested. Research could be continued at the
State's discretion using formula or other funds.
An agency science specialist conducts a merit review of the
proposal submitted in support of the appropriation on an annual basis.
Since the agency has not yet received the proposal in support of the
fiscal year 1997 proposal, the last review of the proposal was
conducted on March 18, 1996. At that time, the agency science
specialist believed that the projects addressed needs and interests of
the regional seafood and aquaculture industries.
small fruit research
Research carried out using funding for this Special Research Grant
has been to enhance the production and quality of small fruits in the
Pacific Northwest which includes Idaho, Oregon, and Washington.
Research has been focused on cold hardiness, breeding and genetics, and
pest management. The principal researchers believe Washington, Oregon,
and Idaho are important states for growing, processing, and marketing
small fruits such as strawberries, blackberries, raspberries, grapes
and cranberries. Research is needed to help solve the myriad of
problems in order to remain competitive and expand markets. In view of
significant needs for research in high priority national interest
topics such as improved pest management systems, funds are not proposed
to continue this Special Research Grant. At the discretion of the
state, Hatch Act or other funding sources could be used to support this
research.
The original goal of this project was to improve the production and
quality of small fruits in the Pacific Northwest through research on
cold hardiness, breeding and genetics, and pest control. Research
progress to date for Oregon is the evaluation of new strawberry
germplasm from Chile and North America for resistance to fruit rot,
aphids, spider mites, and weevils; virus indexing of small fruit
germplasm; better color stability of processed strawberries; increasing
cranberry production through better weed control; and improving wine
quality. Work is continuing in Washington on fruit physiology; cold
hardiness of strawberries, grapes, and red raspberries; pest management
of cranberries; and breeding of pest resistant strawberries. Idaho work
continues on postharvest research for better marketability and adapting
small fruit crops to high elevation growing conditions. Oregon and
Washington are jointly carrying out marketing studies to identify new
market niches for berry crops and wines.
The work supported by this grant began in fiscal year 1991 and the
appropriation for year 1991 was $125,000, The fiscal years 1992 and
1993 appropriation was $187,000 per year, fiscal year 1994 was
$235,000, and fiscal years 1995-1997 are $212,000 each year. A total of
$1,370,000 has been appropriated.
The non-federal funds and sources provided for this grant were as
follows: 1991, $1,562,078 state appropriations, $40,933 product sales,
$62,993 industry, $357,266 other nonfederal; 1992, $1,465,969 state
appropriations, $90,453 product sales, $119,164 industry, $287,976
other nonfederal; 1993, $1,539,255 state appropriations, $91,954
product sales, $161,141 industry, $416,712 other nonfederal; 1994,
$368,375 state appropriations, $45,430 industry and $90,822 other
nonfederal; and $1,185,249 for fiscal year 1995.
The research is being conducted at Oregon State University,
Washington State University and the University of Idaho. Oregon State
University is the lead university. The original objectives of the
project are still valid today. The main goal was to have a competitive
industry to satisfy the needs of those using blueberries. However, the
researchers anticipate that most of the objectives will be met within
five or six years. Keeping with the Administration's policy of awarding
research grants competitively, no further Federal funding for this
grant is requested. Research could be continued at the State's
discretion using formula funds.
These projects are evaluated on a yearly basis through a peer
review mechanism set up by the University of Maine and by staff from
the Cooperative State Research, Education, and Extension Service. Peer
review ensures that good scientific practices and rationales are used
while university and national staff reviews ensures that objectives are
addressed and budgets are within the policies and regulations.
southwest consortium for plant genetics and water resources
New Mexico State University, Los Alamos National Laboratory, Texas
Tech University, the University of Arizona and the University of
California at Riverside entered into a cooperative interdisciplinary
research agreement constituted as the Southwest Consortium on Plant
Genetics and Water Resources to facilitate research relevant to arid
and semi-arid land adaptation. The overall goal of the Consortium is to
bring together multidisciplinary scientific teams to develop innovative
advances in plant biotechnology and related areas to bear on
agriculture and water use in arid and semi-arid regions. The Southwest
Consortium for Plant Genetics and Water Resources is addressing the
need for an integrated program that identifies specific problems of
southwest agriculture, coordinates water and biotechnology research
aimed at solving these problems, and facilitates the transfer of this
information for commercialization. The specific research objectives of
the Consortium include the development of crops with resistance to:
drought and temperature extremes, adverse soil conditions, and pests
and parasites. The Consortium is also identifying technologies for
improved water and nutrient delivery. In view of significant needs for
research in high priority national interest topics such as improved
pest management systems, funding is not proposed to continue this
Special Research Grant. At the discretion of the State, Hatch Act or
other funding sources could be used to support this research. This
research has national, regional and local applications.
The original goals of this Consortium remain to facilitate research
to provide solutions for arid and semi-arid crop adaptation. Five
participating institutions have developed research plans consistent
with the Consortium's goals. Subgrants are awarded competitively
following peer review to support research that would solve problems
unique to southwest agriculture. Specific attention is given to
interdisciplinary agricultural research. The Consortium has discovered
a gene that makes plants more resistant to water stress. They have
identified a genetic marker for salt tolerance and have compared a
genetic system of wild plant species to domestic crops for differences
in drought response. One research team has cloned a gene from alfalfa
that controls an important biosynthetic pathway, another is working out
the complex metabolism of salt tolerance in resistant plant types, and
other teams have identified genes involved in pest resistance,
herbicide tolerance and nutritional enhancement of arid-land forage.
Grants have been awarded from funds appropriated as follows: fiscal
year 1986, $285,000; fiscal years 1987-1989, $385,000 per year; fiscal
year 1990, $380,000; fiscal years 1991-1993, $400,000 per year; fiscal
year 1994, $376,000; and fiscal years 1995-1997, $338,000 each year. A
total of $4,410,000 has been appropriated.
The Consortium's host institution, New Mexico State University,
reports matching nonfederal funds of $80,000 in state appropriations in
1992; $100,000 in 1993; $100,000 in 1994; $100,000 in 1995; and
$100,000 estimated in state appropriations for 1996. These funds exist
in the form of researchers' salaries, facilities, equipment maintenance
and administrative support.
Research is being conducted by a consortium of institutions
comprised of New Mexico State University, Los Alamos National
Laboratory, Texas Tech University, University of Arizona, and
University of California at Riverside. New Mexico State University is
the lead institution. The project was initiated in 1986 and
accomplished significant results in the first five years. Currently
additional and related objectives have evolved and anticipated
completion date for these is 2001. Many of the objectives of this
research have been met. Keeping with the Administration's policy of
awarding research grants competitively, no further Federal funding is
requested. Research could be continued at the State's discretion using
formula funds.
Each year the grant is peer reviewed and reviewed by CSREES's
senior scientific staff. A summary of that review indicated excellent
progress in achieving the objectives.
soybean cyst nematode, missouri
The research being funded by this grant is crucial to the
development of effective management strategies to understanding host-
parasite relations of the pathosystem and each of its components. Two
new nematode resistant soybean lines have been or will be released in
1996. The need for breeding soybean lines to develop resistant
varieties with a broad spectrum of resistance continues. More
fundamental research involves the utilization of new molecular
technologies to identify genes responsible for resistance. Other
aspects of the works relate to field management strategies for these
nematodes including cultural and biological applications. The soybean
cyst nematode, Heterodera glycines is the most serious pest of soybean
in the United States. The problems continue to increase in the Midwest
where 12 states have yield reductions in soybean because of this
nematode. Due to the nematodes' ability to adapt to resistant varieties
over time, new varieties are continually needed. Because there are
significant needs for research in high priority national interest
topics such as improved pest management systems, funds are not proposed
to continue this Special Research Grant. At the discretion of the
state, Hatch Act or other funding could be used to support this
research.
The original goal of this research was managing the soybean cyst
nematode, Heterodera glycines through the development of new resistant
soybean varieties and the use of biological and cultural management
strategies. To date, a new soybean variety that has resistance to
Heterodera glycines race 3 and moderator resistance to race 14 has been
developed and will be released shortly. This variety also has
resistance to Phytophthora sojae. Further, approximately 1,000 lines
resulting from resistant soybean lines were selected for progeny row
planting and 150 lines advanced to 1996 yield tests. Delsoy 5500, a
soybean variety in maturity group V, was released in 1996 to five state
experiment stations. A single dominant gene was determined to be a
condition of resistance by two PI lines of soybean for Heterodera
glycines, race 3 while there was a two gene difference between two PI
line for race 5. The cultural studies involving no-till and disk-till
varied in different locations while the effects of six cropping
sequences indicated that Heterodera glycines can develop in the winter
on certain host crops.
This is a renewal of grant that started in 1991. Grants have been
awarded from funds as follows: fiscal year 1980-1981, $250,000 per
year; fiscal year 1982, $240,000; fiscal years 19831985, $300,000 per
year; fiscal years 1986-1989, $285,000 per year; fiscal year 1990,
$281,000; fiscal year 1991, $333,000; fiscal years 1992-1993, $359,000
per year; fiscal year 1994, $337,000; and fiscal years 1995-1997,
$303,000 per year. A total of 5,358,000 has been appropriated.
The non-federal funds and sources provided for this grant were as
follows: $105,012 state appropriations in 1991; $84,368 state
appropriations in 1992; $168,017 state appropriations in 1993; $118,725
state appropriations in 1994; $33,498 state appropriations in 1995; and
$33,723 state appropriation in 1997.
This research is being conducted at the Missouri Agriculture
Experiment Station and the University of Missouri. The anticipated
completion date for the major objectives was 1996. Many of the
objectives are being met but genetic interaction of the soybean cyst
nematode/soybean is extremely complex. The anticipated completion date
of the continuing research is 1998. Keeping with the Administration's
policy of awarding research grants competitively, no further Federal
funding for this grant is requested.
The last evaluation of this project was a merit review in December,
1996. In summary, continued development of new management strategies
for the soybean cyst nematode is extremely important.
spatial technologies for agriculture, mississippi
CSREES has requested the university to submit a grant proposal that
has been received, and is being reviewed. This project will evaluate
the Components of Advance Spatial Technology for Agriculture (ASTA),
also known as precision farming, to improve the level of Crop
Management and thereby improve farm income while avoiding adverse
environmental impacts. Integration of ASTA Components included
computers, Global Positioning, Geographic Information System and Yield
Monitor will permit combining yield maps with agronomic data and
variable rate technology for application of seed fertilizer and
pesticides, as well as other management practices to specific sites as
precisely the right amounts for optimum production with minimum inputs.
The proposed research under this Special Research Grant will focus on
evaluation of site-specific technology evaluation and utilization for
the major agronomic crops in Mississippi. In addition, the technology
evaluation information would apply to many other crops where precision
farming systems are used. In view of significant needs for research in
high priority national interest topics such as improved pest management
systems, funds are not proposed to continue this Special Research
Grant. At the discretion of the state, Hatch Act or other funding could
be used to support this research. The original goal of this project is
to develop production management strategies utilizing site-specific
technologies to enhance crop production efficiencies and environmental
quality.
The work supported by this grant begins in fiscal year 1997, and
the appropriation for fiscal year 1997 is $350,000.
Research will be conducted at the Mississippi Agricultural
Experiment Station. The principal investigators anticipate the
completion date for these objectives to be in 2002. Keeping with the
Administration's policy of awarding research grants competitively, no
further Federal funding for this grant is requested. The proposal for
the initial year's funding is currently under agency review.
steep iii--water quality in pacific northwest
The STEEP III study was established in 1996 as the third phase of
the tri-state STEEP Program entitled ``Solutions to Environmental and
Economic Problems,'' to meet the needs of farmers and ranchers in the
Pacific Northwest in solving severe problems with soil erosion and
water quality, while maintaining economically and environmentally
sustainable agricultural production. The principal researcher believes
the Pacific Northwest wheat region is subject to severe wind and water
erosion, which has taken a heavy toll of the topsoil in a little more
than 100 years of farming. Due to the hilly terrain, water erosion has
reduced potential soil productivity in the high rainfall areas of the
region by about 50 percent. Wind erosion has reduced productivity on
the sandy soils in the lower rainfall areas. Also, off-site
environmental costs of water erosion are large. Although many of these
are difficult to measure, they include damage from sediment to
recreational areas, roadways, and other areas which costs taxpayers
millions of dollars annually. Wind erosion, which occurs mostly in the
spring and fall, also can be costly and environmentally damaging, and
causes increasing concerns for human health and safety from blowing
dusts. Water quality degradation is of increasing concern in the
agricultural areas of this region, since sediment is a major pollutant
of surface water runoff which may contain varying amounts of chemicals.
The complex hydrology of the region's landscape has made it difficult
to identify the sources of these chemicals in surface and ground
waters. In view of significant needs for research in high priority
national interest topics such as improved pest management systems,
funds are not proposed to continue this Special Research Grant. At the
discretion of the state, Hatch Act or other funding could be used to
support this research.
The primary goals are: to obtain and integrate new technical/
scientific information on soils, crop plants, pests, energy, and farm
profitability into sustainable management systems; to develop tools for
assessing the impacts of farming practices on soil erosion and water
quality; and to disseminate conservation technology to the farm. The
original STEEP and STEEP II projects for erosion control, and the
successor STEEP III program for erosion and water quality control, have
provided growers a steady flow of information and technologies that
have helped them meet economic, environmental, and resource
conservation goals. Through the adoption of these technologies, the
researchers believe wheat growers have been able to reduce soil
erosion, improve water quality, and maintain or increase farm
profitability. This has been accomplished through a tri-state, multi-
disciplinary approach of basic and applied research and through
technology transfer and on-farm testing to assist growers with applying
these research findings on their farms. The on-farm testing program has
been especially successful because growers are involved directly in the
research and education effort. For example, the on-farm testing program
has evaluated conservation options that growers can use to meet Farm
Bill conservation compliance requirements. STEEP programs have helped
position farmers with new conservation technologies well in advance of
deadlines to meet current and anticipated policy requirements. This
preparation protects farmers against potential penalties and loss of
government program benefits.
The work supported by this grant began in fiscal year 1991, and the
appropriations for fiscal years 1991-1993 were $980,000 per year; in
fiscal year 1994, $921,000; in fiscal year 1995, $829,000; and in
fiscal years 1996 and 1997, $500,000 per year. A total of $5,690,000
has been appropriated.
The non-federal funds and sources provided for this grant were as
follows: $938,812 state appropriations, $63,954 product sales, $156,656
industry, and $16,994 miscellaneous in 1991; $1,025,534 state
appropriations, $75,795 product sales, $124,919 industry, and $88,696
miscellaneous in 1992; $962,921 state appropriations, $62,776 product
sales, $177,109 industry and $11,028 miscellaneous in 1993; $1,069,396
state appropriations, $46,582 product sales, $161,628 industry, and
$22,697 miscellaneous in 1994; and $1,013,562 state appropriations,
$31,314 industry, and $107,151 miscellaneous in 1995. In 1996,
Washington received $231,724 in state appropriations; Oregon passed
Measure 5 which reduced revenues and imposed funding restrictions so
they were unable to provide any non-Federal cost-sharing or matching
funds; and Idaho contributed $81,525 state support, and $86,242 in
estimated non-Federal grant support, for a total non-Federal
contribution of $167,767.
The work under STEEP III will be done at laboratories and field
research sites at the University of Idaho, Oregon State University, and
Washington State University. Cooperative on-farm testing will be
conducted in cooperation with growers on their fields in Idaho, Oregon
and Washington. The STEEP II project was completed in 1995. The results
are compiled and are available as of January 1997 in a final, 5-year
report. The STEEP III project started in 1996 and will continue through
the year 2000 as a 5-year project. Keeping with the Administration's
policy of awarding research grants competitively, no further Federal
funding for this grant is requested. Research could be continued at the
State's discretion using formula funds.
The Cooperative State Research, Education, and Extension Service
program manager annually reviews progress reports and proposes new
research on the STEEP Program, and attends the annual meetings to
assess progress. However, the program is evaluated each year by three
committees: grower, technical, and administrative. Annual progress is
reported at an annual meeting and compiled into written reports. These
reports and the meeting are reviewed annually. Grower and industry
input is solicited at the annual meeting on research objectives and
accomplishments.
sustainable agriculture, michigan
This project is intended to develop agricultural production systems
that are highly productive and profitable as well as being
environmentally sustainable. More specifically, this project will
examine how to achieve a high nutrient flow from soil to crops and
animals, and back to soil, with low loss to ground and surface waters.
The principal researcher believes there is a need to better understand
the biological processes occurring in Michigan's high-nutrient-flow
crop and animal systems. With high water tables, networks of lakes and
slow-moving streams, and concern about environmental standards, field
contamination by agricultural production materials is a high priority.
In view of significant needs for research in high priority national
interest topics such as improved pest management systems, funds are not
proposed to continue this Special Research Grant. In addition, funding
for these projects could potentially be available through a competitive
grant under the Sustainable Agriculture Research and Education program.
The specific goals of this research are to develop an agroecological
framework for decision-making, develop crop and cover crop rotations,
develop water table management strategies, and develop rotational
grazing systems. Accomplishments to date include an extension
publication on agroecology, development of on-farm compost
demonstration sites, collection of research data and computer software
models on water table management, and completion of initial research
trials on rotational grazing at three sites in Michigan.
The work supported by this grant began in fiscal year 1994 with an
appropriation of $494,000; $445,000 were appropriated in fiscal years
1995 through 1997, bringing total appropriations to $1,829,000.
Matching funds were provided at the state level for $511,900 in fiscal
year 1994, $372,319 in fiscal year 1995, and $359,679 in fiscal year
1996.
This work is being carried out in Michigan at several locations by
Michigan State University. Locations include the Kellogg Biological
Station and the Upper Peninsula Experiment Station. This project is
currently scheduled to go through March 31, 2000. Keeping with the
Administration's policy of awarding research grants competitively, no
further Federal funding for this grant is requested.
Findings from this project have demonstrated that rotational
grazing reduces production costs, and increases net profits, compared
to traditional cow management. This project has also shown that
composting is an effective way of stabilizing livestock waste,
controlling odor, and improving nutrient composition for later land
application. The computer modeling done with this project has shown
reduced contamination of ground water through alternative management
practices employed in the project.
sustainable agriculture and natural resources, pennsylvania
This project studies the cycling of nutrients from animal
agricultural production systems through soil and water into crops and
back to food for animals or directly to humans in the case of vegetable
production. Environmental degradation is a major concern of
agricultural production near urban areas, especially with regard to
pest management and pesticide use, nutrient loading of soils and water
associated with chemical fertilizers and animal and poultry manures.
However, in view of significant needs for research in high priority
national interest topics such as improved pest management, funds are
not proposed to continue this Special Research Grant. At the discretion
of the State, Hatch Act or other funds could be used to support this
research. In addition, funding from the Sustainable Agriculture
Research and Education (SARE) competitive grants program could be
available for this type of research. The original goal of this research
was to understand the cycling of nutrients from animal agricultural
production systems through soil and water into crops and back to food
for animals or directly to humans in the case of vegetable production.
Conventional science in the late 1980's and early 1990's held that if
only all animal wastes were composted, the nutrient management problems
would disappear. However, the results of this research to date show
that this is a more complex problem. If farmers are to manage their
farm lands properly, indicators of soil quality and health must be
developed that can be used by agricultural producers and consultants.
Efforts under this project have been devoted to this goal.
The work supported under this grant began in fiscal year 1993. The
appropriation for fiscal year 1993 was $100,000, and $94,000 was
appropriated in each of the fiscal years 1994 through 1997 for a total
of $476,000. A total of $195,901 in matching support from university,
state and private industry sources was provided in fiscal year 1996.
Research is be conducted by the Pennsylvania State University with
cooperators throughout the state. The anticipated completion date for
the overall original project objectives in 1998. It is anticipated that
the original objectives will be met at the end of 1998. Keeping with
the Administration's policy of awarding research grants competitively,
no further Federal funding for this grant is requested.
There has not been a formal evaluation of this project, but
progress reports have been submitted to the agency and reviewed by our
scientific staff.
sustainable agriculture systems, nebraska
This project is aimed at integration of field crops, animal
production, agroforestry, livestock waste management, and diversified
enterprises to meet production, economic, and environmental quality
goals. Farmers and ranchers in Nebraska and throughout the Midwest face
increasing difficulties in maintaining profitable operations that are
sustainable under increased production costs and more stringent
environmental regulations. They continue to seek alternative production
systems, integration of crop and animal enterprises, value-added
products, including those from woody perennials, and new marketing
approaches to secure more of the food dollar. Work on crop residue
utilization is highly important to assess the loss of erosion
mitigation when grazing occurs as well as the benefits of winter forage
to production of lean beef. Erosion is still a major problem with
monoculture cropping, and work with contour strips, residue management,
and animal grazing is essential to provide good recommendations to
farmers for how to manage fragile lands. However, in keeping with the
Administration's policy of awarding research grants competitively, no
further Federal funding for this Special Research grant is requested.
At the discretion of the State, Hatch Act or other funding could be
used to support this research. In addition, funding for these projects
could potentially be available through a competitive grant under the
Sustainable Agriculture Research and Education program. This project
has involved several components, with a number of results to date. In
improving erosion control through grazing, calves were fed cornstalks
from October through March, and fed some supplements. The calves had
lower costs of production, and reduced need for grain feed. The
researcher's work on integrative cropping and agroforestry has shown
that diversifying rotations centered around soybeans has provided
increased economic returns. In the objective dealing with compost
utilization, compost has provided increased sources of nitrogen and
improved soil quality. Reports from this project have been disseminated
through extension and through a sustainable agriculture newsletter.
This project began in fiscal year 1992, with an appropriation of
$70,000; subsequent appropriations are as follows: $70,000 in fiscal
year 1993; $66,000 in fiscal year 1994; and $59,000 in fiscal years
1995 through 1997. Total appropriations to date are $383,000. Matching
funds provided for this research include state funds in the amount of
$25,313 for fiscal year 1992, $26,384 for fiscal year 1993, $27,306 for
fiscal year 1994, and $36,091 in fiscal year 1995.
Research is being conducted by the University of Nebraska at
several locations in Nebraska, with the major part of the project at
the Agricultural Research and Development Center near Mead, Nebraska.
The current project proposes work through March 31, 1998. It is
expected that current objectives of the project will be met by this
time period. Keeping with the Administration's policy of awarding
research grants competitively, no further Federal funding for this
grant is requested. Findings from this project have shown that young
cattle can be fed with lower costs if cornstalks are used as part of
their ration. This system also allowed for a cropping pattern that
reduced erosion. The corn, soybean, and agroforestry system showed the
highest net income of the systems tested.
sustainable pest management for dryland wheat, montana
This research will address pest issues of the dryland wheat areas
of eastern Montana. The proposed research is specifically designed to
address pest issues of the dryland wheat area of eastern Montana. In
view of significant needs for research in high priority national
interest topics such as improved pest management systems, funds are not
proposed to continue this Special Research Grant. At the discretion of
the state, Hatch Act or other funding could be used to support this
research. The original goal of this research was to provide pest
management information to dryland wheat producers of eastern Montana
where crop loss can approach $100 million per year.
The work supported by this grant begins in fiscal year 1997 and the
appropriation for fiscal year 1997 was $200,000.
Research will be conducted at Montana State University Experiment
Station. The project is proposed for a duration of 3 years and
therefore should be completed after fiscal year 1999. Keeping with the
Administration's policy of awarding research grants competitively, no
further Federal funding for this grant is requested.
The expected completion date of the project is fiscal year 1999.
Assessment of the precision of biological control organisms and
estimates of profitability, marketability, and risk will be used to
assess progress.
swine waste management, north carolina
CSREES has received the grant proposal from North Carolina State
University and is being processed at this time. The objectives of this
project are: (1) to develop a prototype system for treatment of animal
waste which will be used to study and optimize a new and innovative
swine waste management treatment process; (2) to provide funds for
additional technical staff to perform the work under this project; (3)
to purchase additional analytical equipment; and (4) to provide funding
for operation of the prototype facility. The prototype facility will
consist of a set of eight tanks which will be connected by piping or
hoses to enable researchers to test a variety of different strategies
for treatment of animal waste, including anaerobic or aerobic
digestion, removal of nutrients such as nitrogen and phosphorus, and
alterations in the sequence of these various operations. The principal
researcher has stated that North Carolina now ranks second in the
United States in both pork and poultry production. The problem of waste
management has become critical because adequate land for application of
waste in not available in some areas, water quality problems have been
noted in both surface and ground waters, nutrients from several lagoon
failures have created serious pollution problems in rivers and coastal
areas, and communities have become less tolerant of odor problems. In
view of significant needs for research in high priority national
interest topics such as improved pest management systems, funds are not
proposed to continue this Special Research Grant. At the discretion of
the state, Hatch Act or other funding could be used to support this
research. The original goal of this research was to enhance the design,
development, and implementation of alternative swine waste management
strategies and treatment systems. The project is awaiting the initial
award of funds so no progress can be reported at this time.
The work supported by this grant begins in fiscal year 1997 and the
appropriation for fiscal, year 1997 is $215,000. The exact amount of
non-federal funds to be contributed to this project in fiscal year 1997
is not known. However, faculty time from three individuals will be
contributed to this project so it is anticipated that the non-federal
contribution will be substantial.
This research will be conducted at North Carolina State University
in Raleigh, North Carolina. The anticipated completion date is October
1, 1997. The project is just getting started so there is no interim
progress to report at this time. Keeping with the Administration's
policy of awarding research grants competitively, no further Federal
funding for this grant is requested.
An evaluation of this project has not undertaken since fiscal year
1997 was the first year funds were appropriated for this grant.
tillage, silviculture and waste management, louisiana
This research has five components: Rice and Cotton Tillage, Dairy
and Poultry Waste Management, and Bald Cypress Silviculture. More
specifically, the Rice scientists are looking for ways to improve stand
establishment; the Cotton scientists are focusing on the use of tillage
system to combat harmful insect populations; the Waste Management
Scientists are quantifying the environmental and economic effectiveness
of approved dairy and poultry waste disposal systems; and the
Silviculturists are conducting a problem analysis of Louisiana's Bald
Cypress forest. Since the crops, forest, and waste issues extend beyond
the borders of Louisiana, this research may have application outside
the state. However, in view of the significant research needs on
national high priority issues, funding for this project is not
proposed. At the State's discretion, Hatch Act or other funding could
be used to support this effort.
The original goals were to: improve conservation tillage in rice
and cotton production, to determine the effectiveness of no-discharge
dairy waste treatment facilities, to determine permissible poultry
litter land-treatment rates, and to evaluate wetland forest
regeneration problems. All components of the project have established
research studies and are monitoring progress. Each year the principal
investigator initiates a review of the sub-projects and, in this
fashion, is encouraging good dialogue and cooperation among the sub-
project investigators and their respective departments. For instance,
Louisiana State University's Poultry and Forestry Scientists are
working closely to establish application rates and procedures for
applying poultry waste to forest plantations.
The work began in fiscal year 1994. The appropriation for fiscal
year 1994 was $235,000, fiscal year 1995 to 1996, $212,000 each year.
This totals $659,000. State funding in support of these areas of
research exceeds $750,000 annually.
Investigations are being conducted on the main campus at Louisiana
State University as well as the Experiment Stations at Calhoun and
Washington Parish. The original work was scheduled for completion in
1999. Early term objectives have been met even though they suffered the
loss of a promising graduate student. Keeping with the Administration's
policy of awarding research grants competitively, no further Federal
funding for this grant is requested.
The last field evaluation was completed on December 12, 1995. The
evaluation summary complimented the scientist on the interdisciplinary
components associated with this project, along with their investigative
procedures, report writing, and external networking.
tropical and subtropical research
The Tropical and Subtropical Research (T-STAR) Program is operating
in coordination with the Caribbean Basin Administrative Group and the
Pacific Basin Administrative Group. State Agricultural Experiment
Stations that are members of the Caribbean group are Florida, Puerto
Rico, and the Virgin Islands; members of the Pacific group are Hawaii
and Guam. Nonmember institutional interests are represented by the
Executive Director of the Southern Region Agri-cultural Experiment
Station Directors, who is a member of the Caribbean group, and the
Executive Director of the Western Region Agricultural Experiment
Station Directors, who is a member of the Pacific group. The
Agricultural Research Service also has representation on the two
groups, as does the CSREES scientist who manages the T-STAR grant
program. Funds for the program are divided equally between the two
Basin Administrative Groups. The research objective of the program
developed by the principal researchers is to improve the agricultural
productivity of many of the subtropical and tropical parts of the
United States. Special research grants have been awarded for research
on controlling insect, disease and weed pests of crops; increasing the
production and quality of tropical fruits, vegetables and agronomic
crops; promoting increased beef production through development of
superior pastures; detection of heartwater disease of cattle and the
influence of heat stress on dairy cattle reproduction; better use of
land and water resources; developing computer models for efficient crop
production systems and animal feeding systems; developing computer
models for land-use decisions; using biotechnology methodologies for
improving plant resistance to viral and bacterial diseases; using
biotechnology to develop non-chemical, or biological, strategies for
controlling insect pests; and potential for growing new speciality
crops. Fiscal year 1997 proposals have been requested.
The principal researchers believe there is a need for the T-STAR
program to provide research-generated knowledge that enables informed
choices in the responsible use of natural resources, facilitates the
health and well being of American citizens through improved food safety
and nutrition, provides frontline protection for the rest of the
nation's farms and ranches from serious plant and animal diseases and
pests, and enhances the ability of U.S. farmers to produce crops
efficiently and economically and/or to introduce new crops and
agricultural products with export potential to gain market share
abroad. On a regional basis, the T-STAR program addresses the unique
challenges of practicing tropical agriculture, that is presence of
pests year-round, heat stress, post-harvest processing to meet
regulatory requirements for export, etc. The local need of Americans
living in tropical regions of the nation for T-STAR knowledge-based
products to design and implement sustainable agricultural development
within fragile tropical agroecosystems--particularly on tropical
islands--and to develop new crops and niche markets. In view of
significant needs for research in high priority national interest
topics such as improved pest management systems, funds are not proposed
to continue this Special Research Grant program. At the discretion of
the States, Hatch Act or other funding could be used to support this
research.
The original goal of this research was to increase the production
and quality of tropical crops; control pests and diseases of plants and
animals; promote increased beef production and conserve land and water
resources. In fiscal year 1996, grants were supported for research on
control strategies for Melon thrips; the biochemical nature of
resistance to rust in nutsedge; development of bioherbicides for
nutsedges; development of tomato cultivars with resistance to the
spotted wilt virus; development of pheromones for monitoring and
controlling the citrus root weevil; reducing the effects of heat stress
in dairy cattle; development of a decision support system for vegetable
production; finding cucurbits with resistance to silverleaf, developing
a computer program for optimal supplementation strategies for beef and
diary cattle on tropical pastures; characterizing new strains of citrus
tristeza virus in the Caribbean basin; determining the economic
threshold for the citrus leaf miner on limes; using viral replicase
genes to engineer rapid detection methods for geminiviruses; developing
makers of bacterial spot resistance genes in tomato; breeding snap and
kidney beans for resistance to golden mosaic virus and for heat
tolerance; searching for resistance to papaya bunchy top disease;
developing weed controls for yam production; and bioengineering
ringspot virus resistance in papaya.
The operation of the tropical and subtropical research program was
transferred from ARS to CSREES, with CSREES funding being first
provided in fiscal year 1983. Funds in the amount of $2,980,000 per
year were appropriated in fiscal year 1983 and 1984. In fiscal year
1985, $3,250,000 was appropriated. In fiscal years 1986, 1987, and
1988, $3,091,000 was appropriated each year. $3,341,000 was
appropriated in fiscal year 1989. The fiscal year 1990 appropriation
was $3,299,000. The fiscal years 1991-1993 appropriations are
$3,320,000 per year; $3,121,000 in fiscal year 1994; $2,809,000 in
fiscal years 1995-1996; and $2,724,000 in fiscal year 1997. A total of
$46,546,000 has been appropriated.
For fiscal year 1996, more than $1 million of nonfederal funds were
provided to the T-STAR program from state appropriations. These state
funds were in the form of faculty salary time commitments and indirect
costs covered by the institutions.
This research is being conducted in Florida, Puerto Rico, Virgin
Islands, Hawaii, and Guam. Work is also being done in other Pacific and
Caribbean countries through agreements between institutions but not
using federal funds. Research on tropical crop and animal agriculture
to increase productivity, net profits, decrease harmful environmental
impacts, conserve water, and natural resources. The need to continue
with this project has been expressed by producers in the area,
importers in the U.S. mainland and the institutions involved. Keeping
with the Administration's policy of awarding research grants
competitively, no further Federal funding for this grant is requested.
The projects that are funded by the T-STAR Special Research Grant
have been peer reviewed by panels of scientists in the U.S. to assure
that good science is undertaken. Also as part of the grant renewal
process, progress reports are reviewed by the two Administrative Groups
and by the grant manager at the national level. Workshops in which
research results and their application for agricultural production are
developed every two years. Research papers are published in the
appropriate regional, national, and international forums available. The
development in 1995 of the Strategic Plan for T-STAR provided a
mechanism to define priorities, examine program direction, and
recommend operational changes. One of the principal points considered
was to bring the Caribbean and Pacific Basin components closer and
better coordinated. T-STAR and the coordination which it implies was an
outcome that will make this program better.
urban pests, georgia
This research is focused on urban pests with specific emphasis on
termites and ants. The principal researcher believes subterranean
termites and ants are significant economic pests in the southeastern
United States. Damage and control costs for termites in Georgia were
estimated at $44.5 million in 1993. It is estimated that Professional
Pest Control Operators apply over 23 million pounds of active
ingredient in and around homes each year. Chemicals currently
registered for controlling these pests are less efficacious than
desired and applied at an intensity that exceeds most agricultural
settings. In view of significant needs for research in high priority
national interest topics such as improved pest management systems,
funds are not proposed to continue this Special Research Grant. At the
discretion of the State, Hatch Act or other formula funding could be
used to support this research.
The goal of the termite research is to better understand the
foraging activities of subterranean termites and their responses to
selected environmental cues in order to tailor monitoring and
predictive strategies with efficacious conventional and alternative
methods of control. Specific accomplishments in the subterranean
termites research in 1996 are as follows:
A third year of data on termite foraging behavior was collected and
completed in 1996. Three years of data indicates Subterranean termite
colonies in Georgia are 500,000 termites per colony and are
characteristically smaller than those in Florida and Canada, but are
within the same size range of those in Mississippi. It is believed that
colonies of subterranean termites are nonindigeneous to Florida and
Canada and are not subject to the same competitive interactions as
those colonies that are native to Georgia and Mississippi. However,
structures attacked by subterranean termites in Georgia are often
attacked by more than one distinct colony. Three manuscripts have been
published and one is in press in this area of research. Studies with
termite baits in 1995 have demonstrated the seasonality of termite
feeding activity and behavior impacts the timing of application and the
timeframe for expected results from termite baiting. Research in 1996
demonstrate that the active ingredient used in termite baits must
display a lack of dosemortality effects for at least two weeks to
insure consistent, significant, and long-term suppression of termite
activity. Three manuscripts have been published. Mitochondrial DNA
preliminary work indicates that human transport of termite-infested
materials is the primary mode of termite dispersion and could result in
a higher frequency of hybrid formation within the gentis
Reticulitermes. One manuscript has been accepted for publication.
The research supported by this grant began in fiscal year 1991, and
the appropriation for fiscal years 1991-1993 was $76,000 per year. In
fiscal year 1994 the appropriation was $71,000 and in fiscal years
1995-1997 the appropriation was $64,000 each year. A total of $491,000
has been appropriated. The non-federal funds and sources provided for
this grant by fiscal year were as follows: 1991--none, 1992--$26,000,
1993--$18,000, 1994--$59,530 and 1995--$59,539.
This research and technology transfer is being conducted at the
Georgia Agricultural Experiment Station in Griffin, Georgia. The grants
have been processed on a year to year basis pending the availability of
funds, however, the original objectives were essentially a five- to
eight-year plan of work. CSREES entomologists judge that excellent
progress has been made on foraging behavior and the identification and
development of termite baits. The publication of the research results
has also been excellent. Keeping with the Administration's policy of
awarding research grants competitively, no further Federal funding for
this grant is requested.
This project has been evaluated on an annual basis by CSREES, and
the progress has been excellent. Last year we documented the progress
on foraging behavior, genetic isolation of termite colonies, new
chemistry soil termiticides, the killing potential and repellency of
several strains of the fungus Metarhizium anisopliae, termite baits and
feeding activity and behavior that impacts the time frame for expected
results from termite baiting. A peripheral objective on Argentine ants
was completed last year with the development of commercial baiting
stations used on the outside periphery of buildings. This method was
proven effective in preventing infestations in apartment complexes and
reducing ant complaints by residents.
viticulture consortium, ny & ca
The University of California and Cornell University in New York
received funding in the spring of 1996 for research on varietal
responses of grapes, modeling of water requirements, management of
diseases including phyloxera and other cultural aspects of grape
production. The fiscal year 1996 funds will be used by the lead
institutions to fund projects in the various grape producing states
within their region. The research being carried out is designed to help
the viticulture and wine industries remain competitive in the United
States and in the global market. Both these industries have a positive
effect on the United States balance of payments. In view of the fact
that there are significant needs for research in other high priority
national interest topics, such as improved pest management systems,
funds are not proposed to continue this Special Research Grant. At the
discretion of the State, Hatch Act or other funding could be used to
support this research. The original goal of this research is to
maintain or enhance the competitiveness of the U.S. viticulture
industry in the global market.
Grants have been awarded from funds appropriated as follows: fiscal
year 1996, $500,000; fiscal year 1997, $500,000. The non-federal funds
used in conjunction with this grant have not been accounted for because
these projects are in their first year and have not yet been evaluated.
However, monitoring of non-federal funds used to further the projects
will be carried out.
Research is being conducted in various states which include
California, Washington, New York, and Pennsylvania. A recent review of
the project revealed the research priorities set by the guidance group
were not all addressed nor will they be in the near future. Keeping
with the Administration's policy of awarding research grants
competitively, no further Federal funding for this grant is requested.
water conservation, kansas
This research program is designed to develop and disseminate
technical and economic information on the efficient use of water for
irrigated crop production in western Kansas. The following objectives
comprise this program for the fifth year of the project:
1. develop regression models to estimate the longevity of
subsurface drip irrigation systems using calculations of annual system
performance deterioration based on 11 years of operating pressures and
flow rates;
2. develop efficient advanced irrigation management procedures for
subsurface drip irrigation systems for corn;
3. identify and evaluate the technically and economically feasible
modifications to irrigation systems for irrigation of corn, wheat and
grain sorghum as affected by well capacity, institutional water
restrictions, and the new federal farm program and;
4. increase the availability of irrigation research information and
best management practice recommendations to Kansas irrigators through a
series of extension bulletins and updates based on research-based
information.
An advanced study was conducted to evaluate the water use
efficiency of high frequency deficit subsurface drip irrigation for
corn production. The 1994-1996 results indicate that corn yields can be
maintained at a level nearly equal to fully irrigated crop production
at significantly lower water inputs when daily deficit irrigation is
used. An advanced substudy was initiated in 1996 to develop water/land
allocation strategies for corn using subsurface drip irrigation. This
substudy was initiated as a result of the changes in the federal farm
program which allow greater planning flexibility. These changes removed
the need of irrigators to protect base acreages, so economic efficiency
will be a strong determinant in water/land allocation strategies. This
substudy along with economic and system longevity analyses will be
continued in 1997.
Water is a precious resource to farmers in the Great Plains. Corn
is a principle crop for feeding livestock. To produce corn in the Great
Plains, additional water applied as irrigation enhances production. The
most common irrigation methods are furrow irrigation or center pivot
irrigation. The need to conserve water has turned attention to drip
irrigation as an efficient alter-natives. In view of significant needs
for research in other high priority national interest topics such as
improved pest management systems, funds are not proposed to continue
this Special Research Grant. At the discretion of the state, Hatch Act
or other funding could be used to support this research.
The research goal is to determine the feasibility of subsurface
drip irrigation and other alternative irrigation systems in western
Kansas to sustain irrigated corn production to support the beef feedlot
industry. The project also supports an educational effort through
collection and dissemination of information on efficient irrigation
methods. The project has a significant and active technology transfer
and extension program. In 1996 alone, one paper was given at an
international conference, three refereed journal articles were
submitted, two extension publications were published, and ten other
miscellaneous presentations and publications were made. The computer
program Irrigation Economics Evaluation System is complete and will be
distributed by the Kansas State University Cooperative Extension
Service in 1997.
The work supported by this grant began in fiscal year 1993 with an
appropriation of $94,000; $88,000 in fiscal year 1994; and $79,000 in
fiscal years 1995-1997 each year. The total funds appropriated are
$419,000.
The non-federal funds and sources provided for this grant were as
follows: $781,232 state appropriations, $55,205 product sales, $60,907
industry and miscellaneous in 1991; $863,408 state appropriations,
$37,543 product sales, $35,484 industry and miscellaneous in 199'2;
$833,324 state appropriations, $54,964 product sales, $144,225 industry
and miscellaneous in 1993. Amounts for other fiscal years are not
available.
The research is being conducted at Kansas State University. The
field portion of the research is being conducted on Research Centers at
Colby and Garden City, Kansas. Additional work is being carried out on
campus at the Departments of Agronomy and Agricultural Economics in
Manhattan, Kansas. The original anticipated completion date for the
project was May 31, 1998, following the funding in fiscal year 1997.
The original objectives of the project appear to be on track for
completion by that date. Keeping with the Administration's policy of
awarding research grants competitively, no further Federal funding for
this grant is requested.
The project has been peer reviewed. The reviewers felt the project
concept to be valid and the timetable for accomplishments to be on
target. The research as outlined in the proposal is within the mission
of the Agricultural Experiment Station and is a high priority to Kansas
agriculture.
water management, alabama
The program components of the Water Management, Alabama project
include: renovation as a water quality enhancement practice for
pastures fertilized with poultry waste, the efficacy of a new biocidal
polymer water filter against Cryptosporidium oocysts and Giardia cysts,
improving effluent quality of the in-pond raceway fish culture system
through removal and infiltration of fish wastes, relationships between
landscape characteristics and nonpoint pollution inputs to coastal
estuaries, and resource management for enhancement of environmental
quality as conservation reserve program contracts expire in the Alabama
Black Belt.
The principal researchers believe that perennial pastureland is the
most common disposal area for waste collected from confined animal
operations in the humid Southeast. This is especially true in broiler
chicken production areas such as Alabama, where litter is generated,
since this material can be used as both fertilizer and feed in
associated cattle operations. Most broiler production in this region is
highly concentrated where topography and soil fertility limit row crop
production. Although application of high rates of poultry wastes to
perennial pastures in these areas has the potential to cause
environmental pollution, operators have few alternatives to land
application. This research provides solutions and/or potential
recommendations for utilization of broiler litter in the best manner to
protect water from both nitrogen and phosphorous application. With the
considerable acreage that is coming off the Conservation Reserve
Program, this research will give guidance to landowners and government
agencies in the best use for the land. Published guideline handbooks
have been distributed and the researchers believe they are providing
much assistance to landowners, county agents, Natural Resources
Conservation Service personnel, and others in applying best management
practices.
The potential for Geographic Information Systems to be major tools
for determining the best use for land so as to protect the environment
will be enhanced because of this study. Entire watersheds can be
protected as landowners, land use planners and government entities make
decisions for the future. The data provided by this study are
particularly important in light of proposed revisions to the Coastal
Zone Management Act. Given concerns regarding land use activity in the
coastal zones, these data may provide indications of which combinations
of land use and land forms may be problematic in terms of water
quality. In view of significant needs for research in high priority
national interest topics, such as improved pest management systems,
funds are not proposed to continue this Special Research Grant. At the
discretion of the state, Hatch Act or other funding could be used to
support this research.
This is a new grant, however, water quality work has been ongoing
in Alabama in recent years. This previous research will be used to
strengthen and backdrop work for this grant. Previous research has
shown the relationships between cattle foot traffic, forage canopy,
ground cover, root biomass, and nutrient uptake for grazed versus hayed
tall fescue following two renovation tillage treatments. As a followup
to this research, 25 Conservation Reserve Programs were surveyed. This
included 300 sampling points, each covering 300 acres. Instrumentation
was installed on several of the properties for measurement of soil
erodability. Non-point source pollution in streams is being examined
using the Geographic Information System and Remote Sensing analysis
tools to assess the relationships between land use complex and water
quality. Lands within each sub-watershed were classified according to
their use, and the location of forested land use relative to the stream
channel was noted. A linkage model was developed which relates land
use/land cover with non-point source pollution.
The work supported by this grant begins in fiscal year 1997 and the
appropriation for fiscal year 1997 is $170,000. The non-federal funds
and sources provided for this grant for fiscal year 1996 are as
follows: $894,344 state appropriations; and $572,342 miscellaneous. It
is anticipated that the University will more than match federal funds
for this grant with state appropriations and miscellaneous non-federal
funds in fiscal year 1997.
This work is being conducted at the Auburn University Main Campus,
and at the Upper Coastal Plain Substation at Winfield, Alabama, the
Tennessee Valley Substation at Belle Mina, Alabama, the Black Belt
Substation at Marion Junction, Alabama, the Sand Mountain Substation at
Crossville, Alabama, and on private forest land near Greenville,
Alabama. It is anticipated that the completion date of the project will
be August 31, 1998, even though selected objectives will be met sooner.
Work is proceeding on all objectives and some of them have already been
met, Some objectives will be completed at the end of summer 1997 and
others will continue through August 31, 1998. Keeping with the
Administration's policy of awarding research grants competitively, no
further Federal funding for this grant is requested.
The Program Manager from the Cooperative State Research, Education,
and Extension Service reviewed and evaluated the proposed research
prior to the award of the grant, and reviewed and evaluated the annual
progress reports from the Principal Investigator, following internal
review by the University. Annual progress reports are due to be
submitted by the individual research investigators to the University on
March 1, 1997, after which a University evaluation will be made on each
segment with the project leaders and department heads during March and
April 1997, prior to submission to the Cooperative State Research,
Education and Extension Service for review and approval.
water quality
The Cooperative State Research, Education, and Extension Service
(CSREES) continues support of this national, competitively-awarded
grants program as part of USDA's Water Quality Initiative. The program
supports research to investigate the impacts of non-point source
pollution from agriculture on water quality and to develop improved,
sustainable agricultural practices and systems that protect the
environment and are economically profitable. Also, this program
supports research on five Management Systems Evaluation Area (MSEA)
projects as part of the Midwest Initiative on Water Quality to develop
new farming systems that protect water quality, with research located
at 10 sites throughout the Corn Belt. This program is conducted jointly
with the State Agricultural Experiment Stations, USDA's Agricultural
Research Service and Natural Resources Conservation Service, the U.S.
Environmental Protection Agency, the U.S. Geological Survey, extension
specialists, and other Federal, State, and local agencies. The water
quality grants have supported more than 300 research projects across
the country. In fiscal years 1996 and 1997, funds were awarded to the
five MSEA projects in the Midwest to continue the water quality systems
research started in 1990. In 1996, new projects were initiated as
Agricultural Systems for Environmental Quality. The new projects focus
on watershed-scale agriculture production systems that reduce pollution
of soil and water while maintaining productivity and profitability.
Concerns have been raised by the public about the possible risks to the
environment and soil and water quality resulting from the use of
agricultural chemicals. Better methods detection of minor amounts of
chemicals in water have made the public, farmers, and policy-makers
more concerned about the use and management of these agricultural
chemicals and wastes, while meeting the challenge of maintaining the
efficiency and productivity of agricultural production systems. Water
quality continues to be of high priority at local, regional, and
national levels. Results from the research are providing technologies
to reduce pollutants, guidelines for site-specific farming, and
improved farming systems.
The original goals of the program were to determine the extent to
which agriculture has impacted ground water quality, and to develop
new, improved, cost effective agricultural systems that enhance ground
water quality. During the past three years, focus and allocation on
resources have increased for surface water quality. Major progress has
already been made on these goals. examples of some of the results of
recently completed research include the following:
1. Nitrogen continues to be of concern as a pollutant in our
Nation's waters. The rapid expansion of the Hypoxic zone in the Gulf of
Mexico in 1993 has focused additional attention on nitrates coming from
several sources, including agriculture. Nitrogen testing research and
implementation of the Pre-sidedress Nitrogen Test in the Northeast and
Midwest is helping producers match the supply and demand for nitrogen,
thus reducing excess application.
2. Crop rotations can significantly reduce nitrate pollution. In
the Pacific Northwest, nitrate lost from the root zone of irrigated
potatoes can be effectively recaptured by following with a grain or
forage crop.
3. The Management System Evaluation Area modeling group has
adapted, improved, and verified the usefulness of the Root Zone Water
Quality Model as a tool for extending MSEA results beyond the research
sites. The model predicts the movement of water and agricultural
chemicals.
The work under the Water Quality Program began in fiscal year 1990
with an appropriation of $6,615,000. The subsequent appropriations were
as follows: $8,000,000 in fiscal year 1991; $9,000,000 in fiscal year
1992; $8,950,000 in fiscal year 1993; $4,230,000 in fiscal year 1994;
and $2,757,000 in fiscal years 1995 through 1997. A total of
$45,066,000 has been appropriated for the Special Research Grants Water
Quality Program. The non-federal funds in support of the Water Quality
Program, provided by state appropriations, industry, product sales, and
other local sources, have averaged approximately $1,000,000 annually
since the program began in 1990.
Funds provided under the Water Quality Program have been awarded to
institutions in virtually every state, so work is being carried out in
all parts of the country. The MSEA projects of the Midwest Initiative
on Water Quality are headquartered in Iowa, Minnesota, Missouri,
Nebraska, and Ohio, with satellite locations in North Dakota, South
Dakota, and Wisconsin. Three new projects located in Indiana, North
Carolina, and Ohio were initiated in fiscal year 1995. The original
goals of the USDA Water Quality Research Plan were to: (1) assess the
seriousness and extent of agriculture's impact on ground water quality,
and (2) develop new and improved agricultural systems that are cost
effective and enhance ground water quality. The original project was
developed for five years with the expectation that it would be reviewed
and possibly extended beyond the five year period if warranted. The
1995 review of the program identified a need for increased attention to
surface water quality problems. The research funded under the Special
Research Grants Program has produced significant progress in
understanding the impacts of agricultural practices on surface and
ground water pollution, and in developing improved agricultural systems
that are economically and environmentally sustainable. Implementation
of some of these improved agricultural systems is already underway in a
number of states. The focus over the next five years will be on
developing and implementing agricultural systems that utilize the
results of research funded under this program. The March 1995 Water
Quality Users Conference brought together research findings and new
technologies that have been developed.
An external review team evaluated the Management System Evaluation
Areas and associated component projects. All MSEA projects have an
impressive record of successfully implemented interdisciplinary teams
to study water quality problems. Credibility and confidence in
experimental data has been assured by implementation of quality
assessment/quality control procedures, and a diversified delivery
system/educational outreach effort will be a necessary key component of
MSEA success.
weed control, north dakota
The project is designed to reduce the environmental pollution
caused by the extensive usage of herbicides for weed control and
provide growers with environmentally safe weed control systems. The
present project addresses three areas; one being crop production
practices, second, weed biology and herbicide resistance, and third,
efficient herbicide usage. In crop production practices, systems
experiments have been established at three locations that include crop
rotation, tillage, seeding method and timing; these variables are
incorporated into sustainable, reduced tillage and conventional
systems. Results being monitored include the effect of weed control
intensity on long-term weed infestations and economic returns. The
emphasis in weed biology research is with kochia, wild oat, and green
foxtail that are herbicide resistant. In efficient herbicide usage,
several factors are being studied such as application methods to
improve weed retention of herbicides and weed-detecting sprayers to
treat only areas where weeds are present. The research addresses new
methods to control weeds using systems control with multi-year, multi-
crop rotations, reduced pesticide applications, that better simulate a
typical on-farm sequence than short-term grants. Some variables
included in the research are reduced pesticide applications and
techniques to enhance herbicide efficacy. In view of significant needs
for research in high priority national interest topics such as improved
pest management systems, funds are not proposed to continue this
Special Research Grant. At the discretion of the state, Hatch Act or
other funding could be used to support this research.
The original goal was to develop new, efficient weed control
methods. To accomplish this, long-term field experiments have been
initiated to obtain basic crop-weed biology and production system
information. The first three years of the rotation experiments have
been completed in 1993 through 1995. Changes in weed populations were
beginning to occur in 1995 and the environmental conditions were
atypically wet during these three years; these observations support the
need to complete at least two cycles of the rotation for a total of at
least eight years to obtain reliable scientific information. The
improved efficiency of weed control method has developed adjuvants to
overcome the antagonism of salts, which naturally occur in water and
reduce the efficacy of some herbicides. Another approach is adjuvants
to reduce the herbicide rate required and/or to improve their
performance consistency. Kochia genetic lines have been developed that
are homozygous for resistance to various studies to determine
inheritance and possible spread of herbicide resistance. Fields are
being monitored for the development of kochia resistance to dicamba. A
better understanding of how herbicide-resistant weeds occur in a
population should be useful to developing methods to prevent herbicide
resistance from becoming an unmanageable problem.
The work supported by this grant began in fiscal year 1992 and the
appropriation for fiscal years 1992 and 1993 was $500,000 per year;
$470,000 in fiscal year 1994; and $423,000 in fiscal years 1995 through
1997. A total of $2,739,000 has been appropriated.
The non-federal funds and sources provided for this grant were as
follows: no matching in 1991; $27,030 state appropriations in 1992,
$48,472 state appropriations in 1993, $41,969 state appropriations in
1994, $71,847 state appropriations in 1995, and an estimated $70,000
state appropriation in 1996.
Research is being conducted at North Dakota State University. The
original anticipated completion date was a minimum of 5 years, with an
additional 5 years currently being projected. The original objectives
have been satisfactorily met, but the research with biological traits
of herbicide-resistant weeds require more time, depending upon whether
the traits prove to be simply inherited or involve multiple genes with
a complex inheritance. The anticipated completion date of the
additional and related objectives is 2001. Keeping with the
Administration's policy of awarding research grants competitively, no
further Federal funding for this grant is requested.
Each year the grant is peer reviewed and reviewed by CSREES's
senior scientific staff. A summary of that review indicated excellent
progress in the achieving the objectives.
wheat genetics, kansas
This project provides partial support for the Wheat Genetics
Resource Center at the University of Kansas, which focuses on
collection, evaluation, maintenance and distribution of exotic wheat
related germplasm needed to develop new wheat cultivar resistant to
disease, insects, and environmental stress. The principal researcher
believes most cultivated varieties of wheat are derived from common
sources. They lack the rich genetic diversity needed to develop
resistance to diseases, insects and environmental stress. The
replacement of genetically rich primitive cultivar and land races by
modern, more uniform cultivars all over the world is causing erosion of
wheat germplasm resources. New pests or those that have overcome
varietal resistance pose a constant threat to the nations wheat
production. Genetic resistance often resides in wild relatives of
wheat. The researchers believe this program, which was established in
Kansas, is providing service to wheat breeders nationwide. In view of
significant needs for research in high priority national interest
topics such as improved pest management systems, funds are not proposed
to continue this Special Research Grant. At the discretion of the
state, Hatch Act or other finding could be used to support this
research. The original goal of this research was to enhance the genetic
diversity available to wheat breeders nationally and internationally by
collecting, evaluating, maintaining and distributing germplasm derived
from wild relatives of wheat. To date 25 germplasm releases have been
made containing new genes for resistance to such pests as Hessian fly,
greenbug, leaf rust, soilborne mosaic virus and Russian wheat aphid.
Germplasm stocks with resistance to leaf rust and powdery mildew are
under development. Evaluation of germplasm for important resistance
genes was carried out by Center scientists and cooperating
institutions. The Center filled 30 requests from U.S. wheat breeders
for seed from the germplasm collection and 57 requests for seed of
germplasm releases, as well as large numbers from international
breeders.
Work supported by this grant began in fiscal year 1989.
Appropriations were for fiscal year 1989, $100,000; fiscal year 1990,
$99,000; fiscal year 1991, $149,000; fiscal years 1992-1993, $159,000
per year; fiscal year 1994, $196,000; and fiscal years 1995-1997,
$176,000 each year. A total of $1,390,000 has been appropriated.
The nonfederal funds provided for this grant were as follows:
$493,285 state appropriations, $31,414 product sales, and $84,610,
other non-federal in 1991; $414,822 state appropriations, $14,259
product sales, and $102,086 other non-federal in 1992; and $533,848
state appropriations, $32,297 product sales, and $163,937 non-federal
in 1993, $468,960 in 1994; $563,671, non-federal funding for 1995 and
$457,840 of non-federal support for 1996.
This research is being conducted at Kansas State University by the
Wheat Genetics Resource Center. The collection, evaluation and
enhancement of Wheat germplasm is continual process. Therefore this
project does not have a defined completion date. The principal
researcher anticipates continuing the work for an indefinite period of
time. In keeping with the Administration's policy of awarding research
grants competitively, no further Federal funding for this grant is
requested.
This Special Grant has not been subjected to a comprehensive
review. However each annual proposal is peer reviewed at the
institution and reviewed by CSREES scientists.
wood utilization research
The new wood utilization knowledge and technologies discovered help
maintain a vigorous, competitive, domestic forest industry. This, in
turn, helps achieve sustainable forests since improved utilization
extends timber supplies. The research includes: meeting environmental
objectives in timber harvesting and forest products manufacture;
extending the timber resource through research, including management;
exploiting pesticides developed from forest trees; wood machining;
introducing small forest products industries to wood technology; and
developing new products from wood and recycled materials. Research at
four of the centers improves the utilization of those forest species
that grow in these regions, i.e. western conifers, southern pines, Lake
States hardwoods, and northeastern forests. The other two centers
conduct research in specific subdisciplines, i.e. machining of wood and
incubator technology transfer. The wood machining work at North
Carolina State University improves wood machining. Wood industry
incubator work in Duluth, Minnesota, contributes to rural development
of local economies. In view of significant needs for research in high
priority national interest topics such as improved pest management
systems, funds are not proposed to continue this Special Research
Grant. At the discretion of the State, Hatch Act or other formula
funding could be used to support this research.
The original goal was to generate new knowledge that would benefit
the forest industry. This goal has been fine-tuned to place additional
emphasis on environmental stewardship, resource extension, technology
transfer, and scientist education. Research that extends the resource
benefits forest ecosystems and increases the competitiveness of the
forest products industry. In addition, the principal researchers
believe consumers benefit from the more efficient production. For
example, quality control procedures have saved $200,000 per year in one
mill and $300,000 per year in a second through reduced waste. The
researchers estimate that handheld calculator programs developed by
this research have resulted in savings of nearly $1,000,000 to
woodworkers. Research has reduced the cost of cleanup of superfund
sites by tenfold due to the use of biodeterioration technology. Water
quality is believed to have been improved due to the introduction of
bacteria that consume polychlorinated phenols in contaminated water
sources. Laser cutting of wood holds potential for high savings in raw
materials. Systems analysis of sawmill operations has allowed managers
to improve the efficiencies of operation. Improvements in membrane
pressing of cabinet doors has improved production and product quality.
The research developed an electric wood defect deterioration system to
improve automated production systems. These are a few examples of the
benefits from continuing research in wood utilization. Each of these
centers has an advisory committee that establishes priorities and peer
reviews research proposals.
Grants have been awarded from funds appropriated as follows: fiscal
year 1985, $3,000,000; fiscal years 1986 through 1989, $2,852,000 per
year; fiscal year 1990, $2,816,000; fiscal years 1991 and 1992,
$2,852,000 per year; fiscal year 1993, $4,153,000; fiscal year 1994,
$4,176,000; fiscal year 1995-1996, $3,758,000 per year; and $3,536,000
in fiscal year 1997. A total of $42,309,000 has been appropriated.
Mississippi State University non-federal funds were: State
appropriations $2,498,800, $2,178,725, $2,353,225, and $2,331,691,
$2,650,230, and $2,778,535 for 1991, 1992, 1993, 1994, 1995, and 1996,
respectively. In addition, industrial funds averaged $553,700 for those
4 years in support of the Mississippi Forest Products Laboratory.
Oregon State University state appropriations were: $1,337,962,
$1,394,304, $1,256,750, $1,252,750, 1,417,755, and $1,117,000 for 1991,
1992, 1993, 1994, 1995, and 1996, respectively. Estimated non-public
support averages $500,000 per year. Michigan State University non-
federal contributions for 1994 totaled $910,481. Three new locations
were added in 1994: University of Minnesota-Duluth non-federal match
was $590,000, $550,000, and $560,000 for 1994, 1995, and 1996. North
Carolina State University was $126,000, $165,000, and $135,000 for
1994, 1995, and 1996. University of Maine was $600,000, $445,723, and
$459,100 for 1994, 1995, and 1996.
There are six locations. The initial three--Oregon State
University, Mississippi State University, and Michigan State
University--were joined by the University of Minnesota-Duluth, North
Carolina State University, and the University of Maine in fiscal year
1994. The original objective was to build and maintain strong regional
centers of wood utilization research to address the Nation's needs for
wood products through strengthening university wood products research
and graduate education. These centers have been established, and wood
utilization improves each year as a result. Projects begun in 1997 will
be completed by 2001. Keeping with the Administration's policy of
awarding research grants competitively, no further Federal funding for
this grant is requested.
Progress reports from the six centers are reviewed yearly or more
frequently. Center directors last met together in June 1996. Centers
all have advisory committees which meet periodically. The U.S.
Department of Agriculture conducts informal on-site reviews
periodically. The Duluth and Oregon sites were visited in 1996. A
Departmental panel reviewed the original three centers in 1992 and
1993. At that time, the original objectives were broadened. The centers
have responded to the review recommendations by increasing their focus
on meeting environmental objectives by conducting research leading to
sustained timber production; extending the timber supply through
improved processing; developing new structural applications for wood;
and developing wood extractives to substitute for pesticides,
preservatives, and adhesives.
wool research
The overall goals for this research are the development of
objective measures of wool, mohair, cashmere and other animal fibers to
increase profitability of the sheep and Angora goat industries.
Specific objectives include: develop and evaluate measurement
techniques for rapid objective evaluation of wool, mohair, cashmere and
other animal fibers; increase the use of objective measurements to
increase fiber production, quality and income to producers, and
increase consumer acceptance of wool fabrics. The fiscal year 1996
grants terminate between January 1997 and April 1998. The 1997 grant
proposals have been received and are being reviewed. Collaboration
exists among researchers in Texas, Wyoming, and Montana associated with
this grant and other Federal, university, and industry scientists on a
wide basis to assure responsiveness to the needs of those involved in
wool and mohair production, marketing, and processing. In view of
significant needs for research in areas that are high priority
nationally, no further funding is proposed for this project. At the
discretion of the State, Hatch Act of other funding could be used to
support this effort.
The overall goal for this research to develop objective measures of
wool, mohair, cashmere and other animal fibers to increase
profitability of the sheep and Angora goat industries remains the
primary emphasis of the research. Computer software programs for the
automatic image analysis system are being evaluated and improved for
the purpose of measuring the average diameter and distribution of
animal fibers. Software is also being modified to permit rapid,
accurate measurement of other fiber properties such as fiber style
crimp and character. Near infrared reflectance analysis was compared to
standard practices for yield measurement of mohair. Progress was again
made to improve the quantity and quality of fibers produced from sheep
and goats. Selection and crossbreeding experiments, part of a national
study, were conducted to evaluate wool characteristics, reproduction,
and lamb quantity and quality of crosses between Merino and Rambouillet
breeds. Correlation studies were completed to compare the measurements
made by the laser scan image analyzer with those made by
microprojection. Numerous scientific and technical papers were
published during the past year.
Grants have been awarded from appropriated funds in the amount of
$150,000 for fiscal years 1984-1985; $142,000 per year for fiscal years
1986-1989; $144,000 for fiscal year 1990; $198,000 for fiscal year
1991; and $250,000 per year for fiscal year 1992-1993; fiscal year
1994, $235,000; and fiscal years 1995-1997, $212,000 each year. A total
of $2,581,000 has been appropriated.
The non-federal funds and sources provided for this grant were as
follows: $150,913 state appropriations, $11,800 product sales, $5,817
industry, and $3,556 miscellaneous in 1991; $111,394 state
appropriations, $25,451 product sales, $41,442 industry, $3,068
miscellaneous in 1992; and $152,699 state appropriations, $39,443
product sales, $40,804 industry and $3,556 miscellaneous in 1993;
$150,094 state appropriations, $35,284 product sale, $36,484 industry
and $3,556 miscellaneous in 1994; and $67,345 state appropriations,
$10,000 product sales; $34,325 industry contributions in 1995; and
$39,033 non-federal support in 1996.
The research is in progress at the Texas A&M University, Texas
Agricultural Experiment Station, the University of Wyoming and Montana
State University. The original objectives to improve the efficiency and
profitability of wool, mohair and cashmere production and marketing are
still valid. Specific objectives for individual laboratories and
experiments are continually revised to reflect the changing priorities
for the wool and mohair industries and consumers. It is anticipated
that five years will be required to complete the current research.
Keeping with the Administration's policy of awarding research grants
competitively, no further federal funding for this grant is requested.
The principal investigators from the three institutions meet
annually to evaluate progress and prioritize research according to
industry needs. The research for this Special Grant is a component of a
regional research project which entails coordination by the agency,
reporting of accomplishments annually, and overall project peer review
every three years. Last year the regional research project was reviewed
and approved for renewal. Annually, Special Grant proposals are
submitted to the agency for review and approval. The design and
procedures in the most recent proposal were deemed to be adequate to
supply the data necessary to fulfill the objectives. Excellent
facilities and equipment are available to provide scientists with
complete fleece analyses for objective measurements of wool and mohair.
The investigators are able to conduct unique experiments as a result of
the very specialized instrumentation available for the project. The
agency representative periodically visits the research facilities and
reviews progress, the most recent in May of 1994. It was concluded that
the research was addressing the priorities of the U.S. wool and mohair
industry, contributing to the introduction of value-based marketing
systems, assisting in the establishment of a nucleus for U.S. cashmere
production, and being effectively coordinated with other research
laboratories. Research results are annually reported to the industry
and the agency providing the means for adoption of new practices to
improve the marketing of wool and mohair.
agricultural development in the american pacific
The Agricultural Development in the American Pacific (ADAP) project
allows the Land Grant research, extension, and instruction programs of
the five participating institutions-American Samoa Community College,
College of Micronesia, Northern Marianas College, University of Guam
and University of Hawaii--to collaborate and cooperate to enhance their
impact on agriculture and communities. ADAP is a mechanism to address
common regional client-based issues while maintaining cultural, rural,
economic and environmental integrity. When American Samoa assumes the
Chair of ADAP in 1997, it will be the first time in the program's ten-
year history that ADAP will be lead by an institution other than
Hawaii. Detailed preparations are underway for a formal review by
CSREES in July 1997. The five institutions have nearly completed the
required review document and have formed three categories for future
priorities: sustainable systems, collaboration/partnerships, and
communication systems. ADAP Deans/Directors will use this review as
input to formulating a new strategic plan articulated by and for the
American Pacific. The principal researcher believes the five
participating institutions are geographically dispersed yet facing many
similar issues which can best be served through extensive networking
and communication. ADAP facilitates communications and seeks to raise
levels of academic achievement and improve the quality of education. In
addition to a capacity building degree studies program for bachelors,
masters and doctoral students, ADAP in 1996 opened a new area in
faculty/staff development to improve institutional capability and
credibility. For 1997, each ADAP institution will self-determine their
best means for electronic communications and an independent assessment
of overall electronic communication needs will be conducted. In view of
significant needs for research in high priority national interest
topics such as improved pest management systems, funds are not proposed
to continue this grant. At the discretion of the state, Hatch Act or
other funds could be used to support this research.
ADAP's original goals are embodied in the 1992 strategic plan,
namely to develop human resources within the institutions, to more
effectively manage agricultural programs within and among the
institutions, and to focus resources available on ADAP mission needs.
Priority projects for 1997 include: animal health survey, livestock
waste management, dietary guidelines for Pacific foods, artificial
insemination demonstration/education, youth-at-risk assessment, and
market information collaboration with ``state'' Departments of
Agriculture.
This work has been underway for seven years with an annual
appropriation of $650,000 to the former Extension Service. In fiscal
year 1994, an appropriation of $608,000 was made to CSREES to continue
the ADAP program. The fiscal year 1995 appropriation was $544,000, and
fiscal year 1996 and 1997 were $564,000 each year. The appropriation
total to CSREES is $2,210,000. Non-federal funds are not provided.
Unspecified in-kind support, such as facilities, equipment and
administrative support, are provided by each institution and, in some
specific projects, by non-ADAP collaborating institutions.
This work is being carried out by American Samoa Community College,
College of Micronesia, Northern Marianas College, University of Guam,
and the University of Hawaii. The ADAP program has been gradually
achieving original program objectives, particularly in the areas of
improvement in institutional capacity and communications. The 1997
formal review by CSREES will evaluate achievement of the objectives of
the 1992 strategic plan. It is anticipated that an additional 5 to 10
years will be needed to fully achieve collaborative integration of the
American Pacific land grant programs. In keeping with the
Administration's policy to award grants competitively, no further
federal funding for this grant is requested. Research could be
continued at the state's or territory's discretion using formula or
other funds.
The ADAP program was last evaluated by a review team in 1992 which
prepared a 5 year strategic plan. That strategic plan has guided the
ADAP mission and activities, including the call for the forthcoming
formal program review.
alternative fuels characterization laboratory
The principal researchers believe these research and information
dissemination activities have advanced the utilization of ethanol-based
and other alternative fuels. They believe they have resolved issues
affecting the use of ethanol in conventional and reformulated
gasolines. The research addressed evaporative emissions from fuels,
performance of vapor control sorbents, the environmental effects of
ethanol fuels, and developing an ethanol-based fuel for piston engine
aircraft. Dissemination involved promoting ethanol fuels in the Red
River Valley. The researchers believe the need is to ensure the
availability of unbiased scientific data to ensure that renewable fuels
are represented accurately in the marketplace. The project is
developing partnerships with public and private sectors in advancing
cleaner burning fuels technology. Fuels from renewable resources will
reduce U.S. dependence on overseas petroleum, while providing cash
crops for farmers. Renewable fuels are essential to energy and economic
sustainability, benefiting people, communities, and the Nation. In view
of significant needs for research in high priority, national interest
topics such as improved pest management systems, funds are not proposed
to continue this grant. At the discretion of the State, other funding
could be used to support this research. One goal is to compare
alternative fuels to conventional fuels, and promote alternative fuels
through the international Red River Valley Clean Cities Coalition.
Another goal is to provide consumers with information regarding the
efficiencies of the broad range of fuels, and provide information on
conversion of agricultural materials and other biomass materials to
alternative fuels. The program was instrumental in building North
Dakota's first public ethanol fueling site and in solving cold-start
problems.
The work supported in part by this grant began in fiscal year 1991.
The appropriations for fiscal years 1991 through 1993 were $250,000 per
year, $235,000 in fiscal year 1994, $204,000 in fiscal year 1995, and
$218,000 in fiscal year 1996 and 1997. A total of $1,625,000 has been
appropriated.
Over the duration of the grant, about $845,000 in non-federal
funding has been allocated toward performance of grant objectives. For
fiscal year 1996, non-federal funding was $105,000. In fiscal year
1995, it was $50,000. In fiscal year 1994, it was $60,000. In fiscal
years 1991 to 1993, non-federal funding was $630,000, which included
$600,000 from the Illinois State Geological Survey to evaluate an
ethanol-based process for coal desulfurization.
The University of North Dakota, Grand Forks, is the site of the
Energy and Environmental Research Center, a major research laboratory
employing over 250 scientists and technicians. The anticipated
completion date for the original objectives of the project was April
30, 1992. This research has been completed, and its results have been
published. In 1995, the scope and collaborative abilities of this
program were expanded to include the Red River Valley Clean Cities
program and collaborative efforts with industry and economic
development partners. Most of the research and dissemination activities
now underway could be completed by 2001. Keeping with the
Administration's policy of awarding research grants competitively, no
further Federal funding is requested for this project.
The last agency on-site evaluation was conducted in July 1996 by
the U.S. Department of Agriculture. The program was given a very
favorable review based on its ability to forge partnerships with both
regional and national public and private organizations committed to
commercial development of alternative fuels, its ability to disseminate
research results to an international technical audience, and its
ability to provide up-to-date research and unbiased information in
response to scientific needs, regulatory demands, and public requests.
center for agriculture and rural development
The research provides current economic information on international
trade in agriculture and analyses of the implications of trade policy
alternatives on the agricultural sector of the United States and other
countries. According to the proposal, trade negotiations and agreements
are of national concern to policymakers, farmers, and agribusiness
industries because of the implications for maintaining or opening
markets and establishing terms of trade and prices. Typical agreements
are extremely complex, requiring analysis by specialists to determine
outcomes and to provide objective and accurate information to those
impacted by such agreements. However, in view of significant needs for
research in other high priority national interest topics such as
improved pest management systems, funds are not proposed to continue
this grant. At the discretion of the State, Hatch Act or other formula
funding could be used to support this research.
The original goal was to assess and evaluate various proposals
affecting agricultural trade to provide analytical support to the
Office of the U.S. Trade Representative, and to provide information to
farmers and agribusiness firms on the competitive implications of such
agreements. An extensive number of theoretical studies and empirical
and descriptive analyses of policy issues and technical problems
pertaining to the Uruguay Round of negotiations were used by
negotiators and the agribusiness community. Studies included the
development of international trade models and assessments of trade
options for meat, dairy, feed and cereal grains, oilseeds, and other
commodities; impacts of the agreement upon selected countries; and
reforms needed for compliance. Analyses included determination of the
value and implications of export subsidies, import protection, and
internal support mechanism and levels. Knowledge developed in this
phase is now being used to monitor the effects of Uruguay Round
implementation and the differential impacts for developed, developing
and transitional economies. This grant supports six projects focusing
on General Agreement on Tariffs and Trade for Eastern Europe, Baltic
and the Newly Independent States; development of a model to assess the
North American Free Trade Agreement and its linkages with the General
Agreement on Tariffs and Trade; trade implications of U.S. food and
development aid in developing countries; integration of China into
world agricultural markets; and special projects as requested for the
U.S. Trade Representative's office.
This research program was initiated in fiscal year 1989. Grants
have been awarded from funds appropriated as follows: fiscal year 1989,
$750,000; fiscal years 1990 and 1991, $741,000 per year; fiscal years
1992-1993, $750,000 per year; fiscal year 1994, $705,000; fiscal year
1995, $612,000; fiscal year 1996, $655,000 and fiscal year 1997,
$355,000. A total of $6,059,000 has been appropriated.
The non-federal funds and sources provided for this grant are as
follows: $111,210 State appropriations and $175,616 miscellaneous for a
total of $286,826 in fiscal year 1991; $113,779 State appropriations
and $173,117 miscellaneous for a total of $286,896 in fiscal year 1992;
$120,138 State appropriations and $164,707 miscellaneous for a total of
$284,845 in fiscal year 1993; $161,673 State appropriations and $32,000
miscellaneous for a total of $193,673 in fiscal year 1994; $161,000
State and $30,000 miscellaneous for a total of $191,000 in fiscal year
1995; $70,000 State appropriations and $44,000 miscellaneous for a
total of $114,000 in fiscal year 1996. Fiscal year 1997 preliminary
information indicates $60,325 in State appropriations and information
is not yet available on miscellaneous funds.
The research program is carried out by the Center for Agriculture
and Rural Development at Iowa State University. The university
researchers anticipate that the work should be completed in 1998 with
analyses of the final agreement of the Uruguay Round and related trade
agreements and dissemination of these results. Work covered by the most
recent agreement would be completed by the end of 1998. However, in
keeping with the Administration's policy of awarding research grants
competitively, no further Federal funding is requested for this grant.
Evaluation of this project occurred as a part of the 1997 project
review and approval process. We found that this project was useful in
estimating impacts of the Uruguay Round provisions on world trade in
important U.S. agricultural commodities.
center for north american studies, texas
The purpose of this grant is to develop linkages with educational
and other institutions in Mexico and Canada to share data and faculty,
conduct research identifying trade opportunities and marketing
problems, conduct policy analysis, and develop a broad range of
training programs preparing agricultural/agribusiness firms for
international marketing opportunities. The program director believes
that citizens of the United States, Mexico and Canada have some similar
concerns about the impact of the North American Free Trade Agreement
(NAFTA), and that new, innovative approaches involving international
cooperation are needed to assess and evaluate these issues. Research
and training are needed to provide information to evaluate alternatives
for expanding U.S. exports and resolving potential social, economic,
and environmental conflicts. In view of significant needs for research
in high priority national interest topics such as improved pest
management systems, funds are not proposed to continue this grant. At
the discretion of the state, Hatch Act or other funding could be used
to support this research
The goal is to promote strong agricultural ties among the three
North American countries, ensure the continued competitiveness of U.S.
agriculture, and foster greater cooperation among the three countries
in resolving critical agricultural issues of common interest. As a
result of this project, cooperative study, research, policy analysis,
and training programs have been developed and presented to U.S.
producers and agribusiness managers, reaching over 2,600 people
regarding trade opportunities in Mexico, impacts of expanded trade on
selected agricultural sectors, and the procedures of international
marketing. The Center recently co-sponsored the Tri-National Research
Symposium, ``NAFTA and Agriculture: Is the Experiment Working?'' in San
Antonio with 215 participants, of which 100 were from Mexico. The
proceedings are available electronically through the Symposium Web page
on the Internet. Research comparing the competitiveness of major
agricultural production sectors is focused on Mexico's dairy,
livestock, meat, feed grain, and fresh vegetable industries.
Information databases on North American agriculture are being built to
support the Center programs and are accessible on the Web. The
electronic database on NAFTA and agriculture currently contains over
2,400 articles from major U.S., Canadian, and Mexican publications. A
study of trans-boundary trade and environmental linkages found that
existing institutions in both countries do not adequately address
environmental losses or gains.
Work supported by this grant began in fiscal year 1994 with an
appropriation of $94,000; $81,000 in fiscal year 1995; and $87,000 in
fiscal years 1996 and 1997. A total of $349,000 has been appropriated.
The non-federal funds and sources provided for this grant are as
follows: $39,000 State appropriations in fiscal year 1994 and $54,000
in fiscal years 1995. The annual State contributions for fiscal years
1996 and 1997 exceed $60,000.
The program is being carried out at Texas A&M University through
the Texas Agricultural Experiment Station in collaboration with the
Louisiana State University Agricultural Center, and other universities
and agencies of the Texas A&M University System. The original proposal
in 1994 was for a period of 12 months. The current phase of the program
will be completed in the year 2000. In keeping with the
Administration's policy of awarding research grants competitively, no
further Federal funding is requested for this grant.
CSREES performed a merit review of the project in August 1996 as it
evaluated the project proposal for 1996 and concluded that progress on
the four objectives was made and that a satisfactory plan of work had
been planned for the next funding period. Linkages were made with
counterparts at Mexican institutions and cooperative research projects
are being planned. Similar linkages will be made with counterparts in
Canada.
data information system questions
Cooperative State Research, Education, and Extension Service
(CSREES) is in the process of funding a cooperative agreement with the
University of Arkansas to provide national leadership in coordinating
the efforts of our university partners in helping us determine
appropriate content for a Research, Education, and Economics
Information System (REEIS)-wide information system. In addition, the
University of Arkansas will provide essential services in managing and
coordinating a national Steering Committee responsible for overseeing
the overall design, development, testing, and implementation of REEIS.
Similarly, funds have been allocated to employ a technical services
manager and a program analyst to oversee contracting with outside
sources to design and launch REEIS and to comply with the necessary
clearances and regulations applicable to information technology
systems. In addition, funds have been allocated to secure a temporary
director through the Intergovernmental Personnel Act (IPA) to
coordinate and guide the overall aspects of development, testing, and
implementing REEIS. Remaining funds are being allocated for contracting
with a private sector firm to conduct a strategic audit of available
data and a national needs assessment.
USDA's Research, Education, and Economics (REE) mission agencies
and their university partners lack a central, integrated, user-friendly
electronic information system capable of providing a knowledge base of
the thousands of programs and projects for which they are responsible
that focus on food, agriculture, natural resources, and rural
development. Such an information system is increasingly needed to
enable the Department and its partners to readily conduct both
comprehensive baseline and ongoing assessments as well as evaluations
of research, education, extension, and economics programs and projects.
In recent years, this need has become more urgent for several reasons.
First, the United States needs a visionary public funded research and
development program to produce essential knowledge and innovations for
meeting growing competition in a global market--which is largely
attributable to the expanding research and development efforts of
foreign nations. Second, a comprehensive information system is needed
to serve as a primary reference source for development of new research
and education projects on such diverse issues as increasing
productivity in agriculture and processing, improving the safety and
quality of food, and enhancing the sustainability of the environment
and rural communities. Third, Federal/State policy makers and
administrators are requiring empirical analyses to account for
historical, current, and future use of public funds and to provide a
basis for redirecting funds to higher priority problems. Fourth, the
Government Performance and Results Act (GPRA) has imposed reporting
demands on program outcomes which current, decentralized information
systems are not prepared to adequately satisfy.
The original goal of this initiative was to develop an information
system that can provide real-time tracking of research, extension and
education projects and programs; has the capability to communicate
vertically between field, state and Federal locations; will enable the
REE agencies and their partners to conduct rapid and comprehensive
policy assessments and program evaluation analyses; facilitates
assessment of technologies and practices employed in extension,
education, economics and research activities at the field and/or
regional levels; provides clear and transparent public access to
relevant parts of the information; and provides information management
tools to enhance the timeliness and accuracy of REE-wide responses to
inquiries about program objectives and expenditures.
Congress first appropriated $.4 million for REEIS in fiscal year
1997 to begin planning its design and development. We are in the
process of establishing a National Steering Committee to provide advice
and guidance throughout the development and implementation process. The
Steering Committee will be chaired by a notable administrator of
extension and research at a key land-grant university. It will be
comprised of both users and producers of Research, Education, Economics
agencies' data, including program officials and program leaders,
information system managers from other Federal agencies,
representatives from Federal oversight agencies, program/project
leaders representing partner institutions, and private sector users of
REE data. Ultimately, this body will be responsible for recommending
work specifications and for assessing the quality of work performed by
an experienced and successful private contractor specializing in
public-sector information systems.
Leadership responsibility for REEIS resides within the Cooperative
State Research, Education, and Extension Service's Science and
Education Resources Development division. This provides for effective
integration of the Current Research Information System, the Food and
Agricultural Education Information System, and appropriate extension
data bases. CSREES is working closely with all REE agencies and with
the university system via a cooperative agreement with the University
of Arkansas. We hope also to use the Intergovernmental Personnel Act to
secure an IPA from another university to carry out REEIS essential
management responsibilities. In addition, a process is underway to
engage a private sector firm specializing in public-sector information
systems to design, develop, test, and implement REEIS.
It is anticipated that REEIS can be operational by the year 2000.
The current appropriation of $400,000 will cover start-up costs such as
establishment of a National Steering Committee, preparation and
specifications for contracting with an outside firm, selection of a
contractor, a needs assessment, identification of functional
requirements, a draft plan for designing and developing the system
including recommendations for in-house hardware, operating system, and
software programs. The $600,000 increase request for fiscal year 1998
will allow for implementing, testing, and refining a prototype,
including preparation of an operations manual and a full-scale
implementation and maintenance plan. The Research, Education, and
Economics Information System meets a high priority national need for a
continuing national information system. REEIS is being designed to meet
the data information needs of all REE agencies and their university and
private sector cooperators. It will link data systems on research,
education, extension, and economics. Therefore, annual maintenance
costs will be ongoing.
An evaluation of Research, Education, and Economics Information
System is not appropriate at this early stage of development.
geographic information system
The program is designed to transfer evolving geographic information
systems technologies to state and local governments. This technology--
and in particular--the related technologies including Internet access
for information, data bases, and telecommunication for cooperative
system development are sufficiently complicated that most of the people
familiar enough with them to serve as effective transfer agents are
researchers. The current program is being carried out by a non-profit
corporation, The National Center for Resource Innovations whose
directors and participants are the sub-contractors who are carrying out
the program. These sub-contractors range over a wide spectrum of sizes
and special areas of site based expertise involving different
Departments in four academic institutions, one regional development
authority and one non-profit corporation working on agro-environmental
problems in the Chesapeake Bay. A new site at the University of New
Mexico has been added by the Board this year. This unique institutional
arrangement has helped fill a unique role in linking some of the
otherwise balkanized efforts of agencies and academic institutions and
now seven regions of the country.
The principal researcher believes few national programs have impact
without translation to the local environment, including either
regional, state, or local government level. Much progress has been made
in developing computer based information systems ranging from data on
transportation systems to the quantity of a resource. Given a
geographic dimension, these information systems provide an invaluable
vehicle for sharing information over the various levels of government
and even facilitate the integration of disparate data. The work of this
project is needed to transfer this technology to state and local
governments whose limited training budgets and sometimes isolated
location make it difficult to use the latest technology. The technology
developed in this program is useful in improving the management of our
natural resources. While concentrating on issues related to
agriculture, the independent, non-profit nature of the National Center
for Resource Innovations facilitates linkages across disciplinary and
institutional barriers, make it possible to use work at the state and
local levels which was initiated at the Federal level. While the early
phases of GIS concentrated on building information systems related to
rural physical and natural resources, the current challenge is to
integrate human economic, social and demographic information to better
understand the relationship of human communities to the landscape.
There is a need for this to better understand the technology consumer.
In addition, there is a need for integrated information about other
biological systems including insects, plants, and animals as we extend
our work to include whole farm management within an ecosystem-based
environment.
In this context, newer high capacity technologies are also
beginning to provide other dimensions--those of high level time related
phenomena, including weather-associated transport of biological
materials and their relationship to food producing systems. CSREES has
funded seminal research in integrated pest and animal management in the
1970's and 1980's. At the other end of the spatial scale, the role of
the public sector in geographic information system based precision
farming technologies, data capture, and information synthesis as the
subject of a current study group. In view of significant needs for
research in high priority national interest topics such as improved
pest management systems, funds are not proposed to continue this grant.
At the discretion of the State, Hatch Act or other funds could be used
to support this research.
The original goal of this work was to serve as a pilot project for
the transfer of geographic information systems technology to local
governments as related to natural resources. It has carried out this
function in a useful way. With impetus from this project and similar
efforts economic and biological data are being presented in maps
fashion useful to state and local governments and individuals. This
project has provided the impetus and linkages to facilitate planning
work done in South Georgia with some assistance given to local tax
assessment and parcel identification by a Department of Commerce
sponsored Economic Development Authority. The Chesapeake Bay project
has linked seven state conservation entities in an effort to develop
better watershed models and decision support systems. The Arkansas
portion of the project has focused on training to educate county
employees with regard to the technology of geographic information
systems and geographic positioning systems. The University of Wisconsin
has continued to simultaneously support the high technology end of the
evolution of new tools and seek new ways to implement change while
measuring the impact of such implementation. The work in North Dakota
has continued to focus on geographically referenced real time weather
information for payments and others. And, in the smallest of the
efforts under this program, the efforts at Central Washington have
provided training for a number of State personnel and others from
various levels and institutions on how to utilize geographic
information systems. It is anticipated that the fiscal year 1997 grant
will support work under this program through March 1998. The proposal
for this work in 1996 has been received and reviewed.
Grants have been awarded from funds appropriated as follows: fiscal
year 1990, $494,000; fiscal year 1991, $747,000; fiscal years 1992 and
1993, $1,000,000 per year; fiscal year 1994, $1,011,000; fiscal year
1995, $877,000; fiscal year 1996, $939,000; and fiscal year 1997,
$844,000. A total of $6,912,000 has been appropriated.
For fiscal year 1990 through fiscal year 1996, to date, the work in
this program had $4,553,252 in non-federal support. In fiscal year 1990
non-federal support was $714,940 consisting of equipment, data bases,
and other miscellaneous contributions from foundations, city, and state
governments. In fiscal year 1991 non-federal support was $25,000 from
county government. In fiscal year 1992 non-federal support was $366,016
from county government, computer companies, and state governments
consisting of equipment, software, facilities, and miscellaneous
support. In fiscal year 1993, non-Federal support was $713,900
consisting of financial and miscellaneous support from foundations,
county and state governments. In fiscal year 1994, the non-Federal
support was $713,643. In fiscal year 1995 the non-Federal support was
$987,000. In fiscal year 1996 it was $567,173. It is anticipated to be
$456,582 in fiscal year 1997.
The National Center for Resource Innovation Chesapeake Bay is
located in Rosslyn, Virginia. This group is working under a memorandum
of understanding with several states of the Chesapeake Bay watershed
project. The southeastern center, in Valdosta, Georgia, in affiliation
with the South Georgia Regional Development Center, has developed a
comprehensive plan for the City of Adel as a model for other urban
centers in their ten-county region. The southwestern center, in
Fayetteville, Arkansas serves local governments through its training
facilities at the University basing its technical approach on their
expertise and past experience with the federally developed system known
as GRASS. They have developed pilot projects for some local
jurisdictions and state level data bases which they have provided
online. Central Washington University focuses on training in ARC/INFO
for state planning and in three local governments and the Yakima Nation
in the Yakima watershed. The north central center in Grand Forks, North
Dakota, in affiliation with the University of North Dakota, focuses on
relating real time weather data to other spatial attributes. In
addition, this center has sought to implement ideas developed in other
centers in the distance learning concept. The University of Wisconsin-
Madison, functioning as the Great Lakes center, continues a long
history of involvement in the application of this technology at the
local level with strong focus on soils/land-use and the institutional
aspects of the integration of a new technology.
The original objectives are to build new institutional frameworks
for developing and disseminating geographic and related information to
local decisionmakers has been largely completed. Each site has
developed unique approaches to solving the greatest needs in their
region for applications of these modern technologies and many
innovative applications of these techniques have been implemented. New
technologies, including Internet based educational and information
exchange have created tremendous demand among National Center Resource
Innovations' customers to expand its program to include these new
technologies in order to bring their primarily rural users into new
eras of public education and information management. Last year, the
National Center Resource Innovation became a valued educator about the
public roles in and information needs for precision farming. The
Center's view is that information that can sustain individual farmer's
decisions can also be extended to the needs of the local public
agencies. Integrating temporal information, such as weather and
satellite imagery, is needed by everyone who needs to model future
effects of their decision upon land processes. The Center is moving
forward into these new territories to facilitate many of the newest
initiatives of federal agencies who must work together to build modern
systems for public policy. As resources continue to be used and
planning continues to be required, and as technology continues to
evolve, systems, knowledge and decisions must continue to get better.
It is reasonable to assume that while the need exists for the latter, a
definitive completion date for the Center's work may not exist. Keeping
with the Administration's policy of awarding research grants
competitively, no further Federal funding for this grant is requested.
No formal evaluation of this project has been developed by CSREES.
In addition, each Center site prepared a cost-effectiveness study. Each
site developed the study using the help of external users. The study
found that for each federal dollar expended on this program, $7.40 in
value was realized. The analysis will be repeated for fiscal year 1997.
However, in keeping with the administration's policy of awarding
research grants competitively, no further Federal funding for this
program as currently positioned is requested. Research could be
continued at the state's discretion using formula and other public and
private funding sources.
gulf coast shrimp aquaculture
Work under this program has addressed important research necessary
for the development of a U.S. marine shrimp farming industry. Studies
have been conducted on growout intensification, prevention and
detection of diseases, seed production, and the development of high
health and genetically improved stocks. Performance trials on selected
stocks in various production systems have been conducted. Seed
production systems have reached commercial feasibility. Protocols for
viral detection have been improved and have led to the development of
specific pathogen free stocks of commercial importance. A number of
important viral pathogens of marine shrimp have been identified.
Researchers have responded rapidly to viral infections that have
severely impacted the U.S. shrimp farming industry. Researchers will
intensify efforts aimed at preventing new introductions of exotic viral
pathogens. In fiscal year 1997, emphasis will be placed on the industry
seed supply, disease control, environmental quality, and production
systems. The principal researcher indicates that there is potential to
enhance domestic production of marine shrimp through aquaculture in
order to reduce the annual trade deficit in marine shrimp, which is
approximately $2 billion. Research could improve the supply of high
quality seed, improve shrimp health management, and enhance production
efficiency in shrimp culture systems. The U.S. has the opportunity to
become a major exporter of shrimp seed and broodstock, and disease
control technologies, products and services. Increased efforts are
needed to prevent the introduction and spread of a number of exotic
viral pathogens of shrimp. In view of significant needs for research in
high priority national interest topics such as improved pest management
systems, funds are not proposed to continue this grant. At the
discretion of the state, Hatch Act or other funding could be used to
support this research.
The original goal was to increase domestic production of marine
shrimp through aquaculture. Studies have been conducted on growout
intensification, prevention and detection of diseases, seed production,
and the development of specific pathogen free stocks. Commercially
viable shrimp seed production systems have been developed. Diagnostic
techniques for a number of important viral pathogens have been
developed. High health genetically improved stocks are being developed
and evaluated under commercial production conditions. Researchers have
responded to severe disease outbreaks caused by the introduction of
exotic viral pathogens into U.S. shrimp farms. In addition, scientists
are currently developing biosecurity protocols to prevent additional
introductions of viral disease agents.
Grants have been awarded from funds appropriated as follows: fiscal
year 1985, $1,050,000; fiscal year 1986, $1,236,000; fiscal year 1987,
$2,026,000; fiscal year 1988, $2,236,000; fiscal year 1989, $2,736,000;
fiscal year 1990, $3,195,000; fiscal year 1991, $3,365,000; fiscal
years 1992-1993, $3,500,000 per year; fiscal year 1994, $3,290,000;
fiscal year 1995, $2,852,000; fiscal year 1996, $3,054,000; and fiscal
year 1997, $3,354,000. A total of $35,394,000 has been appropriated.
The U.S. Marine Shrimp Farming Consortium estimates that non-
federal funding for this program approaches 50 percent of the Federal
funding for fiscal years 1991-1996. The source of non-federal funding
is primarily from state and miscellaneous sources. In-kind
contributions from the industry were not included in this estimate, but
are substantial as the program is dependent upon industry cooperation
to carry out large scale commercial trials.
The work is being carried out through grants awarded to the Oceanic
Institute, Hawaii and the Gulf Coast Research Laboratory in
Mississippi. In addition, research is conducted through subcontracts at
the University of Southern Mississippi, Tufts University, the Waddell
Mariculture Center in South Carolina, the Texas Agricultural Experiment
Station, and the University of Arizona. The anticipated completion date
for the original specific research objectives was 1987. The original
specific objectives have been met, however broader research goals have
not been met. Researchers anticipate that the specific research
outlined in the current proposal will be completed in fiscal year 1998.
Keeping with the Administration's policy of awarding research grants
competitively, no further funding for this grant is requested.
The agency evaluates the progress of this program on an annual
basis. The institutions involved in this program submit a detailed
accomplishment report each year prior to the submission of the new
grant proposal. In addition, the agency conducts an in-depth on site
review of the program every three years. The 1997 review of the program
indicates that the process during the last twelve months has been well
documented; close linkage between the research and the U.S. shrimp
farming industry has greatly enhanced the commercialization of research
findings; and the proposed research represents a logical progression of
previous work conducted under the program.
mississippi valley state university
Funds were used to strengthen academic programs, including
accreditation and reaccreditation. Of the ten programs eligible for
accreditation, nine have been accredited. Assessment of the criteria
has begun for the remaining eligible program. Academic programs have
been broadened to include more agriculture-related courses consistent
with the needs of students from the Mississippi Delta, students from
other parts of the State, as well as out-of-state students. Curriculum
additions have had a positive impact on student enrollment. Courses
continue to be modified to reflect the needs of graduates as well as
employers in the Mississippi Delta, with particular emphasis on those
areas that employers have the greatest need. The funds continue to
provide enhancements related to other program and administrative
support areas that positively impact program delivery and
administration at Mississippi Valley State University. The primary need
for this project is to satisfy a local need. The need is for
strengthening university capacity and curriculum development at
Mississippi Valley State University. Degree programs in Accounting,
Mass Communications, Music and Public Administration have been added
since the 1988 plan was developed. The Criminal Justice program has
been developed into a departmental unit with social work in order to
provide for improved administration and academic counseling. A master's
program in Criminal Justice is now offered. The baccalaureate major in
chemistry and the master's program in Elementary Education have been
reinstated. In view of significant needs for research in high priority
national interest topics such as improved pest management systems,
funds are not proposed to continue this Grant. At the discretion of the
state, Hatch Act or other funding could be used to support this
research.
The original goal was to provide funding to strengthen the academic
programs of the university. The academic programs have been
strengthened as evidenced by student recruitment, which has improved to
show a positive ratio between applications received and students
admitted. Approximately one half of the applicants are enrolled.
Increased quality of instruction and programs have benefited students.
This is reflected in the higher graduation rate, increased student
enrollment, enriched faculty and improved community relationship.
This program was initiated in fiscal year 1987. Grants have been
awarded from funds appropriated as follows: fiscal year 1987, $750,000;
fiscal years 1988 and 1989, $625,000 per year; fiscal year 1990,
$617,000; fiscal year 1991, $642,000; fiscal years 1992 and 1993,
$668,000 per year; fiscal year 1994, $93,000; fiscal year 1995,
$544,000; fiscal year 1996, $583,000; and fiscal year 1997 $583,000. A
total of $6,898,000 was appropriated.
Mississippi Valley State received State and private funding during
the period of this grant. The State figures provided here are for
enhancement funds provided in addition to the University's standard
formula generated funds. The sources and amounts are as listed:
SOURCE
----------------------------------------------------------------------------------------------------------------
Fiscal year State Private Total
----------------------------------------------------------------------------------------------------------------
1987............................................................ .............. $168,640 $168,640
1988............................................................ .............. 186,036 186,036
1989............................................................ $68,658 190,258 258,916
1990............................................................ 207,879 369,358 577,237
1991............................................................ 333,263 337,700 670,963
1992............................................................ 349,427 470,220 819,647
1993............................................................ 35,750 358,680 394,430
1994............................................................ 590,890 568,970 1,159,860
1995............................................................ 841,654 530,300 1,371,954
1996............................................................ 1,197,917 590,824 1,788,741
----------------------------------------------------------------------------------------------------------------
These funds are intended to strengthen programs at Mississippi
Valley State University. The program has been carried out on the campus
at Itta Bena and at off-campus sites in Anguilla and Greenville and the
Greenwood Center since the Spring Semester of 1996. The objectives of
the current grant will be completed by September 30, 1997. Keeping with
the Administration's policy of awarding research grants competitively,
no further Federal funding for this grant is requested.
The program has been evaluated on an annual basis by the agency.
The annual progress report for fiscal year 1996 revealed steady
progress in the academic programs. For example, the Social Work
Department had significant positive changes in the quantity and quality
of the faculty. The Business Department offered a component dealing
with Agricultural land lease in the business law classes and the other
classes had topics on input and output analysis, agricultural
stimulations and initial farm planning.
national education center for agricultural safety, iowa
CSREES has requested the college to submit a grant proposal that
has been received. The proposal is currently being reviewed. The
Northeast Iowa Community College is requesting funding for a national
center for agricultural safety education. The center will conduct a
safety training needs assessment of workers and employees involved in
production agriculture, plan, implement, and evaluate training on
safety and health issues derived from the needs assessment, and provide
hands-on training for farm accident rescue. The National Safety Council
estimated that 800 agricultural work deaths occurred in 1995. Of these
deaths 55 percent resulted from unintentional injuries suffered in farm
tractor overturns. Another 140,000 disabling injuries were recorded in
1995 in agricultural work incidents. Many of these injuries resulted
from farm machinery entanglements, working with livestock, and highway
collisions between farm machinery and vehicles. Emergency medical
services personnel are often exposed to the same hazards as the victims
they are attempting to rescue. Emergency medical services personnel
must be prepared to deal with these hazards under stressful
environmental conditions. In view of significant needs for research in
high priority national interest topics such as improved pest management
systems, funds are not proposed to continue this grant. At the
discretion of the state, Hatch Act or other funding could be used to
support this research. The goal of this research is to provide on-site,
hands-on training of emergency response personnel who may be called on
to respond to a wide range of agriculture related accidents and
emergencies. Participants in the short courses offered by the center
would than be prepared to pass on their knowledge to others when they
return to their communities. There are no accomplishments to date.
The work supported by this grant begins in fiscal year 1997 and the
appropriation for fiscal year 1997 is $300,000. The non-federal funds
and sources provided for this grant are as follows: $1,000,000 state
appropriations, and $65,802 miscellaneous in fiscal year 1997.
Research will be conducted at the Northeast Iowa Community College,
Peosta, Illinois. The anticipated completion date for the original
objectives is September 30, 1997. Keeping with the administration's
policy of awarding research grants competitively, no further Federal
funding for this grant is requested.
There has been no evaluation of this project yet as it is be newly
funded in 1997.
pm-10 study, california and washington
The research on PM-10 is being conducted by scientists at the
University of California, Davis and Washington State University. The
California program has focused on developing and refining methods to
accurately measure and detect the sources of PM-10 emissions from
various agricultural practices, and to investigate alternative
practices for reducing potential air pollution on susceptible
California crops and soils. In addition, the California project is also
measuring PM-2.5 and even more refined size distributions, as well as
identifying the constituents in all emissions samples in order to
better characterize the size distribution and possible sources of the
emissions. The Washington State University scientists are using refined
instruments on field sites to measure and predict the effects of wind
erosion and agricultural practices in the Columbia River Basin region
on PM-10 emissions, with the assistance of a portable wind tunnel.
Alternative cropping systems, tillage practices, rotations, and weed
control practices are being developed and compared for control of PM-10
emission pollution under Columbia River Basin conditions. The principal
researcher believes there has been growing national concern over the
potential health and safety aspects of air pollution from dusts and
suspended particulate matter, resulting in passage of the 1990 Clean
Air Act which requires the monitoring and control of such pollution.
Because of particular problems from PM-10 emission in the arid regions
of the Western United States, more accurate information is needed on
the role of agricultural operations in intensively cultivated soils in
California and the Columbia River Basin, as sources of PM-10 pollution,
in order to assist growers to develop alternative agricultural
management practices to control PM-10 emissions. In view of significant
needs for research in high priority national interest topics such as
improved pest management systems, funds are not proposed to continue
this grant. At the discretion of the state, Hatch Act or other funding
sources could be used to support this research.
The original goals of this research were to measure the PM-10
emission rates from significant crop and tillage practices, to
determine the source of PM-10 emissions on soils in agricultural
regions of southern California and the Columbia River Basin in the
Pacific Northwest, and to explore cost-effective alternative
agricultural practices to control these emissions. The third year of
field measurements are being completed on PM-10 emissions on production
practices on almonds, figs, walnuts, wheat, and from dairy far-farms
and feedlots in California, and on a number of agricultural practices
in the rainfed and dryland croplands in the Columbia River Basin.
Susceptible climatic and soil conditions and tillage and cropping
practices have been identified and are being used to develop prediction
tools to assist growers to adopt alternative practices to reduce
potential air pollution by PM-10 particulate emissions. Measurements
continue to be taken in these areas. In addition, preliminary efforts
are underway to collect ammonia samples. This is important because the
peaks in PM-10 emissions in California occur in December and January.
Plans have also been developed to study the impacts of land preparation
techniques on emissions.
The work supported by this grant began in March 1994. The
appropriation for fiscal year 1994 was $940,000; fiscal year 1995,
$815,000; and for fiscal years 1996 and 1997, $873,000 per year. A
total of $3,501,000 has been appropriated. The program is matched by
State funds in the form of salaries, benefits, and operating costs.
This work is being directed by participating scientists at the
University of California, Davis, and at the Washington State
University. The anticipated completion date of the original objectives
of this project is 2000. The first four objectives of the project on
soil particle characterization are nearing completion. The objectives
on field control will continue. Quarterly reports on the entire project
to date are available. Keeping with the Administration's policy of
awarding research grants competitively, no further Federal funding for
this grant is requested.
The agency's Program Manager annually reviews the research progress
reports and proposed new research, and attends the annual meetings of
the program to assess progress. The program is also evaluated each year
by technical, administrative, and agency personnel. Progress is
reported at research review meetings three times a year. Printed
reports are available from each, meeting. Grower and public advisory
committees are consulted for input on research progress and objectives.
rural partnerships, nebraska
The Rural Partnership Project is a comprehensive effort to
transform the way that Federal, State, and local institutions deliver
education and services to rural constituents. It is designed to address
the issues of mandates; community strategic planning and project
implementation, impact of devolution on local governments; profiling of
rural constituents as to challenges, gaps in services, and
opportunities; impact modeling; and sustaining development
organizations. The principal researchers believe delivery and
evaluation of programming delivered by Federal agencies is undergoing
significant transitions. Research needs to direct the most effective
and efficient means of program delivery and impact. This project is
designed to provide insights and experience in alternative delivery
formats in conjunction with partners at local, state, regional, and
federal levels. In view of significant needs for research in high
priority national interest topics, such as improved pest management
programs, funds are not proposed to continue this grant. At the
discretion of the State, Hatch Act or other funding could be used to
support this research. The original goal of this research was to
provide guidance in the delivery of information, technical assistance,
and strategy related to rural economic development. Nebraska has
transformed many of its education and service delivery formats based on
this applied research activity. This project received Vice-President
Gore's ``Hammer Award'' in December 1996.
The work supported by this grant began in fiscal year 1996 and the
appropriation for fiscal year 1996 and fiscal year 1997 was $250,000. A
total of $500,000 has been appropriated. Non-Federal funds were limited
to staff and researcher support.
Research is being conducted at the University of Nebraska. This is
an on-going research activity. The project which was begun in 1996 is
now demonstrating early impacts of restructured delivery and
implementation approaches for programs. The existing project is
scheduled for completion September 30, 1998. However, in keeping with
the Administration's policy of awarding research grants competitively,
no further Federal funding is requested for this grant.
The agency evaluates merit of research proposals as submitted. No
formal evaluation of this project has been conducted.
water quality--illinois
The Illinois Groundwater Consortium grew out of a fiscal year 1990
appropriation of $500,000 to Southern Illinois University at Carbondale
to focus on the short-and long-term effects of agricultural chemical
contamination on the environment, the ground water, and ultimately,
human health and welfare. As a result of this appropriation, the
University joined forces with the Illinois State Geological Survey,
Illinois State Water Survey, University of Illinois Cooperative
Extension Service, and the University of Illinois Agricultural
Experiment Station to create the Illinois Groundwater Consortium. The
Consortium's primary mission, then and now, is to effectively work
toward providing a scientifically-valid basis upon which meaningful
agricultural chemical management and regulatory decisions can be based.
The Consortium has worked to address the concerns of the agricultural
and agrichemical industries as well as the valid concerns of the
agencies charged with protection of environmental quality. Examples of
topics currently under study include:
1. Flood-Induced Loading of Agricultural Chemicals to Public Water
Supply Wells in Selected Reaches of the Illinois River
2. Development of a Conceptual Framework for Sustainable Ecosystem-
Based Management of Floodplains Along the Mississippi River
3. The Impact of Flooding on the Water Quality of an Alluvial
Aquifer at Henry, Illinois: First-Year Progress
4. Conservation Compliance and Agricultural Producers in the Corn
Belt: Implications for Strategic Planning and Policy Implementation
5. Transport and Fate of Agrichemicals in an Alluvial Aquifer
During Normal and Flood Conditions: A Preliminary Study
6. Nitrogen Dynamics of Agricultural Watersheds in Central Illinois
7. Assessing the Reliability and Stability of Policies to Reduce
Agricultural Chemicals in Public Water Supplies.
The principal researcher believes that, as the Consortium enters
its seventh year, the fiscal year 1997 appropriation is targeted to
research pertaining to the impacts, recovery, and remediation of the
Midwestern region after flooding. The 1993 and 1995 flooding of the
Mississippi, Missouri, and Illinois Rivers, and their tributaries,
created devastating effects on the farm lands, communities, and natural
resources of the area. These effects have major implications for
agricultural practices, water quality, and public policy decisions.
This natural catastrophe has resulted in a need for further studies
examining the impact of the flooding on surface/ground water, soils and
their rehabilitation, biodiversity, and on economic and public policy
in the region. In addition, there is the need to disseminate results to
the public to enable the Consortium findings to be beneficial in the
near term to those needing the information. To facilitate this work,
the Consortium expanded its participant institutions in 1995 to include
Southern Illinois University at Edwardsville. Southern Illinois
University at Edwardsville's strategic location in the heart of the
flood damage area, as well as its qualified research scientists who
work in the Consortium's high priority research areas, will strengthen
the capabilities of the Consortium. The highest priorities of the
Consortium is the funding of research upon which public policymakers
working on land use or ground water protection issues in flood plain
areas can base decisions, and the broad dissemination of this
information. In view of significant needs for research in high priority
national interest topics such as pest management systems, funds are not
proposed to continue this grant. At the discretion of the state, Hatch
Act or other funding could be used to support this research
The Illinois Groundwater Consortium was established to coordinate
and support research on agricultural chemicals in Illinois ground
waters. The research team has accomplished an improved understanding of
the fate and movement of agricultural chemicals under Illinois crop
production conditions. A publication supported by the Consortium
entitled, ``Buried Treasure: 50 Ways Farmers Can Protect Their
Groundwater,'' has received widespread acceptance and use for lay
audiences. The Illinois Groundwater Consortium has accomplished a major
step toward coordination and exchange of information-nation/research
results relating to ground waters in Illinois. The Groundwater Bulletin
reports research results from the Consortium. The Bulletin reports on
atrazine studies, nitrogen management, farming practices for more
efficient chemical use, geological impacts and policy options to
safeguard ground waters. The Consortium investigators took an active
role in monitoring and investigating herbicide, pesticide and coliform
impacts during and after the Mississippi River Flood of 1993. The
research continues today on the long-term impacts of flooding and
management of the affected areas. The findings from this study will be
useful in restoring the flooded cropland to full productivity and in
establishing a base upon which policy management decisions can be made.
The Consortium annually publishes a proceedings of its annual
conference. The 1996 Proceedings of the Sixth Annual Conference
contains 320 pages of research results. The Consortium represents an
exceptionally productive cooperative effort involving several
universities and agencies.
Research grants have been awarded from funds appropriated as
follows: fiscal year 1990, $494,000; fiscal year 1991, $600,000; and
fiscal years 1992-1993, $750,000 per year; fiscal year 1994, $666,000;
fiscal year 1995, $460,000; and fiscal years 1996 and 1997, $492,000
per year. A total of $4,704,000 has been appropriated.
The non-federal funds and sources provided for this grant were as
follows: $255,891 state appropriations in 1991; $447,237 state
appropriations in 1992; $644,054 state appropriations in 1993; and
$623,124 state appropriations in 1994. Non-federal and state funds for
1995 and 1996 have exceeded the federal funds.
The work is being carried out by the Illinois Groundwater
Consortium and coordinated by the, Carbondale campus of Southern
Illinois University. The research is being conducted by staff at the
University of Illinois, Southern Illinois University, the Illinois
State Geological Survey and the Illinois Water Survey at locations
across the State.
This project was planned as a five-year study of the impacts and
recovery of flooding in the Midwest. The original proposal and
subsequent proposals identified both short-term objectives which are
project goals that could be accomplished within one to two years and
long-term objectives which are project goals that could be accomplished
within two to five years. In calendar year 1996, two years of studies
involving 26 projects were completed, and in calendar year 1997, eight
new projects will begin. These projects are spread across areas
identified as high priority, including studies of flood impacts on soil
productivity and remediation, movement of chemicals in water and soils,
bacteria and microbial life, plants and aquatic life, and on public
policy impact. Progress in meeting short-term and long-term objectives
has been excellent. The most complex task is coordinating research
projects on flood issues involving multiple issues, such as biological,
social, economic and political issues, where effective solutions await
the expansion of research databases. It is anticipated that the
projects will be completed in the year 2000. Keeping with the
Administration's policy of awarding research grants competitively, no
further Federal funding for this grant is requested.
From its beginning, the projects funded through the Illinois
Groundwater Consortium involve reviews by at least three faculty/
researchers drawn from 27 different universities, state and federal
labs and surveys, USDA research laboratories, and other research
centers. This review system enables the IGC Advisory Committee to
select projects with scientific merit from the group of proposals
submitted for funding consideration. The titles, principal
investigators names and affiliations, and budgets are submitted to USDA
for review along with the IGC proposals for funding.
water quality--north dakota
The overall objective of the research is to develop an
understanding of the occurrence, transport and fate of agricultural
chemicals found in representative field settings in the Northern Great
Plains region of the United States. The ultimate goal is to provide a
scientifically valid basis for management and regulation of these
chemicals. This past year, the scope of the program was expanded to
include water management issues in the Red River of the North drainage
basin. The Red River Water Management Consortium, a partnership between
public and private sectors, was established to address critical water
quality and quantity issues in an area where agriculture is the
predominant industry. A major objective of the Consortium program is to
utilize results from the initial phases of this research program to
find economical, practical, and timely technological solutions to water
supply and water quality problems. By providing cofunding for the
program, Red River Water Management Consortium members become active
stakeholders in the research. This partnership ensures the practicality
of the research performed and provides a model for the wise stewardship
of water resources in other drainage basins in the United States. The
principal researcher believes that the nation needs a scientifically
valid basis upon which meaningful agricultural chemical management and
regulatory decisions can be made. Chemicals in ground water present
both a public health problem and an environmental quality problem of
significant short-term and long-term importance on a local, regional
and national scale. In addition, the principal researcher has
established a water management consortium consisting of industry,
municipalities, and other entities in partnership with state and
Federal governments as a mechanism for transferring the results of this
research program to the public. However, in view of the significant
need for research in high priority national interest topics, such as
improved pest management systems, funds are not proposed to continue
this grant. At the discretion of the state, other funding could be used
to support this research.
The original goal of the research program was to understand the
occurrence, transport, and fate of agricultural chemicals in
representative field settings in the northern Great Plains region so
that scientifically valid decisions could be made for their management
and regulation. Work on five of the seven sites originally instrumented
under this program has been completed. Research at the two remaining
sites is directed toward answering questions that have arisen during
the course of this research program, specifically to determine the
long-term trends in nitrate concentrations in a surficial aquifer under
irrigated agriculture and to determine the source and trends for
sulfate in a similar setting. Results from this program have been
reported in journals, conference proceedings, and through presentations
at national, state, and local meetings. To date, more than 40
presentations or publications have been made. In addition, two doctoral
dissertations and one master's thesis have resulted from this program.
Examples of important results obtained from this research include the
following:
1. An understanding of agricultural chemical occurrence in ground
water as determined by physical, chemical, and biological processes,
transport mechanisms, management practices, and climatic factors.
2. Nitrate contamination of ground water in the northern Great
Plains region of the United States is of even greater concern than
pesticide contamination.
3. Biological denitrification is an extremely important process
that determines the occurrence and distribution of nitrate and sulfate
in aquifers in the northern Great Plains region.
4. Preferential flow mechanisms control the movement of water and
contaminants in glaciated settings. Widely used flow models that do not
account for preferential flow can severely underestimate the travel
time and depth of contaminants.
5. Transport of pesticides on airborne particulate matter may
present a major health threat and is an extremely important and poorly
understood mechanism for the movement of pesticides to ground water
recharge areas.
Finally, the researchers have established the Red River Water
Management Consortium as a mechanism for transferring the results of
the initial research to vested stakeholders in the region and to the
general public in order to address water quantity and quality problems
resulting from agricultural practices and agricultural development.
Sustainable agricultural development throughout the United States must
rely on a far better understanding of our water resources and the
application of new water management technologies to address changes in
the agricultural industry.
In 1989, $1.0 million was appropriated under the ground water
research program. Beginning in 1990, funds have been earmarked under
the Direct Federal Administration program. Work supported by this grant
was initiated in fiscal year 1990 with an appropriation of $987,000.
Subsequent appropriations have been $750,000 in fiscal year 1991,
$500,000 per year in fiscal years 1992-1993; $470,000 in 1994; $407,000
in fiscal year 1995; and $436,000 in fiscal years 1996 and 1997. A
total of $5,486,000 has been appropriated for this water quality
research program.
Red River Water Management Consortium members provide cofunding to
support their participation in the program. Cofunding provided by Red
River Water Management Consortium members for fiscal year 1996 totaled
$59,700. Interest in this program is growing, and it is anticipated
that at least $80,000 in cost-share will be obtained during the 1997
fiscal year through membership fees. These funds are provided directly
to the program and do not include in-kind costs incurred by the
participants. In-kind costs incurred by the participants are estimated
to be several hundred thousand dollars, although this estimate cannot
be verified at this time. Field activities to determine the long-term
trends of nitrate and sulfate and to determine the source of sulfate
are being conducted in cooperation with the North Dakota State Water
Commission. Water samples collected at the Elk Valley field site are
being analyzed at the North Dakota State Water Commission laboratory.
For this 3-year effort, 1996-1998, they have estimated a cash-
equivalent funding in the amount of $33,660. In addition, the North
Dakota State Water Commission will conduct field sampling for the
Energy and Environmental Research Center in the summer of 1997 to
investigate the source of sulfate found in ground water in the Elk
Valley aquifer. They have estimated the cash equivalent cost of these
services to be approximately $12,000.
Research is being conducted at the University of North Dakota
through its Energy and Environmental Research Center and at field sites
in North Dakota and Montana. In addition, a portion of the pesticide
research was conducted at North Dakota State University. Cooperative
efforts have resulted in work also being performed at cooperative
institution locations such as, University of Waterloo, Victoria
University, University of Montana, the Red River Resource Conservation
and Development Council offices, and the North Dakota State Water
Commission. The anticipated completion date for the original objectives
of the project, specifically the field related research, was fall 1995.
This research has been completed and the sites have been
decommissioned, with the exception of those relating to long-term
nitrate and sulfate monitoring and analysis. Work on nitrate and
sulfate trends and occurrence such as activities resulting from initial
findings of this research program, is scheduled for completion in 1999.
The Red River Water Management Consortium was established in 1996 as a
mechanism for transferring the information derived from this research
program to the technical community and to the public for use in
addressing water quality and quantity issues relating to agriculture
and agricultural development. It is anticipated that Red River Water
Management Consortium activities will continue for several years in
order to meet the objectives as defined by the non-federal sponsors and
the agency. Keeping with the Administration's policy of awarding
research grants competitively, no further Federal funding is requested.
The last agency evaluation of this project was conducted in
September 1996. The U.S. Department of Agriculture Technical Project
Officer attended a meeting of the Red River Water Management Consortium
to evaluate and determine the status of this effort, which is currently
the focus of research program activities. The Project Officer was
impressed with the progress made by the Red River Water Management
Consortium during its first year and believes this program is an
excellent example of how federal and state agencies, research and
academic institutions, private industry, and the general public can
work together to solve problems in an economical manner to benefit
people, communities, and the nation.
beef improvement--arkansas
The Arkansas Beef Improvement Program utilizes beef cattle farms to
demonstrate cost-effective management practices. An Arkansas Beef
Improvement Program Executive committee provides overall direction for
the program. A second aspect of the Arkansas Beef Improvement Program
is to inform all Arkansas cattle producers of the knowledge gained from
the program. This project addresses primarily local needs by setting
goals, evaluating resources and selecting the management practices that
will help the cattle producer achieve those goals in the decision-
making process. In view of significant needs for Extension efforts in
high priority national interest topics, such as improved pest
management systems, funds are not proposed to continue this program. At
the discretion of the state, Smith-Lever formula or other funding could
be redirected to support this program.
The original goal of the Arkansas Beef Improvement Program was to
enhance the profitability and efficiency of Arkansas cattle producers.
Accomplishments to date include the establishment of demonstration
farms, collection of benchmark data including soil tests, production
information, forage analyses and budgets, and renovation of pastures to
increase grazing capacity. Identification of mineral deficiencies in
beef cattle have been detected and corrected through proper
supplementation and ration balancing. Three of the ten farms averaged a
32 percent increase in pounds of beef sold per animal unit. Various
management changes including parasite control and forage/pasture
management have been instituted. Use of a cow-calf enterprise budget
has helped the producers identify both efficient and inefficient
management practices and take corrective actions. Additional
accomplishments for the Beef Improvement Program:
--Increased the net calf crop percentage from 85.6 percent to 96.0
percent--an increase of 10.4 percent
--Supplemental feed costs decreased by $23.93 per animal resulting in
a total farm saving of approximately $3,000
--205-day adjusted weaning weights have increased 7.6 percent--from
478 to 514 pounds
--Preweaning average daily gain has increased 7.5 percent--from 1.87
pounds to 2.01 pounds
--Weaning weight efficiency increased 5.1 percent--from 45.4 percent
to 47.7 percent
--Production costs decreased 36.9 percent, with the break-even cost
per pound of beef sold decreasing from $.60 to $.50.
$184,000 was appropriated each fiscal year for this project from
fiscal year 1993 through 1996. In fiscal year 1996 and 1997, $197,000
was appropriated each year. A total of $946,000 has been appropriated.
$95,000 has been provided by the state of Arkansas.
Ten Arkansas demonstration farms were selected, one in each of ten
counties, to reflect the different types of cattle operations and
cattle producers in the area. Farm sizes ranged from 140 to 920 acres
with an average of 360 and herd sizes ranged from 20 to 170 head,
averaging 66 head per farm. The Arkansas project started with 6
demonstration farms in 1992 and added 4 more farms in 1993. When the
farms were selected, it was agreed the Extension team would work with
the Arkansas cattle producer for 5 years.
Therefore, the first 6 demonstration farms completed the program at
the end of 1996, and the remaining 4 farms will complete the program at
the end of 1997. Data from the final year will be collected and
summarized for evaluation. The objective of the Arkansas program was to
demonstrate cost-effective management practices. The Arkansas Beef
Improvement Program has been very successful with achieving its
objectives. Keeping with the Administration's policy of awarding grants
competitively, no further Federal funding is requested for this grant.
A CSREES review of the project is conducted annually. The 1996
review noted the project is taking a sound approach to improving beef
production efficiency and profitability in Arkansas. The review
complimented the approach by the project to disseminate the results
widely through publications and educational programs for the benefit of
other producers in Arkansas and beyond.
delta teachers academy
The Delta Teachers Academy, which operates out of offices located
in New Orleans, Louisiana, is conducted by the organization known as
the National Faculty, headquartered in Atlanta, Georgia. It should be
noted that our State Extension partners are not involved in this
project. The National Faculty Delta Teachers Academy was launched in
1992 with a pilot grant of $500,000 from the United States Department
of Education. The United States Department of Agriculture's funding for
the project began in 1994. The Delta Teachers Academy project is
providing approximately 645 teachers at 40 sites throughout the seven
Lower Mississippi Delta states with development opportunities by
teaming them with university scholars in on-site sessions and
residential summer institutes. The subjects focused on during these
training opportunities are English, geography, history, mathematics,
and science. According to the grant recipient, the 219-county area
comprising the Lower Mississippi Delta region has been cited in reports
by the Educational Testing Service and the National Center for
Education Statistics as notably lagging in student performance in core
academic areas. In 1989, Volunteers in Service to America characterized
the area as the poorest region in the country. According to the
Southern Regional Education Board, at least five of the Delta states
have 20 percent or more of their school-age populations in poverty,
with Mississippi topping the list at 34 percent. In its report to
Congress in 1990, the Delta Development Commission cited serious
educational problems including poor student performance in core content
areas, demoralized teachers with little or no opportunity for academic
development, and region-wide difficulty in recruiting and retaining
qualified teachers. The Commission also stressed the links between
these problems and the pervasive poverty and depressed economic
conditions that characterize much of the seven-state Delta region. The
Commission's report also cited that 75 percent of the region's work
force lacks the basic reading skills necessary for technical training
and specifically cites the need for improved teacher training as one
means for breaking the cycle of poverty and economic
noncompetitiveness. In view of the significant need for research and
extension in high priority national interest topics such as integrated
pest management systems, funds are not proposed to continue this grant.
The original and continuing goal of the project is to address the
problem of insufficient professional development opportunities for the
elementary and secondary teachers of the seven-state region. The
Academy project has focused on the core subjects of English, geography,
history, mathematics, and science. Humanities, language arts, social
studies, reading, civics, and interdisciplinary subjects are also
covered by some sites. The Delta Teachers Academy began by offering
educational development activities for 100 teachers from approximately
50 rural districts at 10 sites. Training has now been expanded to
include 645 teachers at 40 sites across the entire seven-state region.
The project has improved teacher recruitment and retention in the
region.
A total of $13.661 million dollars has been appropriated to the
Department of Agriculture for this project, including $2 million
dollars in fiscal year 1994, $3.935 million dollars in fiscal year
1995, $3.876 million dollars in fiscal year 1996, and $3.850 million
dollars in fiscal year 1997. There are no non-federal funds identified
for this project.
The Delta Teachers Academy project is coordinated out of The
National Faculty's Southern Region office in New Orleans, Louisiana.
The project is being conducted at 40 sites selected from within the
seven-state Lower Mississippi Delta region including the states of
Arkansas, Kentucky, Illinois, Louisiana, Mississippi, Missouri, and
Tennessee.
The original objective was to provide three full years of training
to each faculty team established by the Delta Teachers Academy program.
Training consists of four two-day academic sessions and one two-week
summer institute for each team. This objective has been met for the
original 24 faculty teams first funded under the fiscal year 1994
Department of Agriculture grant. The 15 additional teams established in
1995 have received two years of in service training, and the one new
team established in fiscal year 1996 has received one year of training.
By the end of the current fiscal year 1997 grant, 39 of the 40 faculty
teams established by the Delta Teachers Academy will have met the
original objective of the program. Objectives for the fiscal year 1997
grant include completing training for the 240 teachers at the 16 sites
established during 1995 and 1996 and expanding professional development
activities to an additional 340 teachers at 19 new sites throughout the
seven-state Delta region. Additional objectives include sustaining
professional development activities for the 350 teachers at 27 former
Delta Teachers Academy sites through a new Academy Fellows Program and
cultivating 15 to 20 potential sites for establishing new programs in
fiscal year 1998. The anticipated completion date for any new program
sites established in fiscal year 1997 would be at the end of the year
2000. Keeping with the Administration's policy of awarding grants
competitively, no further Federal funding is proposed for this grant.
An assessment of the short-term impact of the Delta Teachers
Academy by Westat, Inc. of Rockville, Maryland was completed in May
1995. Westat's study found that the vast majority of participants
reported that the Academy had met their personal and professional needs
by renewing their enthusiasm for teaching, improving their self-
confidence, increasing their sense professionalism, improving their
knowledge of specific content areas, enhancing their teaching methods,
and providing opportunities to interact with peers. The study also
provided considerable evidence that teachers are applying what they
have learned from the Academy in their own classrooms. For example:
--86 percent said Academy activities had enhanced their knowledge of
the academic subjects they teach;
--88 percent said the Academy had helped them develop new teaching
skills and strategies;
--95 percent said they were now better equipped to pursue further
professional development;
--8 percent said the Academy had prepared them to assume leadership
roles in their schools;
--89 percent noted changes in their students' work habits, attitudes,
aspirations, and achievements.
United States General Accounting Office review of the Academy's
programs was also conducted in fiscal year 1995. The General Accounting
Office report--GAO/RCED-95-208 included summary statistics on over
1,000 teacher evaluations of Academy sessions as well as the General
Accounting Office's own survey of participants. The General Accounting
Office found that on average, participants reported that the Academy
was more effective than any other teacher development program they had
participated in, was very effective in renewing or enhancing knowledge
in one or more academic subjects, and was generally effective in
enhancing the teaching skills and strategies required for teaching
challenging academic content.
In addition, a site visit of the Delta Teachers Academy offices in
New Orleans, Louisiana and of the National Faculty's Summer Institute
at Tulane University was conducted by the Cooperative State Research,
Education, and Extension Service's National Program Leader for Higher
Education and Evaluation, during July 1996. The site visit confirmed
that participating teachers are very enthusiastic about the Delta
Teachers Academy program, that the instruction provided by The National
Faculty's university scholars is on target and appropriate to the K-12
teachers' needs, and that the facilities are very well suited to
program requirements. The site visit further confirmed that the Delta
Teachers Academy has strengthened the participating teachers' ability
to teach by improving their content knowledge base, helped them become
leaders of other teachers by requiring them to conduct staff
development back at their home schools, and had a positive impact on
student learning. School superintendents report greater student
enthusiasm, more homework, and higher test scores for students whose
teachers were in the Delta Teachers Academy program.
extension specialist (ar) (extension farm management education project)
The Federal funds support a small/family farm management and
marketing education program, headquartered at the South Central Family
Farm Research Center, a USDA-ARS facility in Booneville, Arkansas. The
program takes research generated at the Center and adapts it to
management and marketing education programs to meet the needs of small
family farmers and provides support to county and state extension
personnel who actually deliver these programs. According to the grant
recipients, nearly three fourths of all U. S. farms have gross sales
less than $50,000. In the 10 state area served by the Booneville Center
this percentage is even higher. Both the research and extension
programs are targeted to the needs of this small, family farm audience.
The eight specific objectives of this project cover a variety of
management and marketing needs of smaller farm operators to help them
improve family income through improved management and marketing skills.
However, in view of significant need for extension efforts in high
priority national interest topics, funds are not proposed for this
project. At the discretion of the State, Smith-Lever formula or other
funds could be used to support this project. The original goal of the
program was to develop a small/family farm management and marketing
education program based on the research program of the Booneville
Research Center, which considers the limitations and potentials faced
by small family farmers as they decided how to improve farm efficiency
and technology use, how to minimize risk under severe capital
constraints, and how to combine farm enterprises on limited acreage to
best utilize available family labor while minimizing capital
investment.
This project began in fiscal year 1992 with an appropriation of
$92,000. Subsequent federal funds were $92,000 in fiscal year 1993;
$92,000 in fiscal year 1994; $92,000 in fiscal year 1995; $99,000 in
fiscal year 1996 and $99,000 in fiscal year 1997. Appropriations to
date total $566,000.
The Arkansas Cooperative Extension Service has provided the
following state funds: $59,040 in fiscal year 1992; $55,680 in fiscal
year 1993; $55,446 in fiscal year 1994; $55,446 in fiscal year 1995;
$54,446 in fiscal year 1996; and $46,364 in fiscal year 1997.
Nonfederal funds provided to date amount to $324,422.
The Arkansas Extension Farm Management Program is headquartered in
Booneville, Arkansas, and serves the 10 south central states included
in the service area of the ARS South Central Family Farm Research
Center. The original proposal in 1992 was for a 12 month period;
however the emphasis of the program has shifted as the educational
needs of the target audience and as the research program of the Center
have changed. During the current fiscal year, program emphasis is on
provision of information about alternative farm enterprises and
updating farm management application software. The current phase of the
program runs through February of 1998. No further federal funding is
requested.
CSREES performed a merit review of this program in January 1997 as
we reviewed the proposal for 1997. The review concluded the project has
been successful in meeting the specific educational needs of an
underserved clientele group. The review also pointed out this program
serves as an excellent example of cross-agency, and public-private,
coordination and cooperation.
extension specialist, mississippi
The Basic Weather Service and Extension project is a two phase
program. The first year funding will be used to gather and disseminate
critical agricultural weather data for producers and researchers in
Mississippi and surrounding states. The grant proposal states that the
Ag Weather Service facility was closed recently at Stoneville,
Mississippi. This action has created a void in the availability of and
access to critical weather data that producers and researchers use to
make management decisions and formulate research projects,
respectively. This is a first year project and the goal is to collect,
maintain, and disseminate weather information for producers and
researchers in Mississippi and surrounding states. In view of the
significant high priority national interest extension topics such as
IPM, funds are not proposed for this project. At the discretion of the
state, Smith-Lever formula or other funds could be used to support this
project.
This is a new program which is being planned and initiated this
year. The first year appropriation is $50,000. The State of Mississippi
through the Mississippi Cooperative Extension Service and Delta
Research & Extension Center is providing $41,350 in state appropriated
funds to support this project in 1997.
The project will be conducted at the Delta Research & Extension
Center in Stoneville, Mississippi. This project is expected to continue
into a Phase II program. Keeping with the administration's policy of
awarding grants competitively, no further Federal funding is proposed
for this grant.
This is a new project being initiated this fiscal year and for this
reason no evaluation has been conducted yet.
income enhancement demonstration, ohio
The Federal funds support the Agricultural Business Enhancement
Center which plays a major role in the development of the agricultural
sector of Northwest Ohio. The Center provides a variety of management
training programs, helps farms and other agribusinesses develop
comprehensive business plans, and facilitates business networking. This
grant is targeted to local Northwest Ohio needs. Farmers and other
agribusiness firms must be able to adapt to a large number of major
changes affecting the entire food system from the farmer to the
consumer. These include changes in farm programs, globalization of
markets, new technologies, information systems, consumers' concerns for
food safety and nutrition, and society's concern for protecting the
environment. Individuals, families, firms and communities in Northwest
Ohio need to understand the changes, develop and implement effective
strategies for managing change. In view of significant need for
extension efforts in high priority national interest topics, funds are
not proposed for this project. At the discretion of the State, Smith-
Lever formula or other funds could be used to support this project. The
original goal of the project was to help people develop new businesses
and restructure and expand existing businesses in order to enhance
incomes in Northwest Ohio. Recent accomplishments include several
workshops to improve the management and marketing capacity of local
farms and agribusiness firms. At the close of a special workshop for
women in agriculture, 75 percent said their participation would improve
management of the family farm. The Center has a major role in examining
the feasibility of a new tomato processing plant-in the region. The
Center continues to conduct economic research on market opportunities,
provide a variety of management training programs, help individual
farms and other agribusinesses develop comprehensive business plans,
and facilitate networking with businesses in other regions of the
United States and around the world.
The project began in fiscal year 1991. Appropriations have been as
follows: $145,000 in fiscal year 1991; $250,000 in fiscal years 1992
through 1995; and $246,000 in fiscal years 1996 and 1997.
Appropriations to date total $1,637,000. The State of Ohio has
appropriated the following funds: $35,100 in fiscal year 1991; $72,368
in fiscal year 1992; $56,930 in fiscal year 1993; $30,547 in fiscal
year 1994; $49,935 in fiscal year 1995; $51,432 in fiscal year 1996;
and $48,664 in fiscal year 1997. Non-federal funding provided to date
totals $344,976.
The Agricultural Business Enhancement Center is located in Bowling
Green, Ohio and serves eight counties in the Toledo Metropolitan Area.
Project leadership and data analysis is being provided by the
Department of Agricultural Economics, Ohio State University, Columbus,
Ohio. The original proposal in 1991 was for a period of 12 month. The
current phase of the program will be completed in September 1997. No
further Federal funding is requested for this grant.
CSREES performed a merit review of the project in January 1997 as
it evaluated the project proposal for 1997, and concluded that it plays
a major role in enhancing the competitiveness of the agricultural
sector in eight counties of Northwest Ohio and that it has been
effective in stimulating economic development in that area.
integrated cow/calf management--iowa
CHIPS is an integrated cow-calf resource management (IRM) program
which originally targeted an eleven county area in southeast Iowa. The
intent of the program is to improve the area's rural economy by
maximizing the profit potential of individual livestock operations. The
CHIPS concept was also initiated to promote the development of forage
systems which utilize highly erodible land (HEL), including land to be
released in the CRP program. The geographical area where CHIPS services
are offered systematically expanded to over 20 southeast and south
central Iowa counties through fiscal year 1995. Expansion of the CHIPS
program in area covered, services offered, and cooperator numbers
continued to increase in 1996, with technical support expanding to an
additional 14 counties in east central and southwest Iowa. Southeast
Iowa contains extensive areas of marginal lands which are highly
erosive (HEL) and should not be intensively farmed with row crops.
These rolling hills are capable of producing high quality forages and
are supportive to the cattle industry. 1996 marks the beginning of the
release of Conservation Reserve Program (CRP) contracts--with thousands
of these acres categorized as HEL. CHIPS is instrumental in assisting
producers as sound management decisions are finalized regarding these
CRP acres. CHIPS's long-term sustainable approach supports cow-calf
production on this marginal ground and provides one-on-one assistance
as economic and production decisions are made. The importance of the
CHIPS program is highlighted by the current depressed economic state of
the cow-calf industry. Negative financial returns have been a reality
over the past 18 months and most economists predict this financial
environment will continue in 1998. However, in view of significant
needs for Extension efforts in high priority national interest topics,
such as improved pest management systems, funds are not proposed to
continue this program. At the discretion of the state, Smith-Lever
formula or other funding could be redirected to support this program.
The overall goal of CHIPS is to have a positive effect on the
area's economy by improving the long-term profit potential of the local
cattle industry. To address this broad project goal, CHIPS has set
forth the following objectives:
--Improve profit potential of cooperator farms
--Identify issues and trends in management data.
--Raise the awareness and understanding of over 2,000 agricultural
producers in southeast Iowa about cow-calf production on highly
erosive land and the integrated resource management concept.
--Provide over 130 producers with intensive technical assistance to
develop goals and individualized farm recommendations,
including management areas such as pasture and forage
production, rations, utilization of resources, record systems,
and government fan-n program compliance. During 1997, the
number of operations served is expected to increase to
approximately 200.
--Help producers develop management skills to improve efficiency and
reduce costs of production as CHIPS recommendations are
implemented.
Over 130 cooperators, involving approximately 11,000 beef cows, are
currently enrolled and participating in the CHIPS program. Four full-
time technicians and one part-time specialist have conducted over 600
farm/office consultations during fiscal year 1996 to develop specific
on-the-farm recommendations and assist with the problem solving and
decision making process. These contacts involved a wide variety of
technical assistance, with primary emphasis on nutrition, cost-
effective ration development, genetic evaluation, value added
practices, and cow production concerns. Over 60 cooperators have
incorporated the Cow Herd Appraisal of Performance Software (CHAPS) and
Standardized Performance Analysis (SPA) programs in their operations.
During fiscal year 1996, 3000 head of beef animals were permanently
identified to facilitate record and data collection. More than 7500
cattle were weighed and monitored to evaluate performance and
production levels. Over 250 forage samples were collected and analyzed,
with the information being utilized in over 300 individualized ration
recommendations. Selected management recommendations are highlighted by
CHIPS technicians on a monthly basis. These financial and/or
performance impacts are summarized in a report prepared and distributed
quarterly.
Two networking projects are being developed through the efforts of
the staff involved with the CHIPS program. A CHIPS Heifer Development
Program was initiated in November, 1996, coordinating the management of
over 200 breeding heifers from 10 CHIPS cooperators. The goal of this
project is (1) to incorporate technological advances in the area of
heifer development, and (2) to improve the genetic base of these ten
operations through the use of artificial insemination, genetic
evaluations, and nutritional management. A CHIPS Feedlot Program is
also being developed which will provide cooperators, regardless of the
size of the operation, an opportunity to retain ownership of their
animals from birth to market. This value-added approach will expand the
marketing opportunities for individual cow-calf operations and improve
the profit potential for cooperators with Genetically superior animals.
A state-wide bull test evaluation is also being monitored by CHIPS
personnel in conjunction with the Iowa Cattlemen's Association.
$138,000 was approved for fiscal year 1992; $138,000 was approved
for fiscal year 1993; $276,000 for fiscal year 1994; $350,000 for
fiscal year 1995; $345,000 for fiscal year 1996; and $345,000 for
fiscal year 1997. Federal funding through fiscal year 1997 totals
$1,592,000.
CHIPS participants pay client fees of approximately $3.00 per cow.
This fee structure is on a sliding scale which adjusts for cow herd
size. To date, approximately $60,000 has been collected from CHIPS
cooperators.
The CHIPS program is currently being operated in southeast and
south central Iowa and involves the following counties: Van Buren,
Davis, Jefferson, Wapello, Appanoose, Monroe, Mahaska, Keokuk,
Washington, Henry, Des Moines, Louisa, Wayne, Marion, Lucas and Lee in
southeast Iowa and Clarke, Decatur, Ringgold, Union, Adair, Adarns, and
Taylor in the south central area. The fiscal year 1996 expansion effort
extends CHIPS services to the following counties in east central and
southwest Iowa: Jackson, Dubuque, Jones, Cedar, Clinton, Scott, Linn,
Johnson, Fremont, Page, Mills, Montgomery, Pottawattamie, and With this
expansion effort CHIPS is offering program services to approximately 60
percent of the state's cow-calf operations.
The CHIPS program was initially projected to address the goals and
objectives of the project in a three year time frame. The objectives
and goals of the CHIPS program will continue to be modified to meet the
needs of the cooperators and to adjust to the rapidly changing cattle
industry. The level of technical assistance and method of program
delivery will require adaptation to meet the new objectives which
emerge. Expansion of value added services is an area of increased
interest by cooperators. Discussion with Precision Beef Alliance, a
value added pasture-to-plate program, is scheduled. Keeping with the
administration's policy of awarding grants competitively, no further
Federal funding for this grant is requested.
A CSREES review of this project is conducted annually. The CSREES
project liaison met with the project leader during 1996 to discuss
plans for expansion of the CHIPS program. The 1996 review found a
comprehensive approach to enhancing the cow-calf industry in Iowa with
a strong educational effort in addition to hands-on assistance with
records and management decision making. The review noted activities to
make CHIPS self-supporting and to evaluate its impact on producers.
pilot technology project, wisconsin
Primary industrial extension activity of the Manufacturing
Technology Transfer program is the delivery of technical assistance to
manufacturing companies. Executive direction in determining the
assistance required will be provided by the Stout Technology Transfer
Institute with direct consultation and long-term in-plant assistance
delivered primarily through the efforts of university Project Managers
and Co-op students. Direct assistance may be delivered through staff of
the University of Wisconsin System (both two-and four-year
institutions, and Extension services); the Wisconsin Technical College
System; secondary schools; the private sector; professional societies,
and private consultants, or attendance at state or national seminars.
The projects also draws on many other state resources to add expertise
and capacity to network facilitation and in-plant extension activities.
American's manufacturers continue to face tremendous global
competition. There are enormous pressures to improve the quality of
products; reduce the time consumed to bring new products to market; and
there remains an ever increasing demand to reduce the cost of products.
Currently there is a strong movement in manufacturing to use speed-to-
market combined with new product introduction as a tool to obtain a
competitive advantage. While high quality and cost efficiencies
continue to be mandatory commitments for today's manufacturers, great
value is now being placed on speed-to-market. Large companies are not
the only ones influenced by these trends. Small and medium size
manufacturers often supply larger firms. Hence, they must be able to
quickly process large amounts ants of information and solve complex
problems. However, in view of significant needs for research in other
high priority national interest topics, funds are not proposed to
continue this grant. At the discretion of the State, other funding
could be used to support this research.
The Manufacturing Technology Transfer program's principal objective
is the development of a competitive, secure manufacturing base through
the mechanism of industrial extension. The program principally targets
small and medium size manufacturers in rural Wisconsin. This funding
will: (1) continue to provide valuable industrial extension service to
the target audience; (2) support the continued empirical development of
an industrial extension model, and (3) investigate the use of super
computer technologies to support global competitiveness of
manufacturers. Specific accomplishments have been to:
--Perform plant evaluations.
--Identify opportunities for productivity improvements.
--Implement new organizational and operational methods.
--Investigate new manufacturing technology, with focus on super
computing.
--Establish quality assurance/total quality systems.
--Establish ongoing training programs.
--Deliver on-site instruction in new technologies, improved methods
and processes.
This project has been underway since fiscal year 1992 and was
funded for $165,000 in fiscal year 1992, fiscal year 1993, fiscal year
1994, fiscal year 1995, and for $163,000 in fiscal year 1996 and fiscal
year 1997 a total of $986,000. No non-federal funds have been provided
for this project.
The work will be carried out by the University of Wisconsin-Stout.
The original proposal in 1992 was for a period of 12 months. However,
the Manufacturing Technology Transfer Program was developed as a
continuously evolving industrial extension strategy for serving the
needs of the manufacturing community. As an ongoing project, the
Manufacturing Technology Transfer Program is measured by success in
meeting the objectives of the past five years' proposals, including the
delivery of modernization assistance and development of an industrial
extension model. The current phrase of the program will be completed in
1997. In keeping with the Administration's policy of awarding grants
competitively, no further Federal funding is requested for this grant.
To measure the success of the project, a client evaluation process
has been developed which includes an evaluation questionnaire. At the
conclusion of interaction, each client is asked to evaluate services by
completing a survey which reflects the program's stated goals and
results are available annually. Evaluations indicate significant
forward strides in creation, new businesses, expanded productivity, and
enhanced international competitiveness.
range policy development, new mexico
The project is collecting economic data on a statewide basis. The
data is being used to build an economic model that will allow
policymakers to better understand how local and state economies are
tied to primary industries, notably those industries using public
lands. In New Mexico and throughout the western states, local economies
are frequently tied to the use and management of public range and
forest lands. By describing how local industries provide personal
income as well as local, state, and Federal tax revenues, we may be
better prepared to estimate the impacts of proposed legislation and to
craft policies that will enhance, rather than detract, from local
economies. However, in view of the significant high priority national
needs for extension projects such as IPM, additional funding is not
proposed for this grant. At the states discretion, Smith-Lever b&c
funding could be used to continue this project. Each New Mexico county
will have a detailed input/output model developed from state and county
tax revenue data. The results of the economic model forecasts will be
shared with county decisionmakers in public forums across the state.
This project was initiated in December 1994. It has been funded
year-to-year to accomplish annual objectives. The first tier of
objectives were met in 2 years. The project objectives are being
revised for fiscal year 1997, and we anticipate another 2 years to
complete the second phase of the project in September 1998. The total
appropriation has been $594,000. The project budget does not indicate
any non-federal support. However, the economists working with this
project have initiated a regional research project to follow up with
the model, and the regional project includes investments from
universities in seven western states.
According to the project coordinator, most of the original
objectives have been accomplished. The investigators are currently
collecting data to allow incorporation of other industry and government
sectors into the model. These objectives should be accomplished in 2
years. Keeping with the Administration's policy of competitively
awarding grants, no further Federal funding is proposed.
The proposal for continuing funding underwent merit review by a
team of CSREES National Program Staff in June 1996 and a review of
progress by the project liaison in November 1996. Both reviews were
positive and returned recommendations that the project receive the
funding earmarked for it in fiscal years 1996 and 1997.
rural center aids/std prevention, indiana
This program created the Rural Center for AIDS/STD Prevention,
formerly named the Rural Center for the Study and Promotion of HIV/STD
Prevention, jointly between Indiana University, Bloomington, Indiana
and Purdue University, West Lafayette, Indiana. The Center is
headquartered at Indiana University. The purposes of the Rural Center
for AIDS/STD Prevention are (1) the development and evaluation of
innovative educational material and approaches designed to reduce HIV/
STD risk behavior and incidence in rural areas, and (2) the
investigation of the social and behavioral barrier to HIV/STD
prevention, the findings from which can be applied to the creation of
prevention programming. The grant request states that many perceive
that HIV/STD in only a problem in large urban areas. However, HIV/STD
are found everywhere, including small towns and rural areas, suburbs,
and large cities. HIV/STD are becoming increasingly serious in non-
urban areas. In view of significant needs for extension efforts in high
priority National interest topics such as improved pest management
systems, funds are not proposed to continue this program. At the
discretion of the State, existing Smith-Lever funding could be
redirected to support this program.
The goals of this project are (1) the development and evaluation of
innovative educational material and approaches designed to reduce HIV/
STD risk behavior and incidence in rural areas, and (2) the
investigation of the social and behavioral barrier to HIV/STD
prevention, from which findings can be applied to the creation of
prevention programming. Information has been compiled on the incidence
and costs of rural HIV/STD; educational materials have been developed
for field testing and evaluation; a national rural HIV/AIDS
videoconference has been conducted; and a newsletter established.
Accomplishments in fiscal year 1996 included the development of
computer software and peer educational material; expansion of the
Prevention Resources Library; analysis of selected HIV/STD-related
determinants of rural adolescents, adults, and migrant farmworkers;
needs assessments of women and children with HIV; modeling of the HIV
epidemic; and caregiver/persons with AIDS/community linkages. In fiscal
year 1997, proposed projects include assessing the health and family
correlates of HIV/STD-risk behavior, development of HIV/STD prevention
education material, modeling the effects of multiple drug therapies,
and assessing the HIV education needs of rural special education
students.
This is the fourth year of funding for this program. Work began on
January 3, 1994. The fiscal year 1997 funding for this program is
$246,000. Total funds appropriated to date are is follows : $250,000 in
fiscal years 1994 and 1995; and $246,000 in fiscal years 1996 and 1997
for a total amount of $992,000. The source of non-federal funds for
this program is state of Indiana appropriated funds to Indiana
University. The amount of non-federal funds are $145,406 in fiscal year
1994; $83,141 in fiscal year 1995; $91,979 in fiscal year 1996; and
$115,166 in fiscal year 1997 for a total non-federal funding amount of
$435,692.
The work is being carried out jointly in the Department of Applied
Health Science, and the Center for AIDS Research, Indiana University,
Bloomington, Indiana, and the Department of Sociology, Purdue
University, West Lafayette, Indiana. The Center was established to
provide leadership, particularly in the Midwest, in efforts toward
stopping the spread of HIV infections and sexually transmitted diseases
in rural areas since no other such center existed. The first year's
objectives were to develop a rural AIDS education needs assessment,
develop innovative youth educational material, develop a resources
center, evaluate a new school-based curriculum, develop family
intervention strategies for decreasing adolescent risk behaviors, to
assess the clinical and psychological needs of rural women and children
with HIV, assess the needs of family caregivers for rural persons with
AIDS, and examine the financial impact of HIV/STD on rural families.
Since these projects are funded on an annual basis, the completion date
for project objectives has been the end of each fiscal year. Keeping
with the Administration's policy of awarding grants competitively, no
further Federal funding for this grant is requested.
The agency receives quarterly and annual progress reports on the
project. Based on these reports, the agency has found that the Center
has consistently met its objectives in educational material development
and educational program delivery. The Center has become the primary
source of HIV, AIDS, and other STD educational materials and programs
for rural America.
rural development, nebraska
The Center for Rural Community Revitalization and Development,
Nebraska Cooperative Extension Service has supported an on-going
applied research/outreach effort to improve the delivery and impact of
land grant programming to small and rural communities and businesses.
The grant has allowed the institution and other State and Federal
agencies to refine the delivery and efficiency of programming within
the state of Nebraska. It has supported the development of program
partnerships and alternative means of providing technical support to
rural constituencies. The Center is providing cutting-edge approaches
in the development and delivery of technical assistance to rural
constituencies. Information age technology is being incorporated into
the delivery of both university and Federal/State agency programming.
In view of significant needs for research in high priority national
interest topics, funds are not proposed to continue this project. At
the discretion of the State, Smith-Lever formula or other funding could
be used to support this project. The original goal was to provide
improved technical assistance to distressed rural businesses and/or
emerging businesses in distressed communities. Through a series of 72
workshops in 67 communities over 1,341 business owners/managers were
provided technical assistance. Currently, new strategies are being
developed to provide technical assistance in a more cost efficient
method.
The project has been operating since October 1978 and Federal
appropriations through fiscal year 1993 were $1.74 million. For fiscal
years 1994 and 1995, $400,000 was appropriated each year, for fiscal
year 1996 and 1997, $386,000 was appropriated each year. Total funding
to date is $3,326,000. All Federal funds have been matched by an
equivalent amount of non-federal funds each year of operation through
fiscal year 1995. The fiscal year 1995 amount was $99,305. The non-
federal support has been primarily in the form of staff for the past
two fiscal years.
Research is being conducted at the University of Nebraska. The
original completion date was September 30, 1989. The original
objectives of the research project have been met. The completion of
additional objectives is scheduled for September 30, 1998. However, in
keeping with the Administration's policy of awarding grants
competitively, no further Federal funding for this grant is requested.
Research could be continued at the State's discretion using formula
funds.
The agency evaluates merit of research proposals as submitted. No
formal evaluation of this project has been conducted.
rural development through tourism, new mexico
The Rural Economic Development Through Tourism Project is a rural-
based economic development activity to create new jobs and sources of
income in small and rural communities in a seven county area of New
Mexico. The focus of the development is on tourism and related
businesses. The program supports training, strategic planning, and
technical assistance for communities and tourism businesses. This is a
pilot project to demonstrate the effective development and
implementation of training, education, and technical assistance related
to rural tourism. Tourism development is a strong area of interest to
many small and rural communities throughout the United States. However,
in view of significant needs for extension efforts in high priority
National interest topics, funds are not proposed to continue this
program. At the discretion of the State, other funds such as Smith-
Lever could be used to support this effort. The New Mexico Cooperative
Extension was to spearhead a comprehensive program to assist small and
rural communities in increasing economic development opportunities
through tourism. A regional task force composed of extension
representatives and community leaders from business, industry,
education, and government at the federal, state, and local levels
guides the development and implementation of effective and efficient
programming to support rural tourism development. The results of REDTT
include a video, a public relations program, an image study, a regional
tourism map and guide, a regional tourism bus package, festival
planning workshops, development of a regional agricultural tour, and
development of a mini-grants funding program.
In fiscal years 1992 through 1995, $230,000 was appropriated each
year. In fiscal year 1996, $227,000 was appropriated. For fiscal year
1997, $227,000 has been appropriated for a total funding amount of
$1,374,000. In fiscal year 1992, $38,764 of state matching funds were
provided. For fiscal years 1993, 1994, 1995, and 1996, $39,360 of state
funds were provided. Fiscal year 1997 funds of $39,040 are being
provided.
Research/programming is being supported at the New Mexico State
University. The original completion date was September 30, 1993. The
original objectives of the research project have been met. The
completion of additional objectives is scheduled for March 31, 1993.
Keeping with the Administration's policy of awarding grants
competitively, no further Federal funding is requested for this grant.
The agency evaluates the merit of research proposals as they are
submitted. No formal evaluation of this project has been conducted.
rural development, oklahoma
This program provides technical assistance to small business in
support of job creation. It provides evaluation of new products and
processes that may result in new industries or that may be applied to
improve existing manufacturing processes. The program has resulted in
job creation and industrial development through the operation of
business incubators, new product and process fairs, marketing
assistance to rural entrepreneurs, and financial assistance for plant
expansion and new business starts. The operation of the rural incubator
program that provides a stable and nurturing environment that small
businesses need to grow into profitable concerns. These incubators
consist of buildings designed for the specific purpose of starting a
new manufacturing or technology-based company. Also small business
needs access to technical assistance, worker training, technology
transfer, financial aid, and business management assistance in order to
stay competitive in domestic and world markets. However, in view of
significant needs for research in other high priority national interest
topics such as improved pest management systems, funds are not proposed
to continue this grant. At the discretion of the State, other funding
could be used to support this research, such as Smith-Lever.
The original goal of the program was to assist rural business in
Southeast Oklahoma to get systematic access to improved technology,
training, financial and business management assistance. Many
accomplishments have resulted including financial assistance. Rural
Enterprise, Inc., is a Certified Development Corporation for the Small
Business Administration. As a result, Rural Enterprise, Inc., has
obtained financing for entrepreneurs and businesses totaling
$66,392,855. Specific technical assistance efforts have included:
working with a company regarding different ways to cut a radius in a
board to allow a forklift to pick up pallets from the side making it a
4-way unit; working with a technology transfer center to assist a
client in the design of a muffler for air tools to provide statistical
data on decible reduction and frequency harmonics reductions; working
with a company to identify and solve an engineering problem they were
having with a new product.
Appropriations to date are as follows: $433,000 in fiscal years
1988 and 1989; $430,000 in fiscal year 1990; $431,000 in fiscal year
1991; $300,000 in fiscal years 1992 through 1995; and $296,000 in
fiscal years 1996 and 1997. Appropriations total $3,519,000. No non-
federal funds have been provided for this project.
The work is being carried out at Rural Enterprises, Inc., in
Durant, Oklahoma. The original proposal in 1988 was for a period of 12
months. However, the objectives of Rural Enterprises, Inc., are on-
going because of the nature of the activity. The clientele is diverse
and decentralized. The engineering and management consultation model
being pursued with individual clients results in a situation where
hundreds of problems are being pursued simultaneously and when solved
are replaced by new issues resulting from international competition,
regulations, training needs, and changeover costs. The next phrase of
the program will be completed in 1997. In keeping with the
administration's policy of awarding grants competitively, no further
Federal funding is requested for this grant.
CSREES staff responsible for project liaison have conducted on-site
visits and have formed evaluations through the agency's merit review
process. Rural Enterprises itself conducts in ongoing evaluation
process to measure the organization's effectiveness and efficiency in
accomplishing its objectives and this is documented on a quarterly
basis through our reporting system. Significant numbers of jobs and new
businesses have resulted from this program.
rural rehabilitation, georgia
The program has tested the feasibility of providing satellite-based
adult literacy education, in association with vocational rehabilitation
services, to handicapped adults in rural Georgia. The program has
developed curriculum, tested and adapted technology, established
student recruitment and retention strategies, expanded to Statewide
coverage, and provided successful adult literacy education. A state
task force has estimated that 25 percent of Georgia's adult population
is functionally illiterate. Illiteracy is regarded as a form of
disability in Georgia. In view of significant needs for extension
efforts in high priority National interest topics such as improved pest
management systems, funds are not proposed to continue this program. At
the discretion of the State, existing Smith-Lever funding could be
redirected to support this program. The original goal of this program
was to prove that distance learning can be an effective tool for
reaching and teaching functionally illiterate adults in rural areas.
This program has demonstrated that satellite-based literacy training,
in cooperation with vocational rehabilitation services, can
successfully provide adult literacy education designed to improve
critical reading, writing, and thinking skills for handicapped rural
adults. The program now enrolls about 640 students per quarter, with
approximately 70 percent expected to complete the full eight quarters
of literacy education. Over the past eight years, test scores and
attendance rates of students in the satellite based program have shown
that distance leaming is an effective delivery system for instructing
low-level readers and non-readers. Test scores and attendance rates of
students in this program have been comparable to those of students in
traditional, urban classes.
Funding for this program was initially appropriated in fiscal year
1989, and the program has been in operation since March 1989. Through
fiscal year 1997, appropriations for this program have been as follows:
$129,000 in fiscal year 1989; $256,000 in fiscal year 1990; $256,000 in
fiscal year 1991; $256,000 in fiscal year 1992; $250,000 in fiscal year
1993; $250,000 in fiscal year 1994; $250,000 in fiscal year 1995;
$246,000 in fiscal year 1996; and $246,000 in fiscal year 1997. Funds
appropriated to date total $2,139,000.
The fiscal year 1997 source of non-federal funds provided for this
program are state appropriated funds is from the Georgia Department of
Adult Education. Prior years' sources also included private
contributions from the Woodruff Foundation and other local foundations.
Through fiscal year 1997, the total amount of non-federal funds
provided the project has been $6,697,581. The breakdown by fiscal year
is $164,000 in fiscal year 1988; $270,500 in fiscal year 1989; $809,675
in fiscal year 1990; $656,765 in fiscal year 1991; $65,000 in fiscal
year 1992; $1,019,821 in fiscal year 1993; $20,000 in fiscal year 1994;
$872,500 in fiscal year 1995; $1,500,000 in fiscal year 1996; and
$1,319,320 in fiscal year 1997.
The Georgia Tech Satellite Literacy Project is sponsored and
operated by four organizations: Georgia Institute of Technology's
Center for Rehabilitation Technology, the Center for Rehabilitation
Technology (CRT), Inc., Literacy Action, Inc. and the Georgia
Department of Technical and Adult Education. The program grantee is
CRT, Inc., a private, not-for-profit business advisory board to the
Center for Rehabilitation Technology, College of Architecture, Georgia
Institute of Technology, from which the literacy instruction is
provided.
The 100 classes at 77 adult literacy classroom sites, dispersed
throughout the State of Georgia and one site in Virginia, include 18
technical schools, 42 adult learning centers, 8 high, middle or
elementary schools, 3 universities, 3 libraries, 2 rehabilitation
centers, and one other site.
It was anticipated that it would take three years to demonstrate
that distance leaming can be an effective tool for reaching and
teaching functionally illiterate adults in rural areas. That original
objective was met in fiscal year 1991. Additional objectives since
fiscal year 1991 have been to expand the outreach of the satellite
based adult literacy program to enough additional sites throughout the
state of Georgia so that all potential participants have reasonable
access to the program; to continually upgrade the quality of class
programming and the technical capacities of the system. It is
anticipated that the latest technological upgrades, expanding the
capacity of the program more than twenty-five-fold (from seventy-seven
to over 2,000 downlink sites), and a six-fold increase in broadcast
hours, and making materials available as supplemental tools to all
Georgia literacy classes, will be completed by the end of the current
project period, February 28, 1998. Keeping with the Administration's
policy of awarding grants competitively, no further Federal funding is
requested for this project.
The agency receives annual reports on the project. Based on these
reports, the agency has found that the project has made progress in
demonstrating the feasibility of utilizing distance learning technology
and teaching methods to provide adult literacy education programs to
handicapped adults throughout the state of Georgia. The project has
been successful in applying the latest distance education technology to
both control the program cost per participant and, most recently, to
expand the availability of the program.
technology transfer projects, oklahoma and mississippi
The original work plans involved the transfer of uncommercialized
technologies from Federal laboratories and universities to rural
businesses and communities. Over time, the objectives have evolved to
providing more one-on-one assistance to small manufacturers. This type
of assistance responds to the stated needs of the small manufacturing
community and fills a recognized gap in the existing service provider
community. Manufacturing extension programs throughout the country have
identified one-on-one engineering technology assistance as a critical
need for small manufacturers as they attempt to become more competitive
and profitable. Oklahoma State University and Mississippi State
University are the only public service providing organizations that
have the demonstrated capability to provide such assistance in their
respective areas. However, in view of significant needs for research in
other high priority national interest topics such as improved pest
management systems, funds are not proposed to continue this grant. At
the discretion of the State, other funding could be used to support
this effort, such as Smith-Lever. The primary goal of these programs is
to contribute to an increase in business productivity, employment
opportunities and per capita income by utilizing technology and
information from Federal laboratories; Rural Enterprises Development
Corporation and Industrial Technology Research and Development Center
in Durant, Oklahoma; Mississippi State Food and Fiber Center;
Vocational-Technical Education System; Center for Local Government
Technology; Cooperative Extension Service; and other university
departments and non-campus agencies. Specific program objectives are
to:
--Develop greater profitability of existing enterprises.
--Aid in the acquisition, creation or expansion of business and
industry in the area.
--Establish an effective response process for technological and
industrial related inquires.
--Devise effective communication procedures regarding the program for
the relevant audiences.
Funding appropriated to date is as follows: $350,000 in fiscal
years 1984 and 1985; $335,000 in fiscal year 1986; $333,000 in fiscal
years 1987 through 1990; $331,000 in fiscal years 1991 through 1995;
and $326,000 in fiscal years 1996 and 1997. Appropriations to date
total $4,674,000.
Although no non-federal funds have been required, Oklahoma State
University and Mississippi State University have provided considerable
amounts of matching support from state funds over the life of the
project. For the past four years, for example, support has included a
significant portion of engineering faculty salaries as well as the
administrative support of county and district extension staff.
The work is being carried out at Mississippi State University and
Oklahoma State University which are providing on-site assistance to
small manufacturers. The original proposal in 1984 was for 12 months.
The original objectives have been, and continue, to be met. Although
individual client projects have a beginning and end, the technology
transfer process is continuous. Over the past years, specific and
measurable annual objectives and the achievement of objectives have
been documented in annual reports. The objectives of both programs have
been to: (1) continue the delivery of high-quality engineering
assistance and technology transfer services to small manufacturers; (2)
conduct joint workshops, client referral, and joint research and
application projects; and (3) demonstrate a value of service to
clients. The current phase of the program will be completed in 1997. In
keeping with the Administration's policy of awarding grants
competitively, no further Federal funding is requested for this grant.
Site visits and merit reviews have been conducted annually on these
projects as well as client surveys by project staff themselves. Survey
results have documented significant job creation, productivity
enhancement, and local community economic activity.
wood biomass, new york
The objective of this program is to expand, implement, and gain
acceptance of wood biomass as a sustainable, renewable and
environmentally friendly fuel source. Moreover, the program is viewed
as a means of stimulating alternative forest products for the Nation's
Central and Northern hardwood forests regions. The principal
researchers believe that the project is of national interest. Biomass
research studies through the U.S. Department of Agriculture and the
Department of Energy span 20 or more years. As a result, the Nation is
in a position to scientifically produce alternative fuels for power
generation systems. Moreover, the Department of Agriculture and the
Department of Energy research can provide information on the value of
tree plantings to carbon sequestration, rural economic development, and
soil erosion and sedimentation associated with conventional
agriculture. However, in view of the significant research needs on
national high priority issues, funding for this project is not
proposed. At the State's discretion, Hatch Act or other funding could
be used to support this effort. The goal of this, project is to
promote, via applied research and technology transfer: wood biomass for
energy as an alternative farm product; the wise stewardship of land
resources; the use of domestic, renewable and sustainable energy; and
enhanced farm profitability. To accommodate this, scientists at the
State University of New York are planting willow trials on several
sites and under several conditions. Site preparation occurred during
the spring and summer of 1996. Some planting occurred during the fall
of 1996, and more is scheduled for the spring of 1997. Cornell
University has hired a person to coordinate technology transfer
resulting from this and predecessor projects.
This aspect of the program began with an appropriation of $200,000
in fiscal year 1995; $197,000 was appropriated in fiscal years 1996 and
1997 for a total of $594,000. Four state partners and approximately 18
private partners contribute resources at a ratio of approximately 1.5
to 1 for this project.
The field work is being conducted near Syracuse, New York.
Electronic and print media allows Cornell's technology transfer
activities to extend far beyond that point. The scope of this project
has local, state, regional, national, and international implications.
The completion date for the original objectives of the project, willow
cultivar planting, was September 30, 1996. With the addition of some
new dimensions to the project, the completion date is now April 1,
1998. Because of the timing of one of the awards and some weather-
related problems, not all of the original objectives have been met.
Most of the unmet objectives should be completed by early summer.
Keeping with the Administration's policy of awarding grants
competitively, no further Federal funding is requested for this grant.
This project is reviewed annually through a merit examination of
the annual proposed plans of work. In addition, the Project
Administrator monitors progress through the reading of a series of
required reports, plus frequent phone and e-mail contacts. The Project
Administrator also met with the Principal Investigator in his office to
discuss the project during the investigator's travels to the
Washington, DC, area.
data information system
Question. Please provide a description of system development
activities that have been funded.
Answer. The Cooperative State Research, Education, and Extension
Service--CSREES--is in the process of funding a cooperative agreement
with the University of Arkansas to provide national leadership in
coordinating the efforts of our university partners in helping us
determine appropriate content for a Research, Education, and Economics
Information System--REEIS--wide information system. In addition, the
University of Arkansas will provide essential services in managing and
coordinating a national Steering Committee responsible for overseeing
the overall design, development, testing, and implementation of REEIS.
Similarly, funds have been allocated to employ a technical services
manager and a program analyst to oversee contracting with outside
sources to design and launch REEIS and to comply with the necessary
clearances and regulations applicable to information technology
systems. In addition, funds have been allocated to secure a temporary
director through the Intergovernmental Personnel Act--IPA--to
coordinate and guide the overall aspects of development, testing, and
implementing REEIS. Remaining funds are being allocated for contracting
with a private sector firm to conduct a strategic audit of available
data and a national needs assessment.
Question. What is the national, regional or local need for this
activity?
Answer. USDA's Research, Education, and Economics--REE--mission
agencies and their university partners lack a central, integrated,
user-friendly electronic information system capable of providing a
knowledge base of the thousands of programs and projects for which they
are responsible that focus on food, agriculture, natural resources, and
rural development. Such an information system is increasingly needed to
enable the Department and its partners to readily conduct both
comprehensive baseline and ongoing assessments as well as evaluations
of research, education, extension, and economics programs and projects.
In recent years, this need has become more urgent for several reasons.
First, the United States needs a visionary public funded research and
development program to produce essential knowledge and innovations for
meeting growing competition in a global market--which is largely
attributable to the expanding research and development efforts of
foreign nations. Second, a comprehensive information system is needed
to serve as a primary reference source for development of new research
and education projects on such diverse issues as increasing
productivity in agriculture and processing, improving the safety and
quality of food, and enhancing the sustainability of the environment
and rural communities. Third, Federal/State policy makers and
administrators are requiring empirical analyses to account for
historical, current, and future use of public funds and to provide a
basis for redirecting funds to higher priority problems. Fourth, the
Government Performance and Results Act--GPRA--has imposed reporting
demands which current, decentralized information systems are not
prepared to adequately satisfy.
Question. What was the original goal of this initiative and what
has been accomplished to date?
Answer. The original goal of this initiative was to develop an
information system that can provide real-time tracking of research,
extension and education projects and programs; has the capability to
communicate vertically between field, state and Federal locations; will
enable the REE agencies and their partners to conduct rapid and
comprehensive policy assessments and program evaluation analyses;
facilitates assessment of technologies and practices employed in
extension, education, economics and research activities at the field
and/or regional levels; provides clear and transparent public access to
relevant parts of the information; and provides information management
tools to enhance the timeliness and accuracy of REE-wide responses to
inquiries about program objectives and expenditures.
Question. How long has this work been underway and how much has
been appropriated by fiscal year through fiscal year 1997?
Answer. Congress first appropriated $0.4 million for REEIS in
fiscal year 1997 to begin planning its design and development. We are
in the process of establishing a National Steering Committee to provide
advice and guidance throughout the development and implementation
process. The Steering Committee will be chaired by a notable
administrator of extension and research at a key land-grant university.
It will be comprised of both users and producers of Research,
Education, and Economics agencies' data, including program officials
and program leaders, information system managers from other Federal
agencies, representatives from Federal oversight agencies, program/
project leaders representing partner institutions, and private sector
users of REE data. Ultimately, this body will be responsible for
recommending work specifications and for assessing the quality of work
performed by an experienced and successful private contractor
specializing in public-sector information systems.
Question. What is the source and amount of non-federal funds
provided by fiscal year?
Answer. Non-federal funding does not apply at this time.
Question. Where is this work being carried out?
Answer. Leadership responsibility for REEIS resides within the
Cooperative State Research, Education, and Extension Service's Science
and Education Resources Development division. This provides for
effective integration of the Current Research Information System, the
Food and Agricultural Education Information System, and appropriate
extension data bases. CSREES is working closely with all REE agencies
and with the university system via a cooperative agreement with the
University of Arkansas. We hope also to use the Intergovernmental
Personnel Act to secure an IPA from another university to carry out
REEIS essential management responsibilities. In addition, a process is
underway to engage a private sector firm specializing in public-sector
information systems to design, develop, test, and implement REEIS.
Question. What was the anticipated completion date for the original
objectives of the project? Have those objectives been met? What is the
anticipated completion date of additional or related objectives?
Answer. It is anticipated that REEIS can be operational by the year
2000. The current appropriation of $400,000 will cover start-up costs
such as establishment of a National Steering Committee, preparation and
specifications for contracting with an outside firm, selection of a
contractor, a needs assessment, identification of functional
requirements, a draft plan for designing and developing the system
including recommendations for in-house hardware, operating system, and
software programs. The $600,000 increase request for fiscal year 1998
will allow for implementing, testing, and refining a prototype,
including preparation of an operations manual and a full-scale
implementation and maintenance plan. The Research, Education, and
Economics Information System meets a high priority national need for a
continuing national information system. REEIS is being designed to meet
the data information needs of all REE agencies and their university and
private sector cooperators. It will link data systems on research,
education, extension, and economics. Therefore, annual maintenance
costs will be ongoing.
Question. When was the last agency evaluation of this project?
Provide a summary of the last evaluation conducted.
Answer. An evaluation of Research, Education, and Economics
Information System is not appropriate at this early stage of
development.
travel
Question. Please provide the Committee with a breakdown of your
actual travel costs in fiscal year 1996.
Answer. In fiscal year 1996, the CSREES cost for Domestic travel
was $1,693,795 and the cost for Foreign travel was $44,858.
Question. Please identify foreign travel obligations for fiscal
years 1994, 1995, and estimates for fiscal years 1996 and 1997.
Answer. The information follows.
CSREES foreign travel obligations
Fiscal year
1994.......................................................... $65,054
1995.......................................................... 33,506
1996.......................................................... 44,858
1997 (estimate)............................................... 79,848
Question. How many CSREES personnel were engaged in foreign trips
in these years [fiscal years 1994, 1995, 1996, and 1997] and for what
purposes?
Answer. The information follows.
FOREIGN TRIPS
------------------------------------------------------------------------
No. of
Purposes of foreign trips Fiscal CSREES
year personnel
------------------------------------------------------------------------
External CIP Review--Science Policy Presentation
for NE Division of Agronomy--FAO's Meeting and
IPM--Project development, site visits, and
project reviews of International Programs
projects.--5th World Congress on Genetics Applied
to Livestock Production--40th International
Congress of Meat Science and Technical
Conference--International Society of Animal
Genetics Conference--Meeting of the Society for
Nutrition Education--NC-119 Meeting--NE-103
Meeting--Participate in the North American
Association for Environmental Education and
Manage two auxiliary meetings of Extension
Environmental Education faculty--USDA Water
Quality Project Review........................... 1994 21
U.S. Delegate to International Council of IUFRO-XX
World Congress--Project development, site visits,
and project reviews of International Programs
projects.--Biodiversity Convention--International
Symposium on Nutrition & Health--Presentation on
Agricultural Biotechnology Technology Transfer
and Workshop--CIP Review--Chair Report of CIP
Review--Aquaculture Policies Information
Exchange--CGIAR Meeting--Caribbean Basin
Agricultural Research Meeting--Presenting papers
on Policy Options on Plant Protection and
Pesticides--Horticultural Society Meeting--
Poultry Science Association and Collateral
Meeting--Lead U.S. Delegation and Case Study OECD
Conference--``Patron of Congress'' presenting a
paper--To present invited papers--Regional IPM
Project Meeting.................................. 1995 14
Review of Forestry Programs with Advisory Council
of the Pacific Islands--International Workshop on
Soil and Water Quality at Different Scales--NCR-
59--Soil Organic Matter--Regional Research
Committee--Project development, site visits, and
project reviews of International Programs
projects.--Farm Privatization Project Review--
Scientific Exchange--Joint Meeting--American and
International Evaluators' Association--U.S.
Scientific Exchange Team on Biotech Applications--
Seafood Sciences and Technology Society Meeting--
Kenaf and Allied Fibers UNFAO--World Aquaculture
Society meeting--External Panel, U.S. A.I.D
Funded Pond--ADAP Directors Meeting--Tauile'ile
Center for Tropical Agricultural Research--Ag
CATIE on Horticultural Extension, Research, and
Education--World's Poultry Congress and
Exhibition--3rd Symposium on Industrial Crops and
Products--IPM Project--International Congress of
Meat Science and Technology--Caribbean Food Crops
Society and CBAG Meeting--Paper on American
Evaluation Association--NCR-22 Meeting--NADP/NTN
Meeting--Conduct Workshop on GPRA of 1993--
American Evaluation Association Meeting--Present
selected paper ``The Institutional Evolution of
the Modern Polish Ag System''--Regional IPM
project--National Extension Leadership
Development--NELD--Seminar--Expert Consultation
on Rural Youth Program........................... 1996 22
Global Conference on Sorghum Ergot--ADAP and
Western Regional Joint Meeting--Project
development, site visits, and project reviews of
International Programs projects.--Caribbean Food
Crops Society and Tstar CBAG Meeting--Asian
Center for Livestock Waste Management Meeting--
2nd Symposium on the Epidemiology and Control of
Salmonella in Pork--43rd Congress of Meat Science
and Technology--2nd International Workshop on
Transgenic Animals and Food Production--XV
Panamerican Congress of Veterinarian Science
Meeting--Guest Lecturer Bodles Research Station--
USDA representative to co-convene the South
African Binational Commission--Scientific
Conference for SERD--The International Biotech
Risk Assessment Symposium--American Society of
Plant Physiology--CSREES Administrative and
Financial Review of University of Guam and
American Somoa University--International Congress
of Plant Molecular Biology--Review of the Forest
Science Department of the University of British
Columbia, Canada--Meeting of the Society for
Nutrition Education--Meet with State counterparts
and participate in paper sessions in food safety,
health, and nutrition.--The VII Meeting of
International Grassland Congress--Present paper
at the International Soil Erosion Congress....... 1997 28
------------------------------------------------------------------------
______
Questions Submitted by Senator Bond
fund for rural america
Question. For fiscal year 1997, the Fund for Rural America is
structured in such a way that, in effect, it excludes large, visionary
and ambitious projects such as the National Corn Genome Initiative--
NCGI--from participation. The focus and the funding limits make it
infeasible. I believe that this project is of vital interest to our
efforts to retain our leadership position in agricultural research and
to ensure that our producers have the tools necessary for
environmentally responsible and sustainable agricultural production
into the next century. Some day, someone in some country will develop
this research and I feel strongly that it must be us. If not, we will
likely risk much of the competitive advantage that visionary leaders of
the past have earned for us today.
This project was specifically mentioned in Farm Bill report
language and is precisely the kind of basic science that will be the
basis for us being competitive into the next century. While I
understand that many Fund for Rural America projects may yield early
and visible benefits and are important, we should also have the vision
to provide the tools that will be the key to success in the future.
I have started a dialogue with Dr. Gibbons of the Office of Science
and Technology Policy and Dr. Lane at the National Science Foundation
to see if another agency is willing, better funded or better suited to
take this on.
I understand some modest efforts are underway but we know that an
unfocused, underfunded or piecemeal approach will not do the job.
Does the Department have any intention of reconsidering its
approach to the Fund for Rural America for fiscal year 1998 and fiscal
year 1999 so that a project of this nature could become eligible?
Answer. The Department will evaluate fiscal year 1997 Fund
operations in developing guidelines for fiscal year 1998 and fiscal
year 1999 programs. It is unlikely, given the original mandate provided
for in the 1996 Federal Agriculture Improvement and Reform Act, that
the Fund will shift dramatically in focus to emphasize more fundamental
research. This suggests that to be competitive, projects such as the
National Corn Genome, would need to emphasize outcome-oriented research
projects that include the end user through technology transfer.
This likely continued emphasis on applied research and related
education and extension does not mean that the Fund is unresponsive to
the need to ``retain leadership in agricultural research'' and ``ensure
. . . environmentally responsible and sustainable agriculture
production.'' The Fund was designed to further these goals by combining
the knowledge generated from fundamental research with limited support
for applied activities that lead to faster and hopefully larger payoffs
on research dollars.
USDA has been very active in pursuing ways to increase Federal
support of genomic mapping and sequencing activities including the
sequencing of corn. However, prior to proceeding with a program
designed to map one specific commodity, a number of scientific and
administrative issues must be addressed. USDA has taken the lead in
bringing together the National Science Foundation and the Department of
Energy to discuss how to determine what should be the focus of a genome
program for agriculturally important species. As a result, USDA asked
the National Academy of Science, National Research Council-Board on
Agriculture in collaboration with the Board on Biology to conduct a
discussion of this issue at the April 26th Academy meeting. Over 60
participants, including representatives from universities, private
industry, commodity groups, and Federal agencies, engaged in a daylong
discussion entitled ``Designing an Agricultural Genome Program.'' An
abbreviated draft report of this discussion will be released in May.
Conclusions of the meeting included: (1) Strong support for continued
and increased funding of investigator initiated individual efforts in
genomic research, as is supported currently by the USDA, CSREES,
National Research Initiative Competitive Grants Program--NRI, (2) A
recommendation for the development of a genome program that would
include both broad and more specific objectives of a) 100,000 Expressed
Sequence Tags--EST's--for forty agricultural species--plant, animal,
and microbe--that would provide important base-level genomic
information, and b) a more specific sequencing activity on corn and
sorghum, (3) A recommendation to resolve the proprietary issues of
genomic research prior to proceeding on an extensive publically funded
genomic effort. For example, the entire set of expressed corn genes may
likely be isolated by private industry by the year 2000. Will the
genomic information be in the public domain or will the Federal
government find it necessary to fund the genome effort itself to assure
public access? Because of the proprietary nature of industry efforts in
genome sequencing, USDA is bringing together industry and Federal
agencies to discuss this issue so that duplication of effort can be
minimized. An interagency task force also is being established under
the National Science and Technology Council (NSTC) to develop an
initial plan, with the NRI Chief Scientist serving as chair.
Further science-based discussions of the genome issue will occur at
a June National Academy Colloquium in Irvine, California entitled
``Protecting Our Food Supply: The Value of Plant Genome Initiatives.''
______
Questions Submitted by Senator Bumpers
special research grants
Question. Would you provide me an update on the following CSREES
special grant items: Farm and Rural Business Finance; The Food Safety
Consortium; Forestry (UAM); Global Marketing Support Service; The
Institute for Food Science and Engineering; and Rice Modeling?
Answer. The information for these special research grants follows:
Farm and Rural Business Finance.--This program, which has a fiscal
year 1997 appropriation of $106,000, focuses on three principal areas.
One is the financial management and performance of rural businesses.
The second area includes research on financial markets and credit
institutions serving rural America. The third area addresses the impact
of public policies and programs on the financial health of rural
America. The work is carried out at the University of Illinois and the
University of Arkansas. The program has completed projects on the
financial structure and efficiency of grain farms, risk and financial
implications of coordination in hog production, commercial bank access
to agency market funds through government-sponsored enterprises, and
competitive challenges for bankers in financing agriculture.
The Animal Science Food Safety Consortium.--Research for this grant
program, which has a fiscal year 1997 appropriation of $1,690,000,
focuses on developing detection, prevention, and monitoring techniques
that will reduce or eliminate the presence of food borne pathogens and
toxic substances from the Nation's red meat and poultry supplies. The
consortium is organized and operated along institutional lines with a
coordinator and directors managing the research program. Research is
conducted at the University of Arkansas at Fayetteville, the University
of Arkansas for Medical Science at Little Rock, Arkansas Children's
Hospital, Iowa State University, and Kansas State University.
Researchers under this grant studied Salmonella infection in infants
and children, the application of polmerase chain reaction technology to
detect and differentiate Campylobacter jejuni and the more prevalent
camplobacter coli in pork, and demonstrated under commercial conditions
that electronic identification systems to track and determine
contamination points in beef cattle are feasible from an implant
retention, operational, and retrievability standpoint.
Forestry Research.--Research supported by this grant, which has a
fiscal year 1997 appropriation of $523,000, offers programs of teaching
and research to the landowners of Arkansas and the surrounding region
by the Arkansas Forest Resources Center. The Center includes one of
only three Arc View learning centers for natural resources, and has a
staff well versed in the use of advanced technologies. This research is
being conducted at the School of Forest Resources, the University of
Arkansas at Monticello. Significant progress has been made in several
areas, such as developing intensive fiber farming systems as
alternatives to soybeans for Mississippi farmers, taking the first step
toward biological control of the Southern pine beetle by discovering
the nutrient needs of predators of the beetle so they can be grown and
studied in artificial cultures, and conducting the first survey of
nonindustrial landowners in Arkansas for 15 years. Ongoing projects
include a broad array of topics concerned with best management
practices, ecological characteristics, effects of different management
intensities, and streamside buffer zone effectiveness.
Global Marketing Support Services.--This grant program, which has a
fiscal year 1997 appropriation of $92,000, provides research and
service to agribusinesses. The objective of the university research is
to identify potential foreign markets for Arkansas products and to
conduct and disseminate foreign market assessment evaluation studies to
agribusiness firms. This research is being conducted at the University
of Arkansas in Fayetteville. Some of the recent results include, twelve
``Industry/Company Opportunity Reports'' that provided local businesses
with information about potential export markets; a report on consumer
attitudes in Mexico and Columbia toward imported products; an
evaluation of the food system in China, with emphasis on poultry
sector; two new fact sheets; and additions to an electronic export
information database that is accessed by local firms.
Institute for Food Science and Engineering.--Research for this
grant program has a fiscal year 1997 appropriation of $750,000. As the
flagship center for the Institute for Food Science and Engineering, the
Center for Food Processing and Engineering facilitates and encourages
value-added research and improves the efficiency and effectiveness of
processing agricultural products. This research will be conducted at
the University of Arkansas at Fayetteville. Research demonstrated
promise for a high pressure water spray to remove phomopsis decay and
brown rot tissue from peaches for processing. Progress was also made in
modifying commercially-produced rice hull silicate to create silica
gel. Other research results indicated that holding green and ripe
peaches in elevated carbon dioxide atmosphere could reduce acidity and
decay, possibly allowing fruits to ripen prior to processing without
excessive losses to decay. The Institute also provided information to
new food business entrepreneurs on food regulations, safety, labeling,
ingredients, packaging, and financial aspects of starting a food
business and on market products.
Rice Modeling.--Research for this grant program, which has a fiscal
year 1997 appropriation of $395,000, is used to develop a rice industry
model with domestic and international components to aid U.S. farmers,
millers, and policymakers in making production, investment, marketing,
and public policy decisions. This research is being carried out at the
University of Arkansas, Fayetteville, and the University of Missouri,
Columbia, and is needed to assist both the U.S. rice industry and
national policymakers in assessing the impact of existing and proposed
changes in public policies for rice. This research enables improved
analysis of both international and domestic policy changes on rice
production, stocks, prices of substitute crops and consumption.
federal administration
Question. Would you provide me an update on the Geographic
Information System funded through CSREES Federal Administration?
Answer. This program, which has a fiscal year 1997 appropriation of
$844,000, is designed to transfer evolving geographic information
systems technologies to state and local governments. This technology
includes Internet access for information, databases, and
telecommunication for cooperative system development. This research is
being carried out by the National Center for Resource Innovation
Chesapeake Bay located in Rosslyn, Virginia, with regional centers in
Georgia, Arkansas, Wisconsin, North Dakota, and Washington. This
project has provided the impetus and linkages to facilitate planning
work done in South Georgia with some assistance given to local tax
assessment and parcel identification by a Department of Commerce-
sponsored Economic Development Authority. The Chesapeake project has
linked seven state conservation entities in an effort to develop better
watershed models and decision support systems. The Arkansas portion of
the project has focused on training to educate county employees with
regard to the technology of geographic information systems and
geographic positioning systems. The Wisconsin portion has continued to
simultaneously support the high technology end of the evolution of new
tools and seek new ways to implement change while measuring the impact
of such implementation. The work in North Dakota has continued to focus
on geographically-referenced real time weather information for payments
and others. The efforts in Washington have provided training for a
number of state personnel and others from various levels and
institutions on how to utilize geographic information systems.
extension programs
Question. Would you provide me an update on the following CSREES
Extension items: Beef Producers Improvement (Arkansas), and Delta
Teachers Academy?
Answer. The information on these Extension programs follows:
Beef Producers Improvement, Arkansas.--The Arkansas Beef
Improvement Program, which has a fiscal year 1997 appropriation of
$197,000, utilizes beef cattle farms to demonstrate cost-effective
management practices. This project addresses primarily local needs by
setting goals, evaluating resources, and selecting the management
practices that will help the cattle producer achieve those goals ink
the decisionmaking process. This work is being carried out at ten
Arkansas demonstration farms, one in each of ten counties, to reflect
the different types of cattle operations and cattle producers in the
area. Research to date include the establishment of demonstration
farms, collection of benchmark data, including soil tests, production
information, forage analyses and budgets, and renovation of pastures to
increase grazing capacity.
Delta Teachers Academy.--The Delta Teachers Academy, which has a
fiscal year 1997 appropriation of $3,850,000, provides approximately
645 teachers at 40 sites throughout the seven Lower Mississippi Delta
states with development opportunities by teaming them with university
scholars in on-site sessions and residential summer institutes. The
Delta Teachers Academy is coordinated out of The National Faculty's
Southern Region office in New Orleans, Louisiana. The project is being
conducted at 40 sites selected from within the seven-state Lower
Mississippi Delta region including the states of Arkansas, Kentucky,
Illinois, Louisiana, Mississippi, Missouri, and Tennessee. The Academy
project has focused on the core subjects of English, geography,
history, mathematics, and science. Humanities, language arts, social
studies, reading, civics, and interdisciplinary subjects are also
covered by some sites. The Delta Teachers Academy began offering
educational development activities for 100 teachers from approximately
50 rural districts at 10 sites. Training has now been expanded to
include 645 teachers at 40 sites across the entire seven-state region.
The project has improved teacher recruitment and retention in the
region.
______
Questions Submitted by Senator Leahy
integrated pest management
Question. How much funding is the Department directing towards
Integrated Pest Management and environmentally friendly techniques?
What is the status of the USDA's goal to have 75 percent of U.S.
agriculture using IPM? What research activities are being undertaken to
help farmers reach this goal? What research activities are USDA
undertaking to develop alternatives to comply with the Food Quality
Protection Act?
Answer. The President's budget for fiscal year 1997 includes $34.9
million for the Department's IPM Initiative and an additional $119.5
million for the broad category of ``IPM and Biocontrol.''
The Department's National Agricultural Statistics Service is
currently conducting national surveys of major field crops and selected
fruits and vegetables to measure levels of IPM adoption. Much more work
is needed to refine and implement a sound measurement methodology.
Since the ERS report was published in 1994, additional studies have
been completed by Department analysts and outside experts, and most
support ERS' conclusion that 50 percent or more of the nation's crop
acreage is currently managed under a ``low'' level of IPM but this
varies significantly by crop and part of the country. Several analyses,
including the one published by Consumers Union in ``Pest Management at
the Crossroads,'' have concluded that considerable more work is needed
to help producers move along the IPM continuum to the ``medium'' and
``high'' levels. We believe that an accelerated effort is needed, and
warranted, to help growers reduce reliance on high-risk pesticides and
enhance the sustainability of farm operations.
The IPM programs supported and conducted by the Department and its
land-grant university partners develop and deliver solutions to the
pest management problems faced by our Nation's farmers and urban
residents. These programs incorporate fundamental knowledge of pest
biology into education and training programs for farmers and other pest
managers. In many cases, land-grant university scientists use the basic
or fundamental knowledge generated by Agricultural Research Service
scientists or through support from the National Research Initiative as
the basis for further applied research, research validation trials, and
finally disseminate this information to agricultural producers through
Cooperative Extension. The Department's IPM programs are designed to
develop and help farmers and other pest managers implement new pest
management approaches to critical pest problems, increase profitability
and protect the environment. The Agricultural Research Service's
Areawide IPM Program is demonstrating the effectiveness of new
technologies over large areas. Areawide projects are participatory
programs that blend ARS resources and expertise with those of CSREES
and its land-grant university partners to get IPM methods widely
implemented in a production region. The Regional Integrated Pest
Management Grants Program provides a science basis for the development
of alternative approaches for managing pests including insects, mites,
weeds, plant pathogens, and ectoparasites. Research supported by this
program includes the development of individual pest control tactics and
the integration of multiple tactics into an IPM system. The Pest
Management Alternatives Program is designed to develop alternative pest
management tactics to replace those lost through EPA cancellation or
voluntary withdrawal. Research supported by this program develops new
and environmentally-friendly tactics for the highest priority needs.
The Department's IPM research programs will play a critical role in
developing pest management alternatives that comply with the ``Food
Quality Protection Act of 1996.'' A special program addressing Food
Quality Protection Act Issues will address pest management on food and
feed crops impacted by implementation of the Food Quality Protection
Act. USDA and EPA will support projects that result in: 1) a better
understanding of how these pesticides are used, how important each
particular use pattern is and the attributes and constraints of
existing alternatives and/or how a significant reduction of risk to
human health or the environment that would result from replacement or
mitigation technologies; 2) identification of situations where no
current viable alternatives exist and documentation of evidence of
significant potential losses; 3) significant producer involvement; 4)
natural controls as partial or effective solutions to pest management
problems; and 5) solutions capable of being rapidly brought to bear on
critical problems. The goal of this program is to develop or identify
alternatives for critical needs to insure that crop food producers have
reliable methods of managing pest problems.
______
Questions Submitted by Representative Fazio
pm-10 research
Question. The subcommittee approved $873,000 for fiscal year 1997
through the CSREES budget for PM-10--research about particulate matter
and air quality that is critical both to California and the rest of the
nation. The need in our state is great but, unfortunately, this
research money is currently being split between California and
Washington State. Describe the nature of research going on at the
institutions in both states and any other states under this research
program, tell us how they complement one another, and what your
proposal in the fiscal year 1998 budget is in this area?
Answer. As directed by Congress in establishing the PM-10,
California and Washington special grant, the funding from CSREES is
divided equally between the two states. Research both by the University
of California at Davis, and Washington State University address serious
public concerns related to particulate emissions and resulting effects
on air quality and potential effects on human health. The overall
objectives of both the California and Washington program is to
determine the role of agricultural land and production and management
practices as sources and causes of particulate emissions, and to
develop alternative or improved practices to reduce these emissions.
Because of quite different climatic and soils conditions and types of
cropping systems and management practices, some specific research
objectives differ quite distinctly between the two states' programs.
However, a number of significant collaborative projects are being
jointly conducted by California and Washington on PM-10 air quality
problems that are critical to both states, and to other Western states.
The PM-10 research in California is centered around the intensive
production of cotton, grain crops, and fruit and nut crops, such as
almonds, figs, and other high-value crops. Production of these crops
requires intensive tillage, cultivation, and harvesting operations
which can create potential problems for dust or particulate emissions.
Research by scientists at the University of California at Davis is
developing sampling and monitoring programs to determine the source and
extent of PM-10 particulates in these agricultural production areas,
and are collaborating with Washington scientists on developing unique
biological ``fingerprinting'' techniques to more precisely pinpoint the
sources of origin. In addition, the California research is developing
knowledge on the PM-10 emission-potential of various field crop
operations to be used as a basis for developing new control methods for
PM-10 emissions from California agriculture. In addition, the data from
these studies have already been incorporated into San Joaquin Valley
air authority implementation plans. Two computer models, CALMET and
CALGRIO, developed by California scientists for urban air quality
assessment, will be extended for region-wide assessment and planning of
agricultural impacts on air quality in both California and Washington.
In Washington, the production of the major crops of dryland wheat
and grain in low rainfall areas requires the extensive use of crop-
fallow rotations to conserve soil moisture. This results in leaving
large acreages of soils with no crop cover, with potential for periodic
severe wind erosion and severe air pollution problems. Other PM-10
particulate emission problems are related to the practice of crop
residue burning in grass seed production fields to control pests and
permit efficient operation of planting equipment. Research by
Washington State University and USDA scientists is developing new data
on the sources of PM-10 emissions during wind events, and the sources
of such emissions as a basis for effective and economic control
practices, These studies include work with turners and scientists in
Oregon and Idaho on alternative conservation or no-tillage cropping
systems to increase water intake and reduce soil loss by wind, and to
conserve crop or vegetative residue cover on soils susceptible to wind
erosion. Washington scientists are also finalizing a wind erosion and
dust emission prediction model adapted to the western U.S. This
prediction tool along with a new Manual of Best Management Practices
for reduction and control of PM-10 emissions is expected to be
incorporated into recommended air authority state implementation plans
in Washington, and subsequently in most other western states.
The PM-10 research in both California and Washington includes
strong collaboration between federal and state scientists in other
states with similar PM-10 concerns, and with other ongoing research
that is complementary. For example, both states have cooperative wind
erosion and PM-10 emissions research underway using specialized field
dust samplers and laboratory wind tunnels, with federal and state
scientists in Texas and Kansas who have extensive experience and
laboratory.
Question. Do you intend to keep or alter the state distribution in
the future--what would make you consider doing so?
Answer. The research in both California and Washington is providing
information that may prevent agricultural losses and protect human
health. However, in keeping with the Administration's policy of
awarding research grants competitively, no other federal funding for
this program as currently positioned is requested. Research could be
continued at the state's discretion using formula funds, or the
principal investigators could apply for the competitive grants program
under the National Research Initiative.
pest containment and quarantine facility
Question. I was impressed by the emphasis in each of the
testimonies by Undersecretary Woteki, Dr. Knipling, and Dr. Robinson
about the fight against pests and the fight for integrated pest
management and for food safety. The continuing emphasis on these
technologies, bioengineered pest-resistant plants, and monitoring
pesticide levels under the Food Quality Protection Act will have
increasing importance in the years to come.
Those missions just happen to dovetail with the mission of the Pest
Containment and Quarantine Facility at UC-Riverside and UC-Davis. We
need about $7 million to complete the federal share for this project.
Although USDA traditionally does not request funds for these CSREES
projects, I think you are aware of the value of this facility for
exactly the priorities you have laid out in your testimony. Perhaps you
could outline for the committee just how a facility like Riverside/
Davis facility can complement some of the missions you have emphasized
today.
Answer. Plant pest management, including pests such as insects,
nematodes, bacteria, fungi, viruses and weeds, is in a state of
transition. Traditional pest control strategies based on use of
synthetic chemical pesticides are being phased out. This is due to
several factors including: pest populations that have developed
resistance to chemical pesticides; public pressure to avoid pesticide
contamination of food and the environment; discovery that some
pesticides thought to be safe may in fact be carcinogenic; and high
costs of multiple pesticide applications. The most attractive
alternative to synthetic chemicals is biological pest control. This
strategy includes use of parasites; microorganisms; predators; and
genetically-engineered insects, microorganisms, or resistant plants.
Sophisticated biological pest control methods are made possible by the
development in recent years of recombinant DNA technology, which allows
cloning of genes and stable insertion of such genes into the insects or
microorganisms. To assay the efficacy of exotic or genetically-
engineered bio-control agents, quarantine and physical containment
facilities may be needed to insure safety before field releases are
made.
Question. How would USDA accomplish some of these missions without
this facility--I understand that the containment level offered by the
proposed Davis facility for this type research is available at very few
installations throughout the U.S.?
Answer. Currently, there are a limited number of facilities with
Biosafety level 3 capability available for biological control
experimentation with recombinant germplasm and with exotic pests that
can be used to undertake this research. The facilities at the
University of California-Davis and the University of California-
Riverside could significantly accelerate the efforts to develop new,
innovative, and environmentally-compatible pest control technologies.
Subcommittee Recess
Senator Cochran. This concludes today's hearing. Our next
hearing will be on Thursday, May 1, at 10 a.m., in room 124 of
the Dirksen Senate Office Building. At that time we will hear
from witnesses on the budget request for the Commodity Futures
Trading Commission and the Food and Drug Administration. Until
then, the subcommittee stands in recess.
[Whereupon, at 12 noon, Tuesday, April 22, the subcommittee
was recessed, to reconvene at 10:08 a.m., Thursday, May 1.]
AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR
FISCAL YEAR 1998
----------
THURSDAY, MAY 1, 1997
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:08 a.m., in room SD-124, Dirksen
Senate Office Building, Hon. Thad Cochran (chairman) presiding.
Present: Senators Cochran and Bumpers.
COMMODITY FUTURES TRADING COMMISSION
STATEMENT OF BROOKSLEY BORN, CHAIRPERSON
ACCOMPANIED BY MADGE BOLINGER, DIRECTOR, OFFICE OF FINANCIAL MANAGEMENT
Opening Remarks
Senator Cochran. The subcommittee will please come to
order. Today we continue our hearings on the fiscal year 1998
budget submitted by the President. This morning we will
consider the budget request for the Commodity Futures Trading
Commission and the Food and Drug Administration. We are pleased
to welcome the Chairman of the Commodity Futures Trading
Commission, Brooksley Born. We invite you to come sit at the
witness table with your assistant.
We will put your entire statement, which we have, in the
record. We thank you for that and we encourage you to make any
summary comments or remarks that you think would be helpful to
the committee in understanding the budget request. Then we will
have an opportunity to discuss the issues raised or ask
questions.
You may proceed.
Statement of Brooksley Born
Ms. Born. Thank you very much, Mr. Chairman.
The Commodity Futures Trading Commission very much
appreciates this opportunity to discuss the President's fiscal
year 1998 budget request for the Commission. With me today is
Madge Bolinger, who is the Director of the Commission's Office
of Financial Management.
The CFTC is a small agency with an important mission. It
oversees the Nation's 11 futures and option exchanges and
supervises 64,000 commodity professionals who trade on the
floor of these exchanges or represent customers. These markets
are growing rapidly, having more than doubled in trading volume
during the past decade.
The President's fiscal year 1998 budget request for the
Commission is $60,101,000, with a staffing level of 600. This
request represents an increase of $5 million and 20 staff
persons over the fiscal year 1997 appropriation. About $4
million of the request is required for the Commission to
sustain its current level of services; $1 million is to fund
the requested 20 additional staff-years.
The Commission's tasks are to ensure the integrity of the
U.S. futures and option markets, protect customers from fraud
and other trading abuses, monitor the markets to detect and
prevent price distortion and manipulation, and maintain the
competitive strength of the Nation's exchanges.
The requested increase will be used to continue enhancement
of the Commission's enforcement and surveillance programs and
slightly to expand the Commission's industry oversight
function. Approximately 75 percent of the requested dollar
increase above the current level of services will be dedicated
to enforcement efforts to increase our investigative
activities, litigation support, and cooperative law enforcement
efforts. The Commission's goal is to send a strong message that
fraudulent activity and other violations of the Commodity
Exchange Act will be promptly and thoroughly investigated and
proceeded against vigorously.
The increase will also enhance the ability of the
Commission to use its new integrated market surveillance
system, which will assist Commission staff in monitoring
systemic risk in the marketplace. This increase will also
provide the resources to sustain the necessary level of
oversight over the compliance programs of the Nation's futures
and option exchanges and the National Futures Association.
The increase in funding and staffing is well justified and
will benefit agricultural producers and processors, financial
services firms, energy concerns, and many other sectors of the
economy that depend on the important price-discovery and risk-
shifting functions of the futures and option markets.
The Commission remains committed to the elimination of
unnecessary regulatory burdens and is currently reviewing and
amending its regulations to streamline them as appropriate in
light of the Commission's mandate to protect the public
interest.
The Commission is also committed to working with Congress
to improve and update the Commodity Exchange Act through
legislative amendments. Bills to amend the act have been
introduced in Congress which would result in the pervasive
deregulation of our futures and option markets and thus would
pose grave dangers to the public interest. Our current
regulatory system has allowed our futures markets to become the
strongest and most respected in the world by convincing market
participants from around the world that they are safe, fair,
and transparent.
The Commission is strongly opposed to the provisions of the
bills which would eliminate Government regulation of much of
our exchange trading in futures and options and would leave
those who use and rely on the integrity of our markets exposed
and unprotected. Even if those provisions were enacted, the
Commission's funding needs for fiscal year 1998 would not
decrease.
The Commission recognizes that this subcommittee faces
difficult appropriations decisions this year. Nonetheless, we
believe that the increase that the President has requested for
fiscal year 1998 is essential for the Commission to fulfill its
congressional mandate and to keep pace with a growing, complex,
and dynamic marketplace.
Thank you very much, Mr. Chairman. I would be happy to
answer any questions that you or other members of the
subcommittee may have.
Prepared Statement
Senator Cochran. Thank you very much, Ms. Born. We have
your complete statement and it will be made part of the record.
[The statement follows:]
Prepared Statement of Brooksley Born
Mr. Chairman and Members of the Subcommittee: I appreciate the
opportunity to discuss with you the President's fiscal year 1998 budget
request for the Commodity Futures Trading Commission (``CFTC'' or
``Commission'').
cftc's budget request
As you know, the President's fiscal year 1998 budget request for
the Commission is $60,101,000, with a staffing level of 600. This
request represents an increase of $5 million over the fiscal year 1997
appropriation. Approximately $4 million of that request is required for
the Commission to sustain its current services level, and $1 million is
to fund the requested 20 additional staff years.
The Commission recognizes that this Subcommittee and Congress face
difficult fiscal decisions this year. Nonetheless, we believe that the
increase the President has requested for fiscal 1998 is not only
justified but essential if the Commission is to continue to strengthen
its enforcement and market surveillance programs as well as to carry
out its other statutory responsibilities fully and effectively.
overview of funding levels and operational effects
The Commission enforces the requirements of the Commodity Exchange
Act (``Act'' or ``CEA''). It is responsible for ensuring the integrity
of the U.S. futures and option markets, protecting customers from fraud
and other trading abuses, monitoring the markets to detect and to
prevent price distortions and manipulation, and maintaining the
competitive strength of the nation's exchanges. We continue to work to
protect the vital economic functions of hedging and price discovery
performed by our futures and option exchanges. Prices established by
domestic futures exchanges affect what we pay at the grocery store, the
service station, and copper plumbing and our lumber. Similarly, prices
on the exchanges assist producers and processors in obtaining fair
prices for their commodities.
The Commission oversees 64,000 commodity professionals who trade on
the floor of the exchanges or represent customers. Our goal is to
ensure that these firms and individuals meet standards of fitness and
maintain financial integrity, use proper sales practices and provide
adequate risk disclosures to their customers.
These responsibilities have become more challenging in the face of
dramatic market growth and innovation. Examples of this growth and the
great expansion of the Commission's oversight and regulatory
responsibility include the following:
Increased exchange trading volume.--The CFTC supervises all trading
of futures and option contracts on eleven U.S. futures exchanges. The
commodity futures and option markets have experienced and continue to
experience dramatic growth. They have expanded from agricultural
markets to markets in futures and options on financial instruments,
such as interest rates, stock indices and foreign currencies, and
commodities of global significance , such as energy and metals.
Exchange futures and option trading has more than doubled in the last
decade (from 216 million to 495 million contracts)--an increase of 131
percent. This growth is expected to continue with a volume of 562
million contracts projected for 1998 (an increase of 160 percent over
1986). CFTC's programs have encouraged this healthy growth by assuring
market participants around the world that our markets are safe, fair
and transparent.
Growth of over-the-counter derivatives.--The CFTC, along with other
financial regulators, exercises general oversight of the rapidly
growing and evolving over-the-counter market in derivative instruments.
It has responsibility to address fraud and manipulation in significant
portions of that market. The CFTC also works with the international
regulatory community to address disclosure and market integrity issues
in the market. This enormous market, currently estimated to be in
excess of $50 trillion world-wide, has developed in the past decade.
Growing managed funds.--The CFTC regulates commodity pool operators
and commodity trading advisors. Funds committed to professional
management for futures trading have grown exponentially, from $115
million in 1975 to over $25 billion today, not counting hedge funds
also registered as commodity pools. This area of financial investment
includes a growing number of pension and mutual funds. The Commission
has worked with industry groups and other regulators to improve and to
simplify disclosure requirements which allow customers to make informed
investment decisions.
Rapid innovation.--The CFTC approves all contracts traded on
futures and option exchanges and all rules of such exchanges and the
National Futures Association. Since 1986, the CFTC has approved over
400 new contracts for trading on exchanges. Many of these new,
innovative contracts have brought new market users within CEA
protection for the first time. The CFTC has worked closely with both
the exchanges and industry representatives to make certain new
contracts will create hedging opportunities and enhance price discovery
and price basing of the underlying commodities.
Expanded Congressionally mandated responsibilities.--The CFTC's
authority and responsibilities have grown substantially since the
Commission was created in 1975. After three years of intense
Congressional scrutiny, Congress passed the Futures Trading Practices
Act of 1992 giving the CFTC a number of new responsibilities to ensure
market integrity. Ongoing activities include enforcing the heightened
audit trail standards for exchanges and improving the CFTC's oversight
and enforcement programs. In 1995 Congress reaffirmed these obligations
by adopting a reauthorization of the Commission, which authorized
appropriations through fiscal year 2000.
Growing internationalization of the markets.--Financial and
commodities markets are becoming increasingly global, further
increasing the complexity of the CFTC's oversight responsibilities. The
agency must respond promptly and effectively to international
developments, such as the collapse of Barings Plc. and the issues
surrounding Sumitomo Corporation's copper trading. The agency has
ongoing responsibilities to ensure that its regulatory framework is
capable of responding to the domestic implications of problems arising
anywhere in the world. It has become a leader in encouraging
international cooperation and improvement of regulation abroad.
Technology developments.--The exchanges, commodity professionals
and users of the markets are turning to newly developed technology to
cope with the huge growth in this industry. Likewise, the CFTC has had
to augment its staff as well as its hardware and software to keep pace
with the growth in the markets. Technology also presents some
increasing regulatory challenges to the CFTC, including the need to
police futures and option trading advice and sales offered illegally
via the Internet.
cftc resources
Despite its increasing responsibilities, the CFTC's budget remained
essentially flat from fiscal year 1992 through fiscal year 1994.
Consequently, the Commission reduced personnel, substantially cut non-
staffing expenses, and delegated additional duties to self-regulatory
organizations. The CFTC also deferred computer upgrades and systems
development for important market surveillance and other activities. In
short, the Commission and its staff were stretched very thin, and it
became extremely difficult to provide the oversight and enforcement
presence on which market users and the economy at large depend.
Over the past three years, the Administration and Congress have
recognized the need for a stronger CFTC and have provided for an
increase in staffing, particularly in enforcement personnel. The
budgetary support of the agency in recent years has reflected the
recognition of the critical need to supervise the futures and option
markets effectively and to enforce the laws against fraud and
manipulation in those markets.
In fiscal year 1998, the requested increase will be used to
continue enhancing the Commission's enforcement and surveillance
programs and slightly to expand its industry oversight activities.
Approximately 75 percent of the program increase will be dedicated to
enforcement activities to increase its investigative activities,
litigation support and cooperative law enforcement efforts.
Additional funding will also allow the Commission to continue the
efforts started in fiscal year 1996 to redesign and implement an
integrated market surveillance system which will assist Commission
staff in monitoring systemic risks in the marketplace. One of the major
enhancements of the system will be the ability to obtain and analyze
daily option large trader data along with daily futures large trader
data. Currently, we receive futures large trader data daily, but
options data is only available on a weekly basis. The system will
reduce the overall reporting burden of certain commodity professionals,
who will report large trader data only to the CFTC rather than to
multiple exchanges.
This increase will also provide the resources to sustain the
necessary level of oversight over the compliance programs of the
futures and option exchanges and the National Futures Association.
The President's fiscal year 1998 budget request will increase the
Commission's staffing level by about 3 percent. This slight increase
would restore some of the erosion in staffing in the early 1990's and
would put the CFTC at an authorized staffing level 3 percent lower than
its fiscal year 1992 authorized staffing level.
The requested increase in funding and staffing is well justified
and will benefit agricultural producers and processors, financial
services firms, energy concerns and many other sectors of the economy
that depend on the price discovery and risk-shifting functions of
futures and option markets.
highlights of fiscal year 1996
enforcement
As mentioned earlier, the majority of the budgetary increases that
the Commission has received since fiscal year 1995 have been for the
enforcement program. In fiscal year 1995, the Commission began
restructuring and enhancing its Division of Enforcement, and that
effort continues today. A strong, effective enforcement program is one
of the Commission's top priorities. Our goal is to send a strong
message that fraudulent activity and other violations of the CEA will
be promptly and thoroughly investigated and proceeded against
vigorously. As a result of the Commission's civil injunctive actions in
fiscal year 1996, approximately $6.4 million in customer funds and
other assets were placed under the protection of receivership.
Case Highlights
During fiscal year 1996, resources were devoted to significant
cases which not only addressed the specific wrongdoing alleged in a
particular complaint, but also communicated to the public the
Commission's concern with a specific area or highlighted the
Commission's view regarding the significance of acts and practices that
have the potential to cause significant harm to markets, customers, and
market participants. Those cases include the following:
--The filing and simultaneous settlement of an administrative action
against Deloitte & Touche and one of its former partners. The
Commission's order found that the partner failed to conduct an
audit of a futures commission merchant (``FCM'') in accordance
with generally accepted auditing standards and failed to
investigate properly and to report on material inadequacies in
the FCM's internal controls. Deloitte was held liable for the
partner's violations. Deloitte agreed to pay a $100,000 civil
penalty and to comply with certain undertakings. The partner
agreed to the entry of a cease and desist order and a
Commission censure. In re Deloitte & Touche, CFTC Docket No.
96-10 (filed September 26, 1996).
--The filing and simultaneous settlement of an administrative action
against Fenchurch Capital Management, Ltd. The Commission's
order found that Fenchurch attempted to manipulate and did
manipulate the value of its position in ten-year U.S. Treasury
note futures contracts by cornering the available supply of the
cheapest-to-deliver notes. According to the Commission's order,
Fenchurch increased its position in the issue through a series
of repurchase transactions at a time when the notes were in
tight supply. Fenchurch exacerbated the tightness in the supply
of the cheapest-to-deliver notes by increasing its position and
intentionally withholding the notes from the market.
Fenchurch's conduct took place after expiration of trading on
the futures contract, while those holding short positions in
the market were preparing to make delivery. The Commission's
action and its underlying investigation were coordinated with
the Securities and Exchange Commission (``SEC'') and the
Chicago Board of Trade (``CBT''), both of which filed related
charges. The Federal Reserve Bank of New York also assisted the
Division in its investigation. In settling the CFTC's action,
Fenchurch consented to the entry of a cease and desist order
and to various undertakings related to its Treasury market
trading. Fenchurch also agreed to conduct a review of its
policies and procedures and, if necessary, to formulate and to
implement reforms of those policies and procedures. Fenchurch
agreed to pay a civil monetary penalty of $600,000, which also
satisfied Fenchurch's obligations under the SEC's consent order
of permanent injunction. In re Fenchurch Capital Management,
Ltd. [Current Transfer Binder] Comm. Fut. L. Rep. (CCH) para.
26,747 (CFTC July 10, 1996).
Also, resources were devoted to enhance a ``quick strike''
enforcement response capability. This effort has resulted in
instituting injunctive actions within weeks, or even days, of
discovering suspected illegal activity. To date, examples of notable
cases brought by the Commission using this new capability include the
following:
--The filing of an injunctive complaint against Donald Chancey and a
firm controlled by him alleging violations of the anti-fraud
and registration provisions of the CEA and Commission
regulations in connection with an unregistered commodity pool
operator. According to the complaint, the defendants solicited
individuals to invest in a pool by making misrepresentations
that the funds would be invested in silver futures and that the
past trading of the pool had been profitable. The complaint
alleges that the defendants placed few actual trades and that
those resulted in losses. The defendants allegedly used some of
the funds solicited to pay purported interest to certain
earlier investors and converted the majority of the funds to
their own use. The day the complaint was filed, the federal
district court entered an ex parte order freezing the
defendants' assets and protecting and granting the Commission
access to books and records. The court also appointed a
temporary equity receiver. The Division used the Internet to
inform the public about this enforcement action and to solicit
information concerning the whereabouts of Chancey, who
disappeared before the Commission filed its action against him.
The Division posted a picture of the defendant on its home page
and later posted notices publicizing the court sanctioned
auction of the defendants' property. CFTC v. Donald B. Chancey,
et al. No. 7:96-CV-61 (M.D. Ga. filed July 1, 1996).
--An injunctive action filed against Ken Willey. Willey allegedly
defrauded pool participants by distributing account statements
which misrepresented the changes in net asset value and income
and loss realized by individual participants. According to the
complaint, the defendant illegally received investor funds in a
name other than that of a commodity pool and commingled pool
property with assets of other persons. The day the complaint
was filed, the federal district court entered a consent order
of preliminary injunction freezing Willey's assets, protecting
and granting Commission access to books and records, and
enjoining future violations of the nature alleged.
Subsequently, the court entered an order finding Willey in
contempt and ordering him jailed until he complied with the
preliminary injunction. After six months of incarceration,
Willey was released from jail without ever complying with the
order to produce books and records. In the interim a receiver
was appointed, and a motion for summary judgment was filed by
the Commission on all counts except fraud. The Commission is
awaiting the outcome of the summary judgment motion and a
distribution of assets to investors by the receiver. CFTC v.
Ken Willey, Civ. No. 96-0200 (E.D. Wash. filed April 19, 1996).
fraud in foreign currency futures and options
An important part of the Commission's Enforcement program in recent
years has focused on the fraudulent off-exchange sales of foreign
currency futures and option contracts to the public. These cases
typically involve boiler room operations that seek to lure in the
vulnerable through high-pressure sales tactics and false promises of
quick riches. In recent years, we have seen a rise in cases of
``affinity fraud,'' in which members of particular ethnic or religious
groups are targeted as victims of the fraudulent activity.
The Commission has brought 19 cases involving the illegal sale of
foreign currency futures or option contracts to the general public
since 1990. In those cases, more than 3,200 customers invested over
$250 million in foreign currency schemes, much of which was lost.
One of these cases, Dunn v. CFTC, U.S. (1997), rev'g 58 F.3d 50 (2d
Cir. 1995), was decided by the Supreme Court in February of this year.
In that case the Commission alleged that the defendants had solicited
and accepted funds from approximately 400 customers and that Dunn had
informed customers that they had suffered losses of at least $95
million at the time the defendants ceased operations. The Supreme Court
decided the narrow issue of whether futures and options are treated the
same under the so-called Treasury Amendment, which exempts from the CEA
some transactions in foreign currencies that would otherwise be covered
by the CFTC's jurisdiction. The Court concluded that options are
treated in the same manner as futures under the Treasury Amendment.
Our enforcement experience demonstrates that fraud of the retail
public is rampant in this area and will require a strong enforcement
presence for the foreseeable future. The Commission strongly believes
that, whether through judicial interpretation of the existing statutory
provisions or through the legislative initiatives now pending before
both Houses of Congress, its authority vigorously to pursue the
investigation and prosecution of foreign currency futures and option
scams targeted at public customers should be affirmed.
exchange contract designation
In fiscal year 1996, the Commission approved 92 new futures and
option contracts--an approval rate of one every 2.7 work days. Many of
the innovative new contracts approved by the Commission were designed
to meet specialized hedging needs of firms in the agricultural sector.
For example, the Commission approved five CBT corn yield insurance
futures contracts based on the states of Illinois, Indiana, Nebraska
and Ohio as well as the U.S. as a whole. These contracts were designed
to provide a vehicle for crop insurance companies and other commercial
and agricultural entities to hedge financial risk related to
fluctuations in the yields of corn.
Early in fiscal year 1997, the Commission proposed rules for new
``fast-track'' procedures for processing exchanges' contract
designation applications and rule changes. Those rules were adopted by
the Commission on February 27, 1997. Under the rules, certain contract
applications may be approved within 10 days following receipt by the
Commission, while other contracts may be approved within 45 days. Most
exchange rules will go into effect within 10 days after they are filed
with the Commission.
hedge-to-arrive contracts
Recently, a number of agricultural producers have used various
grain contracts referred to as hedge-to-arrive (``HTA'') contracts.
High grain prices experienced in fiscal year 1996 and the ``rolling
forward'' of these contracts created financial strains on some grain
elevators and producers. As a result, on May 15, 1996, the Commission's
Division of Economic Analysis released statements of policy and
guidance regarding HTA contracts. In the first statement the Division
stated that it would not base a determination of the legality of any
such contracts existing as of May 15, 1996, under the forward contract
exclusion of the CEA solely on the fact that the parties entered into a
subsequent agreement to use cash payments to unwind these contracts.
The second statement provided guidance regarding the risk implications
of particular features of these contracts. On November 13, 1996, the
Commission filed three administrative complaints involving HTA
contracts, which are currently pending before the CFTC's administrative
law judges.
market oversight
The CFTC's mandate requires it to oversee the activities of futures
and option exchanges, the National Futures Association (``NFA''), an
industry self-regulatory organization, and commodity professionals.
These oversight activities are designed to protect customer funds, to
prevent trading and sales practice abuses, and to ensure the financial
integrity of regulated firms. The CFTC's ongoing oversight activities
include the following: financial and sales practice audits; rule
enforcement reviews; trade practice investigations; review of margin,
clearance and settlement rules; and activities ensuring that firms
carrying customer funds are adequately capitalized and have properly
segregated customer funds from firm funds.
exchange audit trail standards
The Commission has devoted considerable effort to encouraging
compliance with the enhanced exchange audit trail standards that became
effective in October 1995 for high volume exchanges. The enhanced audit
trail standards, which were mandated by the Futures Trading Practices
Act of 1992, require these exchanges to demonstrate that their trade
records are unalterable, continuous, independently timed, and properly
sequenced to the extent practicable. In late 1994 and early 1995, the
Commission tested each high volume exchange's audit trail system and
provided recommendations for system improvements. The exchanges were
informed that adoption of the recommendations would place them within a
``safe harbor'' for good faith efforts to comply with the enhanced
standard. Two of the four exchanges tested adopted all of the
recommendations, and the Commission determined that they are in the
safe harbor. In fiscal year 1996, the Commission staff re-tested the
audit trail systems of the other two exchanges, the Chicago Mercantile
Exchange (CME) and the CBT, to determine whether they were in
compliance with the heightened standards.
On August 12, 1996, the Commission issued a report which addressed
exchange compliance with the heightened audit trail standards. The
report outlines further steps to be taken by the exchanges and the
Commission to assure future compliance and to address pending exchange
dual trading petitions. The Commission has been proceeding with the
plan set forth in the report to address those petitions.
The Commission has recently re-tested the Comex Division of the New
York Mercantile Exchange and is currently testing the New York Cotton
Exchange (NYCE). NYCE recently qualified as a large-volume exchange
subject to the heightened audit trail standards under the Act.
the close of cbt's march wheat futures contract
On March 20, 1996, in the final few minutes of trading on the CBT
March 1996 wheat futures contract, the price rose an unprecedented
$2.30 per bushel to $7.50. Regulatory reviews of the March wheat
expiration were conducted by CFTC and CBT staff, which reviewed records
and conducted interviews to determine whether the CBT properly enforced
its rules and whether any violations of the CEA may have occurred. On
November 26 1996, the Commission made public a staff report which
included a detailed analysis of the matter. Based on the report, the
Commission instituted a review of the adequacy of six disciplinary
actions initiated and settled by the CBT and made a number of
recommendations to the CBT to improve its procedures which is still
ongoing.
chicago board of trade delivery points
On December 18, 1996, the Commission notified the CBT that, in the
Commission's view, its corn and soybean contracts no longer met
requirements under Section 5a(a)10 of the CEA of providing delivery
terms which ``tend to prevent or diminish price manipulation, market
congestion, or the abnormal movement of such commodity in interstate
commerce.'' This action was prompted by the failure of the CBT to
respond to changes in the cash grain markets, including a number of
warehouse closings at its primary delivery point in Chicago. During
1995 the delivery capacity in Chicago was reduced by about 50 percent
as three of the six regular elevators at that location ceased normal
operations. In late 1996 a fourth warehouse announced intentions to
cease operation. Nevertheless, in October 1996, the CBT membership
rejected proposals of CBT's Board to expand delivery capacity under the
futures contracts. Problems in the expiration of CBT's 1996 grain
futures contracts (other than March 1996) were avoided only as a result
of intensive monitoring of the markets by the CFTC and the CBT.
Following the requirements of the CEA, the CBT had until March 4,
1997, to adopt and submit contract amendments to correct the
deficiency. The CBT has formed a task force to formulate contract
changes. This task force made recommendations to the Exchange's
executive committee on March 3, 1997, and on March 4 those
recommendations were approved by the entire Board for submission to
CBT's membership. The CBT membership voted on those recommendations on
April 15, 1997, and approved the changes by a 2-1 margin. In addition,
CFTC published the highlights of the CBT's proposal in the Federal
Register and has requested public comments on the proposal. CBT made a
formal submission to CFTC on April 17, 1997, for approval.
The Commission's December 18, 1996 letter also requested the CBT to
review the terms of its wheat contract and to report back to the
Exchange by April 18 (120 days). We understand that this matter is also
under study at the CBT.
international activities
The Commission continued its coordination and cooperation with
foreign regulators during fiscal year 1996. Major international
activities of the Commission included the following:
--Coordination and cooperation with foreign regulators concerning
Sumitomo Corporation's copper trading.
Co-sponsorship of a conference with Japan's Ministry of
International Trade and Industry (MITI) and the U.K. Securities and
Investment Board (SIB) on November 25-26, 1996, concerning regulatory
issues posed by commodity futures markets. Seventeen countries
responsible for the supervision of the world's leading commodity
futures markets issued the London Communique at the conclusion of the
conference. The Communique sets out the proposal of the authorities to
strengthen the supervision of these markets world-wide, particularly in
the areas of the contract design, market surveillance including large
trader reporting mechanisms, and information sharing. The CFTC is
actively engaged in the work program the authorities agreed to
undertake to accomplish that goal.
--Active participation in the International Organization of
Securities Commissions' (``IOSCO'') Technical Committee and its
Working Parties.
--The conduct of the CFTC's sixth annual training seminar for foreign
futures regulators, covering the operation of U.S. futures
markets and the U.S. regulatory system governing futures
trading. This seminar brought together 79 participants from 29
foreign nations.
--The adoption of a multilateral understanding, Declaration on
Cooperation and Supervision of International Futures Exchanges
and Clearing Organizations (``Declaration''), by eighteen
international futures regulators as a result of a joint CFTC-
SIB initiative.
--The execution of a Memorandum of Understanding with New Zealand on
September 19, 1996, concerning consultation and mutual
assistance in the exchange of information in connection with
enforcement matters.
--Continued information sharing and cooperation with foreign
authorities. In fiscal year 1996, the CFTC made over 50
requests for assistance to 38 foreign authorities. The CFTC
also responded to over 55 requests for information from more
than 25 foreign authorities.
regulatory coordination and reform
Regulatory coordination and reform remain an important part of the
CFTC's agenda. The CFTC is a member of the President's Working Group on
Financial Markets along with the Treasury Department, the SEC, and the
Federal Reserve Board of Governors. The Working Group continues to meet
regularly to coordinate regulatory policy. The CFTC also works closely
with other agencies, including the U.S. Departments of Agriculture and
Energy.
The Commission is committed to the elimination of unnecessary
regulatory burdens and is currently reviewing its regulations to
streamline them as appropriate in light of the Commission's mandate to
protect the public interest in our futures and option markets. The new
fast-track approval procedures adopted last week and described above
are part of this effort.
pending legislation
Bills to amend the CEA have been introduced in Congress, S. 257 and
H.R. 467. In testimony before the Senate Committee on Agriculture,
Nutrition and Forestry on S. 257, the Commission presented its view
that the bill would result in the pervasive deregulation of our futures
and option markets and thus would pose grave dangers to the public
interest. The changes included in the bill would radically alter the
regulatory system that has allowed our futures exchanges to become the
strongest and most respected in the world and would leave those who use
and rely on the integrity of those markets exposed and unprotected. For
these reasons, the Commission strongly opposes the provisions of the
bill which would eliminate federal oversight and regulation of futures
and option exchange trading.
The CFTC was created in 1975 because Congress recognized the need
for an expert, independent agency to protect the important national
interests that are served by futures and option markets and to ensure
market integrity through oversight of the exchanges and the thousands
of intermediaries who invest individual, pension and corporate funds in
these markets. The price-discovery and risk-shifting functions of these
markets, long utilized by agricultural producers and processors, are
now essential to the economic well-being of many sectors of the U.S.
economy. While the safety and integrity of the futures markets are as
important as ever to agricultural processors, producers, and consumers,
they are now equally important to financial institutions, multinational
corporations, mutual fund advisors and participants in the cash markets
for energy, metals and many other products. These bills would adversely
affect the safety and integrity of our markets.
We do not yet know whether the outcome of the legislative process
will result in any significant changes in the Commission's mandate. Any
major changes in its legislative authority would likely take a period
of time to implement. As to fiscal year 1998, the Commission believes
the demands on its resources would actually be greater if the
legislation were to pass since many rule changes and other Commission
actions would be necessary to implement the more significant proposals
in the draft legislation. Furthermore, a major shift in emphasis and
resources from market oversight and supervision of regulated persons to
enforcement activities would likely be necessary.
The Commission recognizes the need to ensure that the CEA adapts to
changes in the market place and thus continues to provide an effective
level of regulation and public protection. We are committed to working
with Congress to improve the Act through legislative amendments.
conclusion
The CFTC is committed to building on the achievements of the last
several years to fulfill its Congressional mandate and to keep pace
with a complex, dynamic marketplace. To accomplish this goal and to
make essential improvements to our enforcement, surveillance and
oversight programs, the Commission requires the proposed increase in
its fiscal year 1998 appropriation. This increase will enable the
Commission to heighten its surveillance of major market centers and to
ensure that its surveillance system upgrade stays on schedule. It will
sustain the necessary level of oversight over the compliance programs
of the exchanges and the NFA. Additional funding also will enable the
Commission's enforcement program to respond more quickly to fraud,
manipulation and other wrongdoing in the marketplace, to provide a
greater level of customer protection and better to promote market
integrity.
Thank you, Mr. Chairman. I would be happy to respond to any
questions.
Proposed Legislation to Deregulate Markets
Senator Cochran. Ms. Born, the legislation that you
mentioned being considered by the Senate Agriculture Committee
now for reforms in the law authorizing the CFTC's regulatory
powers, if enacted, you say would not have any effect on your
budget needs for the fiscal year. Did I understand that
correctly?
Ms. Born. For fiscal year 1998, I believe that is correct.
It would have a long-term impact on the Commission's
operations. In the short term, we feel that the need for rule
changes and alteration of the methods of policing these markets
would require the same amount of appropriations.
In the long term, we would need to shift all of our
activities or most of our activities from our current oversight
and surveillance activities that are designed to deter and to
detect manipulation and fraud before they occur, and have to
shift our resources and emphasis to enforcement, since we would
no longer have the ability to detect these activities early on
and to deter them.
Trading Activity
Senator Cochran. There has been, I am told, a good bit of
shift and change at the Board of Trade in Chicago and at the
Merc in terms of business going elsewhere or people trading
bypassing these exchanges. What affect, if any, does that trend
have on your budget needs?
Ms. Born. Well, in fact last year, 1996, was the biggest
year CBOT ever had. It had its highest trading volume and it
had an increase in its profits of 26 percent. Overall last
year, 1996, was the second largest trading volume for all of
our exchanges put together.
We do not see any significant falloff in the trading volume
or activity on these markets. Almost 500 million contracts were
traded last year.
Proposal to Alter Delivery Specifications for Corn and Soybean Futures
Contracts
Senator Cochran. The supplemental which we are considering
now in the Senate, and the House as well, contains some
language regarding the Chicago Board of Trade's proposal to
alter the delivery provisions of its corn and soybean futures
contracts which was put in on the House side, and we have
language that was approved by our committee yesterday on this
subject, too. I would like to have your comments about it just
for clarification.
You have indicated to us that the House language would
conflict with the Commission's statutory obligation to approve
or initiate disapproval proceedings with respect to the Chicago
Board of Trade's rule amendments within 180 days of their
submission. Could you explain to us what the problem is and do
we need to address that in legislation?
Ms. Born. I do not think any legislative action is needed
on this issue. Let me explain what the current situation is.
The Commission notified the Chicago Board of Trade in
December 1996 that its corn and soybean contracts no longer met
the provisions of the act with respect to delivery under
section 5a(a)(10) of the act in that they did not tend to
prevent or diminish the likelihood of manipulation or price
distortion. This was because Chicago was a primary delivery
point, and four out of the six remaining grain elevators in
Chicago had closed down last year, leaving virtually no
delivery capacity there.
That started a statutory procedure under section 5a(a)(10)
that gave the Chicago Board of Trade 75 days to make a proposal
to the Commission to amend the delivery provisions. They made
that proposal on the 16th of April, and we currently have that
out for public comment through the 15th or 16th of June.
The Commission's statutory obligation at this point is to
determine whether the new proposal meets the delivery
requirements of the act. If it does, we would then approve it.
If it does not, we would have the statutory responsibility and
authority to amend it or supplement it to impose appropriate
delivery standards.
The House Appropriations Committee report language
recommended that we delay action until a GAO study goes into
effect. The problem that we have with that language is that,
within 180 days of the submission to us by CBOT on April 16, if
we have not acted to approve, disapprove, or amend, as is our
statutory responsibility, CBOT's proposal might go into effect
automatically and we might lose all statutory oversight power
at that point.
We believe that the Appropriations Committee put that
language in the report not realizing that the likely
implications of the language was that the CBOT proposal would
go into effect, because I think that the motivation for that
language was a concern about the CBOT proposal.
Senator Cochran. That language is in the House report. The
Senate yesterday included language in its report which reflects
the fact that the Commission has solicited public comment on
the Chicago Board of Trade's proposal and indicates that, after
consideration of public comments and using appropriate
criteria, the Commission should complete the process and make a
decision.
So you would prefer, as I understand it then, the Senate
report language? When we get to conference we will have an
opportunity to discuss this and in our statement of managers we
can express the sense of Congress on this subject. We should,
since there are conflicting provisions now between the House
and Senate reports.
Ms. Born. I have not seen the specific language that you
just referred to, but from your description it sounds as though
it would be more consistent with our statutory obligations
under the act and what we would prefer to do.
Senator Cochran. Let me read it so we are sure that the
record is correct here on what our committee report says:
The committee is aware that the Commodity Futures Trading
Commission has solicited public comment on the Chicago Board of
Trade's proposal to amend its delivery specifications for corn
and soybeans. The provisions of the Commission Exchange Act
require futures delivery points that ``will tend to prevent or
diminish price manipulation, market congestion, or the abnormal
movement of such commodity in interstate commerce.'' Giving due
regard to public comments received and using the appropriate
criteria, the Commission should complete the process and render
a decision after taking into account the analysis available to
it.
Ms. Born. That seems completely acceptable and appropriate,
Mr. Chairman.
Senator Cochran. Thank you very much.
Senator Bumpers.
Statement of Senator Bumpers
Senator Bumpers. Mr. Chairman, I must confess that this
whole issue is immensely complex to me.
Senator Cochran. Yes, it is. It is enough to give us all a
headache.
Senator Bumpers. I visited Ms. Born and I visited with
people on the other side of the issue, and I do not understand
the Board of Trade's proposal on contract delivery proposal on
corn and soybeans. I will do my very best to educate myself
before I have to deal with it if I do have to deal with it.
But let me ask you this. Have you testified before the
Senate Agriculture Committee on the bill? I guess it is on
reauthorization, is it not?
Ms. Born. It is not on reauthorization, Senator Bumpers. It
is on amendments to the CEA.
Senator Bumpers. Does it include corn and soybeans?
Ms. Born. It does not.
Senator Bumpers. That is not a part of it?
Ms. Born. No; the Commission is reauthorized until the year
2000. I did testify on S. 257, which would amend the Commodity
Exchange Act, in February before the Senate Agriculture
Committee.
Proposed Professional Markets Exemption
Senator Bumpers. What is it that the so-called Harkin-
something bill does? What does it do?
Ms. Born. Well, it does a number of things. It is a very
broad-reaching bill. The provision that most directly deals
with exchange trading, as opposed to over-the-counter trading
in derivatives, is called the professional markets exemption,
which would exempt from Federal oversight and regulation any
futures exchange which chose to restrict trading on the
exchange to business entities with $1 million or more of net
worth.
The exchanges have said that at least 90 percent of their
current trading volume is on behalf of such eligible entities,
and therefore with very simple rule changes they would be able
to eliminate Federal oversight of those markets.
Under the Senate bill, the Commission would still have the
ability to bring enforcement actions after the fact for fraud
and manipulation. We would, however, lose all the requirements
for recordkeeping and reporting by the exchanges. There would
be no standards for their contracts like these delivery
provisions. There would be no audit trail requirements. There
would be no standards for their rules or for their governance.
Also, if the commodity professionals we regulate, of which
there are 64,000, chose to deal solely on the exempted
exchanges, we would lose all oversight power over those people.
They would no longer have to register. There would not be any
fitness standards. There would not be any net capital
requirements or other financial integrity standards.
So, in effect, we would lose the current ability we have to
detect and prevent manipulation and fraud in these markets,
although once manipulation and fraud, in fact, occurred we
would be able to start an enforcement investigation and bring a
suit against that. However, up until now, for the last 70 years
the major thrust of futures and option regulation has been on
prevention and detection of these abuses, rather than allowing
the abuses to go ahead and occur, because of the enormous
disruption to our economy that that might involve.
Senator Bumpers. The Chicago exchanges say that they have
grown 10 percent over the last several years and their
competitors have grown 500 percent, and they attribute that to
the fact that they have to comply with literally dozens or
hundreds of onerous, unnecessary regulations of the CFTC. And
they think it is time to eliminate a lot of that.
As you said, right now I assume any new trading that they
devise, that they want to do, they have to get your approval
on, do they not?
Ms. Born. That is right, and we have a fast track approval
where----
Senator Bumpers. How fast?
Ms. Born. Ten days for cash-settled contracts that are not
agricultural. For agricultural contracts or for physical
delivery contracts, like a copper contract that required
physical delivery, we have a 45-day time period because we put
that out for public comment so that the industry, the
commercial interests that rely on these markets, the
agriculture producers and processors, the copper industry, will
have an opportunity to comment publicly about how this would
impact on their marketplace.
Senator Bumpers. How does Cargill and Archer Daniel and
people like that feel about the Harkin bill? Do you know?
Ms. Born. A number of the agricultural groups, including
specifically Cargill, but a number of the agricultural trade
organizations as well, have come out and expressed grave
concern about the professional markets exemption.
Senator Bumpers. Thank you, Mr. Chairman.
CFTC Enforcement Activities and Staffing
Senator Cochran. Thank you, Senator.
Ms. Born, we noticed that the budget request is $5 million
over the level of this current fiscal year. Your testimony
indicates that $4 million of that would be to allow the CFTC to
sustain its current services level and $1 million is requested
to fund 20 additional staff-years. We have tried over the years
to add funds as needed for enforcement activities and your
testimony indicates that 75 percent of the program increase
requested for 1998 will be dedicated to enforcement activities.
I am wondering whether the funds that we have previously
been adding to the budget for enforcement activities have been
used to add staff resources in the enforcement area over the
last 3 years? And I am curious to know what new enhancements
are proposed with the funds that you say will be needed this
year, for this next fiscal year.
Ms. Born. We have had about a 10-percent increase in our
enforcement onboard staff between fiscal year 1995 and fiscal
year 1996. We currently have about 157 people onboard in
enforcement, and we are authorized to have 169 people. There
are hiring processes under way to hire the other 12--that is,
we are recruiting and interviewing people for those positions.
In terms of the future use of this additional funding, of
the 20 people who would be hired 10 would be new enforcement
personnel, one would be an additional person for the Office of
General Counsel to assist the Commission in the additional
adjudicatory proceedings that our beefing up of the enforcement
activities has generated, and one would be for the Office of
Proceedings, which is our adjudicatory process, staffing again
required because of the increase in the enforcement activities
of the Commission.
That means that 60 percent of the new staffing we are
requesting is enforcement related. The funds relating to those
12 positions happen to represent 75 percent of the additional
$1 million in programmatic increase, because the enforcement-
related people would be paid more highly than some of the other
people we are hiring.
Increased Effectiveness of CFTC's Enforcement Division
Senator Cochran. We notice that part of the reason for the
additional funding is to continue the restructuring and
effectiveness of the Enforcement Division. Has that been the
result? Have you been able to draw a conclusion as to whether
effectiveness has been increased as a result of these new
expenditures?
Ms. Born. In my view it has been very greatly increased.
There has been a complete reorganization of our Enforcement
Division. We have a new Director of Enforcement. He has been
onboard for a year and a half now. We also have new heads of
the enforcement activities in our three major regional offices,
Chicago, New York, and Los Angeles.
There has been an enormous enhancement of the ability of
the Enforcement Division to deal with extremely complex
financial fraud activities, which are a major part of our
enforcement activities at this point. There has also been a
great enhancement of the ability to have very quick strike
force ability. A number of our cases are frauds where money is
being siphoned offshore or otherwise secreted, and it is
terribly important for our enforcement staff to be able to
quickly investigate a matter, institute an injunctive
proceeding in a Federal district court, and obtain an immediate
temporary restraining order and then a preliminary injunction
freezing the assets and freezing the availability of books and
records and other documents.
Office Space leasing costs
Senator Cochran. One thing that stands out in the budget
request is the increase for the Commission's office space
leasing costs. Compared to this year's level, the next fiscal
year will require $1.592 million more to pay those costs. What
is the reason for that?
Ms. Born. Fiscal year 1998 will be the third year of our
lease on our Washington space. We were required to move our
offices 2 years ago into a new building and were very lucky to
be able to negotiate leasehold improvement funds that could be
applied against our rent for the first 2 years to the extent
that we did not expend them in leasehold improvements.
Because of prudent management by my predecessors, a great
deal of money was saved, and therefore we got substantial
rebates against the first 2 years of the rent. Next year will
be the first year that we will have to pay the full amount. We
have run out of our leasehold improvement funds.
Technology Investments
Senator Cochran. Technology investments are another item
you discuss in the submitted testimony. There are increases
reported for enhancements of the system. What are these
enhancements and are they necessary to maintain current service
levels, or are you trying to keep pace with the growth in the
markets? For what reason are these investments necessary?
Ms. Born. The amount that is an increase is an amount that
is just to continue our ordinary activities. It is for computer
processing and programming services that we ordinarily need,
but were able to obligate in fiscal year 1996, and therefore
they appear as an increase for fiscal year 1998, but are in
fact a continuation of our ordinary level of costs.
Let me just ask Madge Bolinger if that is correct.
Ms. Bolinger. That is correct.
Ms. Born. So while we have expended or will expend
approximately that same amount this year for our ongoing
computer programming and processing services, we were able to
obligate that money in fiscal year 1996 and therefore did not
have to use this year's funds to do that.
Risk Management Education
Senator Cochran. The Department of Agriculture, according
to the Secretary of Agriculture, has begun a new effort to
teach farmers how to use new types of crop insurance and
agricultural futures and options to help manage risks. Is the
Commission involved in this in any way, and, if so, could you
tell us what part you are playing in this new effort?
Ms. Born. Certainly we have been actively involved with the
Agriculture Department in this effort. Section 192 of the FAIR
Act called on the Secretary of Agriculture to provide risk
management education opportunities to agricultural producers
because of their increasing needs for risk management as
Government price supports diminish. That same provision states
that the CFTC would cooperate with the Secretary of Agriculture
in his design and implementation of this program.
That is now well under way under the Agriculture
Department's leadership. We are part of a group that the
Agriculture Department has put together to design and implement
an educational program, and there is going to be a summit
meeting with various groups who we hope will play an active
role in the teaching process in September.
Commissioner Joseph Dial of our office has been appointed
by me to be the liaison to that group and is our point person
on this effort. We feel it is very important.
Competitiveness of U.S. Exchanges
Senator Cochran. There is, I am told, concern among the
exchanges that, in spite of your statements about the growth in
the markets over the last decade and the volume of trading that
occurred on the exchanges in this last year, that they are
losing ground to foreign and over-the-counter markets, and that
some of this may be due to the burden of the regulatory
restraints that are imposed on the exchanges by the CFTC.
What is your reaction to this? Is overregulation a reason
that U.S. exchanges claim they are losing market share to
overseas exchanges and are those claims correct?
Ms. Born. We do not believe so. At Congress' request in the
1992 amendments to our act, our staff conducted a study in 1994
of competitiveness between U.S. and foreign exchanges, which
concluded that regulatory differences did not put our exchanges
at a competitive disadvantage.
That study was recently updated in a summary way by our
staff, and I would be happy to provide those reports to members
of this subcommittee.
But let me say beyond that that the Commission is committed
to streamlining our regulation to the extent possible
consistent with protecting the public interest. The Commission
has only been up to full strength, all five members, since last
September, after several years of not having a full complement.
Currently all five Commissioners are very committed to reducing
unnecessary regulatory burdens. We have taken a number of steps
already in amending our rules that we think streamline the
regulation and modernize it, and are currently working with the
exchanges to find other areas in which the regulatory burdens
can be reduced.
We clearly feel that healthy, competitive markets in the
United States are very much in the public interest and very
important.
Proposed Promarket Exemption
Senator Cochran. My concluding question is on the subject
of the promarket exemption in the reform legislation, or the
deregulation proposal, that is pending here in the Senate. You
have expressed opposition to this provision, which would exempt
professional markets from regulation. Would you tell us why you
think that exemption should not be approved by the Congress?
Would it really impair the integrity and security of the
futures markets?
Ms. Born. We believe that it would. It would eliminate all
the Federal standards under which these markets have been
operating since the 1920's. Because more than 90 percent of the
current volume of trading is represented by the eligible
entities for a professional market, we believe that the
exchanges would adopt professional markets in a broad-based way
and suggest that small traders enter the markets only through
commodity pools and mutual funds and otherwise.
So we think that the provisions would have very broad
effects. They would eliminate such things as the requirements
of competitive trading, open pricing, large trader reports,
which the Commission uses to determine who the large players in
the market are and whether their activities in the markets are
explainable by normal economic forces or whether a squeeze is
under way by large institutions.
We would no longer have for commodity professionals who
trade on these markets any standards, such as the fitness
standards which say that if you are convicted of a felony you
are statutorily disqualified from trading on the markets. There
would be no net capital requirements for commodity
professionals who have client money. There would be no
requirement of customer funds segregation.
We do not have insurance for customer funds in this
industry, unlike the securities industry, and therefore
segregating those funds is necessary to protect customers
against broker insolvency.
We would no longer have the tools to prevent or detect
fraud on the floor of the exchanges, like the audit trail
provisions for example.
We think this would be a very pervasive deregulation. As I
said, our only powers that would remain would be enforcement
powers after fraud or manipulation occurred, and the Senate
bill, unlike the House bill, also allows us to keep emergency
powers. The problem is we would be unable to detect an
emergency in its incipiency, and therefore we do not think
those emergency powers would give us the powers we need.
Senator Cochran. Senator Bumpers, do you have any other
questions or comments?
Competitiveness of U.S. Exchanges
Senator Bumpers. Mr. Chairman, not to belabor the point and
take too much time, but to pursue the very line of questioning
you were pursuing.
Ms. Born, if the Chicago Board of Trade, for example, is
correct in their assertion that unregulated competition is
driving them out of business and that they have, in fact, only
grown 10 percent while their competitors have grown 500
percent, would that not be an indication that something needs
to be addressed?
Ms. Born. I would be concerned if that were true. In fact,
as I said, they have grown 130 percent over the last 10 years,
more than doubled.
Senator Bumpers. 130 percent of what? Volume, trades, or
what?
Ms. Born. Volume of trades. Over the last 10 years
nationwide our exchanges have gone up to 500 million contracts.
CBOT had its biggest year ever last year, and its profits were
up by 26 percent in 1996, to $19 million.
Senator Bumpers. Do they file all that with you? Do they
file their annual financial statement with you?
Ms. Born. We receive a financial statement, yes.
Senator Bumpers. And what was their profit? What was the
increase in their profit last year?
Ms. Born. Twenty-six percent. And they also built a $183
million new trading floor last year, that just opened this
spring.
Senator Bumpers. Well, they argue two things. No. 1, it is
not just their domestic competitors. They say this is now a
global business and that some exchanges have moved to London
because London, because of the time zones, can do more business
in more time zones than they can do here, and that is how
competitive. There is not anything unusual about that, I guess.
Maybe other companies do that, too. But in any event, I did not
understand it either, Ms. Born.
Ms. Born. I do not understand. That is the first time I
have heard that particular argument.
Senator Bumpers. You have heard that they are moving people
to London?
Ms. Born. I know the London markets have for a long time
been very dynamic markets. There is a very large market there
called LIFFE, the London International Financial Futures
Exchange. And there is also a very old market called the London
Metal Exchange. They are two of the largest in the world.
Where much of the growth has been internationally has been
in a number of other countries, a lot of emerging countries
included, that in the past decade have recognized how valuable
to the U.S. economy our futures exchanges have been in
providing hedging against interest rate risk and stock index
risk. A number of European, South American, and Asian countries
have in the last decade set up futures exchanges that are
focused on their domestic underlying cash markets. That is, the
German exchange, for example, has a contract on the interest
rates of the German Government securities, their German bond.
They also have, I think, a contract on the German stock market
stock index.
Our staff study found that the vast majority of these
foreign contracts do not compete on a head-to-head basis with
U.S. contracts because they are focused on the domestic markets
of the foreign country.
All these markets are regulated by their domestic
governments, and indeed all the major markets in the world have
more government oversight and regulation than would be possible
under the professional markets exemption.
For more than a decade the Commission has been working with
these foreign regulators to raise the level of foreign
regulation. We have had some very bad scandals abroad because
foreign regulators have lacked some of the basic tools we have.
For example, the Sumitomo matter last year in London
occurred because the London governmental authorities did not
have large trader reporting and therefore could not detect
Sumitomo's large position. I think it likely that Sumitomo went
from NYMEX, our market, to the London Metal Exchange in order
that it could trade in the manner in which it was in an
undetected way. Since the Sumitomo matter, the London
regulators have required large trader reporting and made a
number of other significant improvements.
We hold annual international regulators seminars for
foreign regulators because the U.S. regulations and statute are
the model for the world. Last fall we had our sixth annual
international regulators meeting, where 80 participants from 30
foreign countries came to Chicago for a week to be trained by
CFTC staff on our regulatory regime. And we are working with
the principal regulators in the 17 countries with the largest
exchanges to adopt international best practice standards for
how futures markets should be regulated, to make sure that all
these markets are safely regulated.
We cannot really do our job here if there are systemic
risks coming from foreign markets.
Senator Bumpers. Thank you, Mr. Chairman.
Role of the CFTC
Senator Cochran. Well, I think we have been educated a
little bit this morning, or a lot, in terms of the role of the
CFTC and the issues that are being considered by our
legislative committees. I am on the legislative committee and I
had the opportunity to attend some hearings on this subject and
to listen to the arguments on both sides of some of these
issues, and it is a very complex and highly technical set of
facts that we are all having to work with and trying to
understand.
It may be over all of our heads, to be real honest.
Ms. Born. It is very complex.
Senator Cochran. But we are working very hard to come to
grips with all of this and make correct decisions, well-
informed decisions. So we appreciate very much your patience
and your willingness to discuss these things with our
committee.
Senator Bumpers. When I was Governor I was down at the
penitentiary one time and I said: You know, it seems to me that
these guys need a little more opportunity to do things to
occupy their minds. He said: They occupy their minds. I said:
How do they do it? And he said: They gamble.
I said: What do they gamble on? He says--he looked up at a
telephone line along the highway and he says: They will stand
out in this field and bet which one of those blackbirds will
fly first on that. I said: That sounds like the exchange
markets. [Laughter.]
Senator Cochran. Thank you very much for being here and for
your cooperation with our subcommittee. We appreciate it very
much.
Ms. Born. Thank you very much, Mr. Chairman, and I would be
very pleased to provide any information on any of these
subjects at any time to you or other members of the
subcommittee.
Submitted Questions
Senator Cochran. Thank you. We may very well submit some
questions on some of the specifics in the budget that we did
not touch on this morning, and we would appreciate your
responding to those questions in a timely way.
Ms. Born. We would be delighted to do so.
Senator Cochran. Thank you.
Ms. Born. Thank you very much.
[The following questions were not asked at the hearing, but
were submitted to the agency for response subsequent to the
hearing:]
Questions Submitted by Senator Cochran
market surveillance system and technology investments
Question. The testimony submitted for the record indicates that
additional funding is proposed in the fiscal year 1998 budget to allow
the Commission to continue efforts started in fiscal year 1996 to
redesign and implement an Integrated Market Surveillance System. What
enhancements of this system are included in the fiscal year 1998 budget
request? Is this amount included in the increase to maintain current
service levels? What other technology investments are included in the
fiscal year 1998 request?
Answer. No enhancements are budgeted for this system in fiscal year
1998, and there is no amount included in our current services level or
program level for enhancement to the integrated market surveillance
system. The ``additional funding'' statement in the testimony refers to
three additional FTE's for the Market Surveillance program, a portion
of whom will be used to analyze the additional large trader data that
the redesigned integrated market surveillance system will be handling.
technology investments
Question. What technology investment has the Commission made in
each of the last five years to keep pace with the growth in the markets
and what future investments are planned?
Answer. In fiscal year 1992, we established a separate operating
environment on our existing mainframe computer to begin testing for
conversion to a new operating system. The new operating system was
needed to improve the efficiency of the mainframe and thereby to
accommodate the increased processing capacity resulting from the growth
in the markets. We also upgraded our local area network communications
infrastructure in Chicago and New York to keep pace with staff
utilization of computers and to provide greater stability and better
performance. We also expanded the scope of our correspondence tracking
system to allow more staff members to keep pace with a growing level of
correspondence. In addition, the Commission installed an imaging system
for use in expediting the processing, distribution and use of a variety
of printed information including storage and retrieval of market-
related news events.
In fiscal year 1993, we developed systems to simplify several
difficult functions. One system, used in conjunction with the imaging
system, resulted in accelerating the flow of information related to the
Commission's legal opinions and interpretations and decisions of
administrative law judges in futures cases. Another system was designed
and implemented for tracking the Commission's review of exchange rule
change proposals, thereby allowing quicker response to exchange and
public inquiries regarding outstanding reviews. We also developed a
system to support the investigations of trade practice abuses and other
illegal market activities. As we did in New York and Chicago the year
before, we upgraded our local area network communications
infrastructure in Los Angeles to provide greater stability and better
performance. We also began operation of the new mainframe operating
system that was tested on our existing mainframe in fiscal year 1992.
In fiscal year 1994, we undertook several modernization steps to
accommodate market growth and to allow the Commission to keep pace with
the evolving migration to network-based applications. Specifically,
capacity of communications links between CFTC locations was upgraded,
allowing Commission staff interactively to access and manipulate shared
information, thereby allowing intra-office collaboration. We upgraded
the Commission's network servers and replaced older personal computers
to accommodate the higher-performance computing requirements. The
Commission moved toward adopting a client-server based software
development and application platform standard which offers the
opportunity for creation and maintenance of highly effective
applications for shared use by all Commission staff regardless of
physical location. We began design of a system for managing and
tracking the reparations process--the first application of the client-
server architecture. We also developed a new version of the Exchange
Database system which processed additional data elements, provided
enhanced search and retrieval capabilities and provided new reports to
assist in detecting market aberrations. The Commission also conducted
reviews of several emerging automated systems being developed by or for
the exchanges including the New York Mercantile Exchange's ACCESS
system and the joint Chicago Board of Trade and the Chicago Mercantile
Exchange AUDIT system.
In fiscal year 1995, as part of our modernization program, we
continued with the routine replacement of the oldest personal computers
allowing the Commission more effectively to utilize sophisticated
software. We also upgraded the communications interface between our
mainframe computer and our personal computers, thereby facilitating the
direct manipulation and importing of mainframe data by staff with their
personal computers. We also upgraded the local area network
communications infrastructure of our headquarters office in Washington.
We implemented the Reparations Case Tracking System designed in fiscal
year 1994. We developed enhancements to the existing (old) market
surveillance system to allow for easier analysis of extremely complex
trading data. We also prepared a Computerized Trading Report which
analyzed the Chicago Mercantile Exchange's GLOBEX trading system and
the New York Mercantile Exchange's ACCESS system. The report focused on
the potential for enhancing access by market participants, improving
the Commission's ability to audit the markets, and reducing the
opportunity for trading abuses.
In fiscal year 1996, the Commission awarded a contract and began
work on a multi-year effort for redevelopment of mission-critical
surveillance systems. The re-engineering and relocation of these
systems from the mainframe to a client/server environment offered a
number of advantages. Financially, the Commission would avoid an
inevitable upgrade of our mainframe computing facilities which would be
necessary to accommodate a six-fold increase in data storage and
processing requirements. Furthermore, since the surveillance system was
responsible for about 80 percent of our mainframe utilization, this
project was instrumental to our larger cost-saving goal of closing our
mainframe data center in compliance with OMB Circular 96-02,
Consolidation of Data Centers, by our deadline of June 2000. In fiscal
year 1996, the Commission also established a website. The website
includes background information about the Commission, press releases,
speeches, and reports such as the Commitments of Traders and Bank
Participants in Futures and Option Markets, Commission Orders and
Advisories. The website also includes information about public programs
such as Reparations. The Reparations program provides a method for the
public to seek compensation for money lost to illegal futures schemes.
The Commission also continued with its routine replacement of the
oldest personal computers to the more efficient and serviceable
industry standard models.
Regarding future investments, the Commission intends to continue
with our modernization program in a number of areas. Each year we will
replace a number of personal computers from the oldest stock with
computers representing current technology. Likewise, we will maintain
the required level of performance of network servers to service these
higher-performance personal computers and our increased use of client/
server applications instead of mainframe applications. Accordingly, we
will use network servers with large amounts of magnetic storage,
thereby eliminating our reliance on magnetic tape for storage of
massive amounts of data. Within the next two years we plan to select
and install new operating systems on all personal computers and network
servers enabling a web-browser-like interface, thereby improving the
ease with which our staff will be able to access and manipulate the
increasing volume of information. In combination with our evolving
Internet and the ever-increasing expansion in global use of the
Internet, staff will be able to access all relevant information through
a single interface. In addition, we will adopt the use of higher speed
communications in both our local and wide area networks. We also plan a
low-cost upgrade of communications interface cards with our servers and
other key equipment to address the additional capacity required as we
migrate our mainframe applications to the client/server environment and
continue to automate other office procedures. With regard to our wide
area network, we plan to increase our use of electronic receipt and
transmission of information in place of magnetic tapes, diskettes and
paper.
While these technology infrastructure enhancements are made, work
will continue on the development and phased implementation of the
Commission's new surveillance system. The new system will provide for
the collection and integration of daily options with futures data to
permit more complex analyses of activity in our markets. This will
greatly enhance our ability to detect and deter market manipulation,
Additionally, migration of systems from the mainframe environment to
the Commission's client/server architecture will continue until all
systems are operational in the client/server architecture and the
mainframe data center will cease operation.
All new systems are being developed for operation in the new
architecture. It is anticipated that this action will be completed by
June, 2000.
internet, technology and regulatory challenges
Question. Chairperson Born, you indicate in your prepared testimony
that technology presents increasing regulatory challenges to the CFTC,
including the need to police futures and option trading advice and
sales offered illegally via the Internet. What is the CFTC doing to
meet these new regulatory challenges?
Answer. The CFTC is meeting the challenges posed by new technology
in various ways. First, the Division of Enforcement established an
Internet monitoring and surveillance program in fiscal year 1996. Under
the program, Enforcement staff monitors futures related ``web sites''
and ``homepages'' on the Worldwide Web, as well as messages posted on
Internet bulletin boards. Staff also monitors various news groups and
chat rooms relating to commodity futures and visited by Internet users.
This monitoring of the Internet has generated enforcement inquiries
concerning issues such as possible registration violations, possible
misrepresentations of the success of trading programs and the offer of
potentially illegal off-exchange products.
To date, the monitoring program has generated dozens of referrals
for Enforcement staff and has resulted in the filing of a number of
enforcement cases. For example, in September 1996, the Commission filed
and simultaneously settled two cases resulting from this surveillance.
In both cases, the Commission issued orders pursuant to which the
respondents agreed to stop providing advisory services to Internet
subscribers until they register as CTA's and comply with applicable
regulatory requirements. In re Brown, CFTC Docket No. 96-8 and In re
Marks, CFTC Docket No. 96-9. Enforcement staff was able to move quickly
against Brown and Marks; both had agreed to enter into consent orders
with the Commission within weeks of the time they first engaged in
activities on the Internet. As a result of early detection, Brown had
not successfully solicited any customers at the time his page was
withdrawn. Marks agreed to refund all money received from subscribers
and to transmit an electronic mail message over the Internet to all
former subscribers notifying them of the action.
Second, the Commission is using the Internet both to disseminate
and to gather information. Enforcement's homepage provides a brief
summary of the types of abuses commonly investigated and prosecuted by
the CFTC, provides descriptions of recently filed cases and encourages
the public to report suspected abuses by providing an electronic
questionnaire that can be filled out by visitors to the website.
Enforcement has also used the Internet to obtain information from the
public regarding particular matters. An example is the case of CFTC v.
Chancey, Civ. No. 7:96-61 (M.D. Ga. filed July 1, 1996), an injunctive
action against Donald Chancey and a firm controlled by him alleging
fraud and registration violations in connection with the activities of
an unregistered CPO. Enforcement is using its homepage to solicit
information concerning the whereabouts of Chancey, who disappeared
before the Commission filed its action against him. The Division has
also posted on its homepage a picture of the defendant, as well as
notices publicizing the court-sanctioned auction of Chancey's property.
enforcement funding
Question. Please tell us what additional funding and staff
resources have been allocated to the Commission's enforcement efforts
in each of the last three fiscal years, what enhancements are proposed
for fiscal year 1998 and what future resources, funding and staff
years, will be required to bring these efforts up to the level you
believe is required to enable the Commission to effectively supervise
the futures and option markets and to enforce the laws against fraud
and manipulation in those markets.
Answer. In fiscal year 1995, the Commission obligated $17.9 million
and used 198 FTE's, and in fiscal year 1996, the Commission obligated
$19.0 million and used 202 FTE's for enforcement related efforts. In
fiscal year 1997, the Commission allocated $21.9 million and 225 FTE's
for enforcement related efforts.
It is difficult to project with any great precision what future
resources the Commission will require in order effectively to supervise
the futures and option markets and to enforce the anti-fraud and anti-
manipulation laws applicable to those markets; many of the factors that
dictate the Commission's specific future use of resources are beyond
its control. For example, factors such as market events or the
development of new financial products can require a quick response by
the Commission, which, in turn, can require the reallocation of
resources. However, the passage of proposed legislation reducing the
Commission's regulatory tools to prevent and to detect fraud and
manipulation would require substantial additional resources for
enforcement activities. At the core of the Commission's supervisory
efforts is a strong and fully staffed Division of Enforcement which
enables both quick detection of wrongdoing and timely prosecution of
administrative and injunctive actions when necessary. The Commission
remains dedicated to using its resources as efficiently as possible to
ensure that its enforcement efforts keep pace with the demands placed
on it by the markets.
program and staffing increases other than enforcement
Question. In addition to the Commission's enforcement activities,
please indicate what other program and related staffing increases are
proposed in the fiscal year 1998 request and the importance of the
increased resources requested for each of these activities.
Answer. The Commission is requesting a net program increase of
$263,000 for all other programs. This net increase covers the
compensation cost of three FTE's in the Contract Markets program, two
FTE's in the Audit and Review program, and three FTE's in the Market
Surveillance program. The three FTE's requested for the Contract
Markets program will allow the Commission to keep pace with workload
stemming from the Futures Trading Practices Act of 1992 as well as
allow the Commission responsibly to respond to innovation in the
marketplace. The two FTE's requested for the Audit and Review program
will allow the Commission effectively to continue its oversight of the
compliance programs of the self regulatory organizations and to conduct
selected audits and examinations of registrants. The three FTE's
requested for the Market Surveillance program will enhance the
surveillance of exchange markets by developing additional software for
complex analyses used for special reports. The increases will also
enable the program to analyze a twofold increase in the number of large
trader reports received, resulting from the collection of option large
trader reports, as well as facilitate the change from a mainframe to a
client-server environment for the surveillance system. The increase
will also allow the surveillance staff to develop appropriate
surveillance procedures to deal with intermarket analysis.
current services
Question. I understand that of the $4 million increase requested to
enable the Commission to sustain its current services level, 42 percent
is for mandatory pay increases, 40 percent is for leased office space,
and the remaining 18 percent is for systems analysis and other costs.
(a) What mandatory pay increases does the fiscal year 1998 budget
include? (b) Please provide a breakdown of the systems analysis and
other costs required for the Commission to maintain current services in
fiscal year 1998.
Answer. Mandatory pay increases include an anticipated cola/
locality increase effective in January 1998, which is estimated to be
on average approximately 3.1 percent, and the annualization of the
January 1997 cola/locality pay increase which averaged 3.3 percent.
Also included are costs for within-grade increases for fiscal year 1998
and the annualization of fiscal year 1997 within-grade increases. Other
mandatory pay increases include increased costs in the agency
contribution for personnel benefits. The total cost of all mandatory
pay increases for fiscal year 1998 is $1,678,000.
The $659,000 requested for systems analysis is comprised of
$534,000 for applications programming support and $125,000 for systems
programming support. Other costs required for the Commission to
maintain current services include $1,592,000 for rental of office space
for headquarters and regional offices and a net increase of $60,000 for
all other object classes.
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
STATEMENT OF MICHAEL A. FRIEDMAN, M.D., LEAD DEPUTY
COMMISSIONER
ACCOMPANIED BY:
ROBERT J. BYRD, DEPUTY COMMISSIONER, MANAGEMENT AND SYSTEMS
WILLIAM B. SCHULTZ, DEPUTY COMMISSIONER, POLICY
DENNIS P. WILLIAMS, DEPUTY ASSISTANT SECRETARY, BUDGET,
DEPARTMENT OF HEALTH AND HUMAN SERVICES
MARY K. PENDERGAST, DEPUTY COMMISSIONER/SENIOR ADVISOR TO THE
COMMISSIONER
Introduction of Witnesses
Senator Cochran. Our next subject is the budget of the Food
and Drug Administration. We are pleased to welcome to our
subcommittee Dr. Michael Friedman, who is the Lead Deputy
Commissioner of the Food and Drug Administration; along with
Robert J. Byrd, Deputy Commissioner, Management and Systems;
William B. Schultz, Deputy Commissioner for Policy; and Dennis
P. Williams, Deputy Assistant Secretary for Budget of the
Department of Health and Human Services.
We know that you have others with you and if you would like
to introduce any of them, please feel free to do so.
We will ask Dr. Friedman to make whatever comments or
remarks he thinks might be helpful to our committee's
understanding of the budget request. We do have your full
statement and it will be printed in the record in full.
Dr. Friedman, welcome. You may proceed.
Dr. Friedman's Opening Remarks
Dr. Friedman. Thank you very much, Mr. Chairman. We do
appreciate this chance to spend some time providing you with
information this morning.
You have introduced and kindly allowed to accompany me, my
colleagues. There are, as you pointed out, other agency key
staff who will be available to answer questions after my
opening remarks.
Sir, as you well recognize, the mission of our agency is to
promote and to protect the public health of Americans, and
today I serve as a spokesman for an agency deeply committed to
ensuring that our citizens have confidence in the quality of
their food, the medicines, the devices that are crucial to
their health care, and the tens of thousands of other FDA-
regulated products which we use daily.
We recognize this is an enormous responsibility. My written
statement describes in far greater detail our performance, a
performance that demonstrates a capacity for self-critical
evaluation and a pragmatic striving for improvement. Our
performance also reflects a commitment to our mission, our
responsiveness to the public and to Congress, and our
stewardship of every tax dollar that is entrusted to us.
In the interest of conciseness, I would like to just
briefly overview some aspects of our activities over the past
year and to focus on three top priority requests which we have
highlighted in our budget and which we are prepared to discuss
more fully: The first is our food safety initiative to counter
the threat of foodborne illnesses; the second, a sensible
regulatory program to protect our youth from the diseases
caused by the use of tobacco products; and third,
reauthorization of two terribly important existing major user
fee programs, the Prescription Drug User Fee Act [PDUFA] and
the Mammography Quality Standards Act, both of which are set to
expire in October 1997.
There are of course a number of difficult budget issues to
be addressed in this environment of deficit reduction. We
recognize this. We want to work with you and others to help
resolve these issues.
Now, while time does not permit me to fully or properly
convey the achievements of the various parts of our agency, I
would like to highlight if I may some achievements from each of
our centers, to set the framework for what sorts of successes
we have had this past year which will justify and support our
request for financial support for those activities this year.
Let me begin with the Prescription Drug User Fee Act. In
1992 this was designed by the appropriations and authorizing
committees of both the House and the Senate, in conjunction
with representatives of the drug industry and FDA, as an
experiment. In this experiment, industry supplied additional
resources to FDA in the form of user fees, which would be used
specifically to improve application review for new drug and
biologic products for humans.
Four years later, we judge this to be nearly a universal
success. Patients get new drugs sooner, with better quality and
length of life. Companies are able to market their products
sooner. And we have gained the resources necessary to better
perform our job.
The first chart demonstrates that since the initiation of
this program we have consistently met and most often exceeded
PDUFA's demanding and aggressive annual performance goals, and
last year's were the best results so far. For example, drugs
called new molecular entities are widely regarded as potential
breakthrough products. The number of these approvals serves as
an indicator of progress in medicine, and in this sense last
year was outstanding.
----------------------------------------------------------------
PRESCRIPTION DRUG USER FEE ACT
On-Time Review Performance--Fiscal Year 1995 Submissions
------------------------------------------------------------------------
Percent--
-------------------------
Goal Actual
------------------------------------------------------------------------
Original NDA's/PLA's/ELA's.................... 70 95
Efficacy supplements.......................... 70 93
Manufacturing supplements..................... 70 89
Resubmissions................................. 70 96
------------------------------------------------------------------------
----------------------------------------------------------------
Our Center for Drug Evaluation and Research approved 53
NME's. Last year's median time to approval was 14.3 months.
Basically what happened was we approved twice the number of
products in one-half the time, a really outstanding achievement
for this center.
[Clerk's note.--The information appears as chart No. 1
accompanying Dr. Friedman's prepared statement.]
In the first year of PDUFA, we approved 70 drugs overall in
a median time of about 24.1 months. Last year the agency
approved 131 new drugs, including the NME's, in a median time
of 15.4 months--a far larger number of products in a shorter
period of time.
Another outstanding achievement last year was the approval
by our Drug Center of 118 efficacy supplements. These are very
important reviews and approvals. This was an unprecedentedly
large number.
I fear that these will be seen as sterile statistics and
they should not be viewed in that regard. These are issues of
enormous personal importance to family members, to our friends,
to everyone who needs new treatments.
This record of achievement can only be maintained with
adequate resources and consequently reauthorization of what we
think is a spectacularly successful user fee program is a top
priority for us.
However, lest you think this sort of performance is an
isolated exception, let me just briefly share with you
representative data from some of our other centers. Our
biologic center had a very, very productive year, approving
some very important new products, including vaccines, blood
products, diagnostic products, and therapeutic products.
If one looks at our Device Center, the number of premarket
approvals went up dramatically. As you can see, between 1993
and 1996 the increase is really substantial.
[Clerk's note.--The information appears as chart No. 5
accompanying Dr. Friedman's prepared statement.]
That is a small but important part of our Center for
Devices. A much larger component of the activity of the Center
for Devices are the so-called 510[k] products. Here you can see
that our timeliness in dealing with these products has improved
dramatically. Now, in excess of 90 percent of these products
are reviewed within a statutory review cycle.
This work represents roughly 98 percent of all the
activities of the Center for Devices.
[Clerk's note.--The information appears as chart No. 6
accompanying Dr. Friedman's prepared statement.]
A topic of importance to this committee is the entire
reengineering process that is taking place in our Center for
Veterinary Medicine. With last year's legislation, working very
closely with Congress, working very closely with the involved
industries, a major reinvention effort has been initiated so
that we review these products in a more timely, more complete
way, and we think in a more efficient way. This is a very
important experiment that we are very committed to seeing
succeed.
[Clerk's note.--The information appears as chart No. 8
accompanying Dr. Friedman's prepared statement.]
Now, Mr. Chairman, I describe these highlights of last
year's performance not as an exercise in self-congratulation,
but rather I want to make the case, based I hope on what will
be convincing evidence, that with your continued support, with
a sufficient budget, and with our determination to improve
ourselves, we are prepared to meet the public health challenges
ahead.
One of the most important and significant public health
challenges ahead for us is to protect the public against
foodborne illness by implementing the Presidential food safety
initiative. Americans rightfully expect their food to be
wholesome and safe and, with rare exception, it is. We do,
however, know that problems exist.
Millions of foodborne illnesses occur each year and perhaps
as many as 9,000 Americans die as a result. The total estimated
costs involved may be $5 billion, and these costs both in terms
of lives and economic consequences are unacceptable.
----------------------------------------------------------------
Food Safety Initiative
problem: increased incidence of foodborne illness, particularly of
microbial origin
--Estimated 6.5 to 33 million illnesses and up to 9,000 deaths
annually
--Estimated total costs of foodborne illness are $5.6 billion
--Food product recalls for life threatening bacteria (Class I)
increased from 79 in 1988 to 378 in 1995
--Microorganisms becoming resistant to traditional control measures
and developing pathogenic characteristics
--More retail establishments are processing foods on-site
--Increase in imported foods
--Vulnerable populations are growing in size (e.g., the elderly,
immuno-compromised)
----------------------------------------------------------------
When an outbreak of foodborne illness is recognized, we act
quickly and vigorously. We act in cooperation with other
Federal--such as USDA, CDC, NIH, and EPA--State, and local
public health authorities, and with members of the industry. We
need to recognize in a timely way the problem and then to have
the scientific tools to ascertain the cause of the problem and
to initiate the means to stop the problem from spreading.
Last year, for example, thanks to such teamwork we were
able to limit the public's exposure to apple juice contaminated
with an E. coli 0157-H7. The manufacturer promptly recalled the
unsold product, a national warning was issued, and many
consumers did not drink it. Even so, 66 North Americans were
made ill and, sadly, one little girl died of complications of
this foodborne illness.
A more recent example has been the hepatitis A outbreak
associated with frozen strawberries, and this is another
example of how Federal agencies working together can cooperate
in a more effective way. Both USDA and the Food and Drug
Administration were notified in March by the State of Michigan
of a possible link between hepatitis A and frozen strawberries
from a processor in California. We began working in cooperation
with the State of California Health Department and we inspected
the processor's facility, conducted a full inspection, and
began an investigation of the product's distribution.
CDC was integrally involved in working up the epidemiology
of this outbreak. Working together, we identified that 13
specific lots were of concern. A decision was reached to
administer gamma globulin to schoolchildren who had consumed
the strawberries within 14 days from those lots, and we
proceeded to recall the product with the cooperation of those
industrial processors.
So far during the course of the outbreak investigation, the
source of the contamination has not yet been determined.
Contamination could have occurred anywhere from harvest to
consumption. Despite the complexity of this situation,
cooperation among FDA, CDC, and USDA, State and local
authorities helped greatly to contain the outbreak.
It may not be possible to identify the specific cause of
the outbreak of hepatitis A in these strawberries. To date we
are pleased that there are no confirmed cases of hepatitis A
occurring outside of Michigan associated with the consumption
of these particular berries.
These outbreaks underline for all of us the need for a
strengthened interagency cooperation in surveillance,
inspection, consumer and foodworker, from field to retail
education, risk assessment, and the supporting research, as we
request in our budget.
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Food Safety Initiative
--Surveillance--Enhance the early warning system
--Inspections
--Risk Assessment
--Research
--Education
--Coordination--USDA, CDC, EPA, NIH and State/local officials
----------------------------------------------------------------
Now, sir, another major task we face in the coming year is
to begin implementing our tobacco rule, which is designed to
better protect our most precious resource, the youth of the
country, against the devastating effects of tobacco. The
President announced the rule last August and, as the members of
the committee are aware, last Friday the U.S. District Court in
North Carolina upheld the agency's jurisdiction to regulate
cigarettes and smokeless tobacco as combination drug-device
products, although the court limited the agency's authority to
regulate advertising.
While both sides will appeal aspects of the ruling, the
court has permitted the agency to continue to implement the
requirement that retailers not sell to persons under the age of
18.
This regulation we believe is critical to protection of the
public health because every year smoking causes the premature
death of more than 400,000 Americans, a number of people which
is greater than those who die each year from AIDS, from
alcohol, car accidents, murders, suicides, illegal drugs, and
fires combined.
The agency's rule is premised on the fact that most tobacco
users begin use during childhood and that the most effective
public health strategy is to prevent children from starting to
use tobacco products. In fact, at present 3 million American
youngsters use tobacco products. An additional 3,000 children
and young people start smoking every day. We know that one-
third of these individuals will die prematurely as a result of
smoking.
----------------------------------------------------------------
Youth Tobacco Prevention Initiative
--3,000 Young People Become Regular Smokers Each Day
--Average Teenage Smoker Starts at 14\1/2\ Years Old and Becomes a
Daily Smoker by 18
--Every Year 1,000,000 Young People Become Regular Smokers
--One-Third of These Children and Adolescents Will Die Early from
Their Use of Tobacco
--5,000,000 Children Alive Today Will Die Prematurely from Smoking
--Tobacco Kills More than 400,000 Americans Each Year
--Smoking Rates of 8th Graders Increased 50 Percent in 6 Years
----------------------------------------------------------------
We have begun implementing the access provisions upheld by
the court in cooperation with State and local authorities as
the first step in a program that is aimed at reducing tobacco
use by minors by a total of, we hope, 50 percent in 7 years.
Our budget request will focus on outreach to educate
retailers and others about these new rules, and on contracts
with State officials to begin enforcing this new program.
----------------------------------------------------------------
Youth Tobacco Prevention Initiative
Outreach
--Retailers
--Tobacco Manufacturers, Distributors and Other Affected Parties
--State and Local Officials
--Community and Public
Enforcement and Evaluation
--Cooperative Federal and State Enforcement
--Possible Demonstration Projects with States
--Evaluation--CDC Collaboration
----------------------------------------------------------------
Mr. Chairman, in addition to these three priority tasks--
the food safety initiative, the restriction of access to
tobacco products by minors, and the reauthorization of two
existing user fee programs--we face many longer term challenges
to which we will have to find solutions in order to continue to
protect the consumer and to promote the public health.
----------------------------------------------------------------
FDA Challenges
--New Scientific Knowledge
--Xenotransplantation
--Genetic Revolution
--Tissue/Biomaterial Engineering
--Microsurgery
--Cell Biology
--Public Access to Useful Health Information
--Partnership with the International Community
----------------------------------------------------------------
These challenges include the need to appreciate and utilize
the rapidly growing scientific information with which we are
confronted, to make meaningful health facts more accessible to
the public and to their health care providers, and to advance
global efforts for harmonization and the sharing of public
health standards in order to safeguard the quality of imported
products regulated by FDA.
FDA faces a number of challenges. The greatest challenge is
to achieve these goals despite the fact that our workload will
continue to increase and that it will outstrip our resources.
Pragmatically, we recognize that it is not enough for us simply
to work harder; we must also work smarter and we must work more
effectively and cooperatively with others, especially our
sister agencies USDA, CDC, NIH, and the State and local
officials.
We believe that we can meet these challenges in the very
best tradition of our nine-decades-old agency, and more than
anything else, sir, we want to do so.
Again, we appreciate this opportunity to provide you with
this information and we certainly are ready to answer
questions.
Prepared Statement
Senator Cochran. Thank you very much, Dr. Friedman. We have
your complete statement and it will be made part of the record.
[The statement follows:]
Prepared Statement of Michael A. Friedman
Mr. Chairman, members of the Committee, I appreciate the
opportunity to appear before you and present the 1998 Food and Drug
Administration budget proposal.
As a background for our 1998 budget request, I would like to begin
with a description of the FDA's Congressional mandates and the
expectations of the American public, and how we are accomplishing our
mission.
fda's core missions
The American people have come to expect and rely on the FDA for
many services that contribute to their sense of security and enable
them to lead productive lives--protection of the safety and
wholesomeness of our food supply, maintenance of the high standards of
effectiveness and safety of our drugs and medical devices, and
assurance of the safety of our blood supply and vaccines, etc. We are
committed to upholding those standards and meeting those expectations.
The promotion and protection of the public health is our principal
mission. FDA's responsibilities annually cover more than $1 trillion
worth of products, many of which are vital for human health. Our
diverse activities include--but are not limited to--licensing blood
banks, monitoring clinical investigations, as well as reviewing and
approving prescription drugs, generic drugs, animal drugs, vaccines,
biologicals, medical devices, devices that emit X-rays, and food
additives.
Our mission, as the nation's oldest consumer protection agency, is
to provide the basic public health protection for the foods we eat and
the drugs we take. The assurance that FDA is present, everyday, doing
its job, is so fundamental to what we know and expect as public health
protection, that we almost take it for granted. Americans have the
luxury of not needing to worry about thousands of products including
breakfast cereal, pain relievers, contact lenses, vaccines, and cough
medicine.
When we inspect manufacturing establishments to make sure they use
the materials and processes necessary to produce safe and effective
products, and when we monitor imported products to make certain they
meet the same high standards as domestic products, we help sustain the
American public's confidence and peace of mind.
We have been protecting consumers against an ever-growing number of
potential public health risks for more than nine decades. As
significant advances are steadily made in science and technology, FDA
is continually presented with complex new questions, for which we are
committed to seeking and finding new answers. At the same time, we are
also committed to improving the FDA's many operations so that all of
its work is done as efficiently and effectively as possible.
In this testimony, I would like to summarize some of our recent
achievements and actions that have enabled us to protect and promote
the public health more effectively than ever before, and to describe
some future opportunities and challenges.
drug approvals
Recently, no area of FDA's responsibility has been more closely
scrutinized by Congress, industry, health professionals and the public
than the approval process for new drugs--or, more specifically, the
speed with which new therapies of proven effectiveness and safety are
made available to those who need them.
Let me therefore begin this report by citing our most recent
achievements under the Prescription Drug User Fee Act of 1992. As you
know, PDUFA has given us additional resources in exchange for our
commitment to meet demanding review goal deadlines without sacrificing
high public health standards. This important five-year authorization
will expire later this year.
After more than four years' experience with PDUFA, there is no
doubt that this approach works. The Agency has consistently succeeded
in meeting its annual performance goals--in fact, it has exceeded them
in almost every category. When combined with our internal management
initiatives, the additional resources provided by PDUFA bring important
products to patients with unprecedented speed and assurance.
Last year's record of drug approvals by the Center for Drug
Evaluation and Research (CDER) illustrates why reauthorization of PDUFA
is a top priority for FDA.
All drugs approved by FDA are important, but perhaps none are as
meaningful in bringing new hope to patients as new molecular entities
(NME's). These are products that include active ingredients never
before marketed in this country. The number of NME's approved each year
is regarded as one indication of real and meaningful medical progress.
Last year, that progress was exceptional: FDA approved 53 NME's
submitted by the pharmaceutical industry, nearly twice as many as the
year before.
Let me put last year's figures into perspective by referring back
to the passage of the Kefauver-Harris amendments. The average annual
total of NME's in the decade of the 1960's was 13.7. In the 1970's, the
corresponding figure went up to 17.3. In the 1980's, the average was
21.7 NME's, and in the first half of this decade, the average was 25.6
NME's. In 1996, the 53 NME approvals were a doubling.
Last year's approvals also were much faster than in the past. In
the late 1980's, the median times for NME approval approached 30
months. The median time to approval for the 53 drugs approved in
calendar year 1996 was 14.3 months, less than half the time it took as
recently as the late 1980's. [Chart 1]
New cancer drugs approved last year were notable for their
effectiveness against a broad spectrum of cancers: Hycamtin is used for
the treatment of patients with metastatic carcinoma of the ovary;
Camptosar for those with colorectal cancer; Taxotere for women with
advanced breast cancer; Gemzar for patients with cancer of the
pancreas; and Nilutamide for men with cancer of the prostate.
The NME category also included Accolate, the first of a new class
of drugs for asthma sufferers; Aricept, the second treatment for
patients with Alzheimer's disease; and Copaxone, a treatment for those
with relapsing-remitting multiple sclerosis.
Nine of the NME's approved last year, including two drugs for
cancer and three for HIV, were approved in six months or less.
Crixivan, a protease inhibitor for the treatment of HIV, was approved
in just 1.4 months. Twelve of the NME's, including three protease
inhibitors, were developed--from the first commercial Investigational
New Drug submission to marketing approval--in less than six years.
Moreover, the total number of new drugs and biological products--
including NME's--approved in the last calendar year was 139, which is
63 percent more than the total the year before. [Charts 2-3] New Drug
Applications (NDA's) accounted for 131 of these products, and their
median time to approval was 15.4 months, 7 percent faster than the 16.5
months the year before.
biologics and blood safety
Our Center for Biologics Evaluation and Research (CBER) last year
made decisions that represent important contributions to the safety of
the blood supply, including two new test kits for the detection of HIV
infection. One of these kits is designed for screening of donated blood
for HIV-1 antigen, a substance that in most cases is detected before
the virus antibodies. By reducing the so-called ``window'' period, when
donors may be HIV-infected but their tests are still negative for HIV
antibodies, the antigen screening could prevent an estimated 5-10
transfusions of HIV-infected blood a year.
The other HIV test kit approved last year was the first system that
includes collection of blood samples at home. It was developed to
facilitate blood testing by the more than 60 percent of Americans who
are at risk of HIV, but do not visit a medical facility to have their
health status checked. In addition, FDA also approved the Amplicore
HIV-1 monitor test, the first test approved for the quantification of
the HIV-1 virus in human blood.
In all, CBER last year completed 17 major biological approvals, as
compared with 12 such approvals the year before. Last year's major
biological approvals included Raspigam, the first medication to protect
infants against respiratory syncytial virus, a potentially fatal
disease; Avonex, the second interferon product for multiple sclerosis;
and Verluma, a new diagnostic imaging agent that can determine the
extent of small cell cancer in different parts of the body at one time.
The median approval time for the 17 biological products was 14.9
months, 15 percent faster than in 1995.
The public health has also been well served by the approval of the
acellular pertussis vaccine, which is safer than the traditional whole-
cell pertussis vaccines. Another notable approval, issued earlier this
year, was for a new recombinant Factor IX for treating people with
Factor IX deficiency hemophilia. This product does not contain any
pooled plasma derived proteins, and therefore presents no risk of
transmitting viral infection.
comparison with foreign regulatory bodies
There are many other ways to measure our performance in drug
review. One of them--which is frequently used by the media and some
critics of our Agency--is comparing our performance with that of our
counterparts abroad.
We have checked this performance gauge before, and last year we
took another look, this time by comparing all new drugs that were
approved last year by both the FDA and the new centralized drug
approval process of the European Union. There were 15 of such drugs,
and their median time for FDA review and marketing approval was 5.8
months. The median time for review by the Committee for Proprietary
Medicinal Products and final EU authorization for a company to sell
those 15 common drugs in Europe was 12.2 months. In four instances, the
EU authorization came first--in one case, just three days ahead of FDA.
In 11 instances, the drugs were first approved in the U.S.
These results are another illustration of FDA's commitment to
improve the quality of life of citizens. Nonetheless, our goal is not
to compete with any foreign regulatory authority, but rather with time
itself. Our goal is to continue to challenge ourselves to constantly
improve our own performance--patients, those that care for them,
everyone expects no less.
While these improvements could not have been made without the
resources added by PDUFA, there has also been a concerted effort to
streamline and optimize our entire management system. A substantial
reorganization of parts of the Agency has been taking place in the last
few years. As a result, all FDA Centers last year achieved notable
results.
medical devices
As a striking example, the Center for Devices and Radiological
Health (CDRH) improved its premarket approval reviews (PMA's) while
maintaining the review times for abbreviated application--510(k)s. This
latter category of applications--which accounts for the vast majority
of all submissions to CDRH--covers devices that are substantially
equivalent to devices already on the market. In fiscal year 1996, CDRH
approved 43 PMA's, a six year high, and 24 major new products, an all-
time high. [Chart 4]
One of the notable products approved in 1996 was the Thoratec
Ventricular Assist Device System that serves as a bridge to cardiac
transplantation. The Center also approved many first-of-a-kind products
such as the Ultramark 9 High Definition Ultrasound System, an aid in
differentiating benign from malignant breast lesions; the Seprafilm
Bioresorbable Membrane, used for reduction of postsurgical adhesion;
and the Reliance Urinary Control Insert, a device intended for the
management of stress urinary incontinence in adult women. [Chart 5]
Eight of the 15 PMA's submitted to the agency in the first half of
fiscal year 1996, received a first action within the 180-day deadline.
This was a significantly better performance than in 1994 or 1995.
Even though we are approving more PMA's for increasingly complex
devices, and we have improved the time to first action, the PMA
approval time is coming down only slowly. It takes too long--more than
two years--to complete the entire process. CDRH and the agency are
focusing now on innovative ways of bringing down the PMA review times,
just as we have done for NDA's. But, here again, much depends on the
level of resources available to do the work.
CDRH has also successfully managed the review times for 510(k)
applications. In fiscal year 1996, the median review time for these
devices that received a finding of substantial equivalence was 85 days.
At their peak in 1993, the reviews were almost 70 percent longer--144
days. Even accounting for applications that had to be returned to the
manufacturer for more information, the average 510(k) review time in
fiscal year 1996 was 110 days, down from the peak of 184 days in fiscal
year 1994. Overall, CDRH has done a remarkable job in solving review
problems that had plagued the Center for years. They have significantly
shortened review times without sacrificing the increased scientific and
medical rigor of the reviews. We are not satisfied with our
performance, but we are steadily moving in the right direction. [Chart
6]
We also take real satisfaction in the high standards for
mammography facilities achieved under the Mammography Quality Standards
Act (MQSA) of 1992. Since the law was passed CDRH, working with the
American College of Radiology and state authorities, has set standards,
and inspected and certified more than 10,000 facilities. The first
year's inspections after the program went into effect showed that 80
percent of the facilities had only minor violations, if any at all. A
recent report by the General Accounting Office found that second-year
inspections revealed ``considerable reduction in the proportion of
facilities'' with violations.
The performance of our drug and device Centers deserves special
attention because of the public health importance of their work, and
high interest in their achievements. Other FDA Centers, however, also
had results last year that reflected gains in efficiency and positive
effects on the public health.
food and veterinary medicine
The Center for Food Safety and Applied Nutrition (CFSAN) has
implemented several initiatives to speed up the food additive petition
review process and reduce the inventory of pending petitions. The
Center brought in scientists from other program areas; allocated
additional resources to modernize its electronic information processing
infrastructure, and to contract the technical services of ``third
party'' reviewers; instituted changes in its Office of Premarket
Approval to better respond to legislative mandate and industry demands;
and used various means--from one-on-one meetings to the World Wide
Web--to provide guidance to petitioners on how to improve the quality
of their submissions to the Agency.
The effort has paid off in reduced petition inventory and faster
reviews. In June, 1995, there were 295 petitions in the CFSAN
inventory, including food and color additive petitions, GRAS
affirmation petitions, and citizen petitions. By the end of last fiscal
year, the Center had received an additional 82 petitions, but the
inventory was 60 petitions below the total in June 1995. During
calendar year 1996, CFSAN took final action on 88 petitions, 54 of
which were approvals--the highest number in any year in a decade.
[Chart 7] Moreover, the median time from receipt to approval of food
and color additive petitions decreased from 37 months for petitions
approved in fiscal year 1993 to 27 months for petitions approved in the
last fiscal year. Again, we have not yet achieved the results we want,
but we are continuing to advance toward them.
CFSAN has also authorized health claims providing information on
the relationship between food components and health. Last year, FDA
issued a final rule covering health claims that associate adequate
dietary intake of folic acid and the reduced risk of neural tube birth
defects, which in this country affect approximately 2500 children each
year. In August, 1996, a claim was authorized on the relationship
between sugar alcohols and reduced risk of dental caries. In January,
1997, the Agency authorized health claims stating that foods containing
soluble fiber from whole oats may under certain circumstances reduce
the risk of heart disease.
Our Center for Veterinary Medicine has been working closely with
animal drug manufacturers, producers, and veterinarians designing a new
and more flexible animal drug approval process that reduces the time
and cost necessary for meeting the requirements for a new animal drug
approval. [Chart 8] Full implementation of the changes was made
possible by the enactment of the Animal Drug Availability Act of 1996.
Among other improvements, the ADAA eliminates the need for dose
titration and optimization, and provides the Agency with the latitude
to redefine the statutory term ``substantial evidence'' of drug
effectiveness. The changes are evidence of the remarkable achievements
that become possible when government and the private sector work
together.
achievements of the office of regulatory affairs
One of the most demanding tasks of our Office of Regulatory
Affairs, whose inspectors and investigators operate in offices
throughout the United States and Puerto Rico, is surveillance of the
rapidly mounting number of imports of FDA-regulated products. While the
number of our port-of-entry personnel has increased by only 285, the
number of shipments with products within FDA purview has increased from
500,000 in 1970 to nearly 3.7 million last year.
Last year, ORA began implementing a new automated system--called
Operational and Administrative System for Import Support (OASIS)--that
greatly speeds up FDA's handling and clearance of imported products by
maintaining electronic communications between the agency and the
brokers. With OASIS, the broker receives FDA's initial admissibility
determination on every shipment within eight minutes after the broker
submits the necessary data to the agency. For eight out of ten
shipments, the initial FDA clearance is final. The paper-less system,
whose implementation will be completed by the end of September, will
cover every U.S. port of entry where FDA-regulated products arrive by
sea, land and air.
Another major responsibility of ORA's regional, district and field
offices and laboratories is to maintain a round-the-clock vigilance
against hazards to the public health. A typical example of this
demanding duty is the recent action by FDA's field office in Los
Angeles against several products that were supposed to be mildly
intoxicating but instead were implicated in cases of nausea, vomiting
and respiratory arrest among mostly young people who had ingested them
at a New Year's Eve concert.
FDA field office launched investigation within hours after the
incident, and on January 1, we issued a public statement warning
consumers against the so-called ``fX'' products--"CHERRY fX BOMBS,''
``LEMON fX DROPS'' and ``ORANGE fX RUSH''--which apparently had been
distributed for free to the concert goers. Subsequently, FDA took
possession of more than 9,000 vials with the fX potion and notified the
distributor that the products present an unreasonable risk of illness
or injury to those who consume them.
Mr. Chairman, I have mentioned the highlights of FDA's performance
last year as evidence that our agency is dedicated to its public health
mission, competently staffed, and steadily advancing in its scientific
skills while introducing flexible, less burdensome but no less valid
regulatory procedures.
We have taken important strides forward, and we are well positioned
to make even more effective use of day-to-day operating resources as
well as to strategically plan for managing new responsibilities.
In addition to our important ongoing efforts, there are three major
tasks that we perceive to be fundamental for the fulfillment of our
public health mission in fiscal year 1998.
First of all, we must implement--in cooperation with federal, state
and local public health authorities--the Administration's food safety
initiative.
food safety initiative
Americans rightfully expect their food to be wholesome and safe,
and with rare exceptions, it is. We know, however, that problems do
exist. According to the Council for Agricultural Science and
Technology, up to 33 million foodborne illnesses occur each year, and
as many as 9,000 people--mostly the very young and the elderly--die as
a result.
Hospital stays associated with microbial foodborne illnesses are
estimated to cost more than $3 billion a year, and the estimated total
expenditures due to foodborne illnesses are at least $5.6 billion.
These costs, both in lives and economic consequences, are unacceptable.
Last year's outbreak of E. coli 0157:H7 contaminated apple juice on
the West coast is another example of why we need to improve our system
for protecting food. We were first alerted when one of our food
scientists spotted on the Internet a reference to a previously
unreported E. coli outbreak in the state of Washington. After a
diligent inquiry he found the person associated with the Internet
notice--a University of Washington physician who had uncovered a
cluster of patients with Hemolytic Uremic Syndrome, an extremely
serious illness caused by E. coli in which blood cells dissolve and the
kidneys suffer severe damage.
The first clue to the cause of the outbreak was provided by state
and local officials in Seattle who had interviewed the patients and
found that they all had consumed the same brand of apple juice. Samples
of the suspected product were brought to FDA's Seattle laboratory,
which began testing them for the presence of E. coli 0157:H7.
Commissioner Kessler was notified and he initiated a conference
call beginning at 9 o'clock that night with experts from FDA, CDC,
state and local health authorities, and representatives of the
manufacturer. After the call was concluded, at 4 a.m., the manufacturer
of the apple juice recalled all of the already distributed contaminated
products, and a press release was issued warning the public against
consuming the juice they had already bought. As a result of this rapid
intervention, the outbreak was limited to 66 Americans and Canadians.
Tragically, one of them--a little girl in Colorado--died of
complications of this foodborne disease.
We were able to help contain this outbreak thanks to the fast
reaction and cooperation from federal, state, and local public health
officials as well as from the juice manufacturer, who instituted an
immediate recall of the unsold products and warned the public against
consuming the juice they had already bought.
But we also were fortunate. First, Kings County in Washington has a
disease surveillance system similar to the FoodNet system supported by
CDC, FDA, and USDA. If the same outbreak had taken place in other areas
of the country, we might not have made the connection until many more
people had become ill.
Second, Federal health officials took charge of the situation
rapidly and received prompt cooperation from all the relevant federal,
state, local and industry participants in the incident. But this was a
fairly exceptional experience. For the emergencies that take place
under less favorable circumstances, we need to have effective and
consistent coordination in place before the outbreak takes place.
Similarly, if we knew more precisely how this deadly form of E.
coli grows and multiplies, how it infects the food and how it is
transmitted to humans, we could act more quickly and decisively when
events of this sort take place. Our research and risk assessment work
will bring us closer to the knowledge we need to devise educational
programs to teach consumers and food processors how to avoid and combat
such contaminants. And we must have additional inspectors if we are to
ensure that food safety standards are being met.
In recent years, we have taken several significant steps to improve
food safety. We are now implementing the Hazard Analysis and Critical
Control Point (HACCP) system for seafood, and the U.S. Department of
Agriculture is doing the same for meat and poultry. FDA and USDA have
supported the efforts of the Centers for Disease Control and Prevention
to create a system of FoodNet Sites for identifying disease outbreaks.
And Congress enacted new legislation last year aimed at protecting the
public--particularly children--from pesticides. But our system is still
largely outmoded, and it is time to bring food safety into the
contemporary world of automation and modern science.
We are therefore asking your support for new resources to carry out
FDA's share in the Administration's food safety initiative which is
described in detail in the budget.
prevention of tobacco use by minors
A second major task is our public health and legal obligation to
protect our most vulnerable population--our youth--against the
devastating effects of tobacco.
For the past three years, our agency conducted an extensive
investigation into public health aspects of the use of tobacco, which
kills more than 400,000 Americans each year--more than acquired immune
deficiency syndrome, alcohol, car accidents, murders, suicides, illegal
drugs, and fires combined.
We found evidence that nicotine is addictive; that it produces
pharmacological effects which are the primary reason why people use
tobacco; and that manufacturers know these facts.
The most striking discovery, however, was the overwhelming evidence
that the enormous public health burden linked with tobacco products
originates when the users are young, a stage of life that's most
carefree and susceptible to risk-taking. Eighty-two percent of adults
with any history of smoking had their first cigarette before the age of
18, and more than half of them had already become regular smokers by
that age.
Each year, one million youngsters in this country become regular
smokers--and one-third of them will die prematurely of lung cancer,
emphysema, and similar diseases linked to their addiction. About three
million of our adolescents smoke, and another one million boys use
smokeless tobacco. Tobacco use and nicotine addiction can be properly
called a ``pediatric disease.''
Based on these findings, FDA last year determined that it has
jurisdiction over cigarettes and other tobacco products, and issued
regulations restricting their sale and distribution to children and
adolescents.
This year, we--together with our sister public health agencies and
state and local authorities--are embarking on an enforcement program
designed to reduce young people's use of tobacco products by 50 percent
in seven years. It is an enormous undertaking: despite the fact that it
is against the law in all 50 states to sell cigarettes and smokeless
tobacco to minors, our young people purchase an estimated 1.26 billion
dollars' worth of tobacco products each year. Recent surveys have shown
that adolescent smoking, after several years of decline, is again on
the rise.
As a public health agency we feel a deep obligation to see this
program carried out. Earlier, I mentioned our implementation of the
Mammography Quality Standards Act, the most important advance in the
public health protection for the nation's women. Protecting their
children--our youth--from nicotine and tobacco is an equally urgent and
deserving task whose future benefits will far outweigh the current
funding needs.
pdufa and mqsa reauthorization
Our third important task is to achieve reauthorization of two user
fee programs--PDUFA and MQSA, both of which expire on October 1 of this
year. Both of these programs set demanding performance goals and
provided the additional resources necessary to accomplish the agreed-
upon objectives. As I have discussed earlier, the principle of linking
higher productivity, through performance measures and goals, and the
collection of user fees to finance specific program activities has been
a success, and there are important oportuniites for these existing
programs. The Administration has proposed expanding the use of that
principle to other FDA activities which I will address in more detail
shortly.
three long-range challenges
Beyond these immediate tasks, FDA faces longer-term challenges for
which we must find solutions if this country's public health is to
continue to be as well served as Americans expect and merit.
One of the most demanding problems--as well as the greatest
opportunity--is the prodigious outpouring of new scientific knowledge
that directly impacts on our responsibilities as a public health
agency. Scientific information is growing far more rapidly than could
be foreseen even a decade ago, and the sheer volume of new insights is
nearly unimaginable.
While our agency scientists, such as those at the National Center
for Toxicological Research, are hard at work to keep abreast of these
developments, we face a constantly expanding task. At any particular
moment, we have to be thoroughly competent in understanding such
disparate issues as the biology of genetically altered tomatoes, the
safety and effectiveness of eye surgery with a laser beam, and the
effectiveness and side effects of new unique classes of highly toxic
drugs. Our mission involves therapeutics, restoratives, diagnostics,
nutritionals, and many other scientific disciplines whose complexity is
constantly growing. We must devise additional ways of making the best
use of the cutting edge of new knowledge. In order to properly oversee
the translation of basic science observations to applied practical
application, we must have this facility.
Another challenge we will have to meet is improving accessibility
to meaningful health information. Accurate product information is
absolutely vital to patients and health care professionals. In many
ways, information is our new currency. Having a new drug or a new food
or a new medical device, without having the information how to use it
properly or safely, is to no one's advantage. We must struggle not just
to get new products on the market, but to make sure that there is
information about their benefits and risks, so that the health care
provider and individual can make informed decision about proper use. We
have learned from our experience with the new food label and with
prescription drug information leaflets that well-presented and
accessible information may be the most powerful tool we have to improve
the public health. With the cooperation of the industry, we are about
to institute major improvements in the labeling of non-prescription
drugs, but more remains to be done.
Finally, I must include one more important long-range challenge
that FDA has to address in order to continue maintaining this country's
traditional standards. With the globalization of manufacturing, trade,
and consumption, members of the international community--including
ourselves--recognize the value of harmonized regulatory standards and,
possibly, shared compliance surveillance. It is our only realistic
option for ensuring the standards of foreign-made regulated products,
whose imports to this country have increased seven-fold in the last 25
years.
For FDA, this is an expanding mission that calls for the
development of international contacts, knowhow and negotiating skills
within a scientific framework. Moreover, we find that--as one of the
world's oldest consumer protection agencies--we are expected to do our
full share. To advance our country's national interests, we are doing
our best to meet these expectations.
A good example of our contribution is the International Conference
on Harmonization of Technical Requirements for Registration of
Pharmaceuticals for Human Use (ICH), the most important international
effort in the regulatory field that seeks to harmonize submission data
for drugs in the U.S., Europe and Japan. Less than five years' old, ICH
is completing the adoption of more than 40 consensus guidelines, many
of which are based on our standards. We also are providing leadership
for similar international efforts to harmonize the standards for
veterinary drugs, and for medical devices.
All of these challenges are even more formidable because we realize
that the growth of our work load will continue to exceed our resources.
The prescription drug and medical device industries maintain a growth
rate of more than 8 percent a year, as measured by the value of
manufactured shipments. Research and development in the same industries
increases by more than 12 percent each year, and imports of all FDA-
regulated products are increasing at a rate greater than 7 percent a
year. We are determined to meet this challenge by increasing our
cooperation with others, whether in government, academia or industry;
by not only working hard but also by employing novel solutions when old
practices no longer meet the need.
budget outline
Turning to FDA's fiscal year 1998 budget, the Administration's
request is a total of $1,064,388,000, including $820,116,000 in budget
authority and $244,272,000 in user fees. A total program level of this
amount will enable us to carry out the core activities of premarket
review and postmarket surveillance as well as move forward with new
initiatives to promote and protect the health of the American people.
Food Safety Initiatives--$24 Million
For FDA's portion of the collaborative effort with CDC, EPA, and
USDA, we are requesting $24,000,000 to begin implementation of
activities aimed at reducing the incidence of foodborne illnesses and
resultant economic losses by enhancing the safety of the nation's food
supply. This funding would provide the elements pivotal to food safety
such as seafood inspection efforts, consumer and industry education
(particularly at the retail level), surveillance, including in
particular the establishment of a new national early warning system for
outbreaks of foodborne disease, risk assessment and research. The
activities would lay a foundation of cooperation and communication to
rapidly deal with emerging public health hazards.
Youth Tobacco Prevention Initiative--$34 Million
On August 23, 1996, President Clinton approved FDA's final rule
that limits the availability and appeal of tobacco products to
adolescents. For our part of this effort, FDA's budget request includes
$34,000,000 for the costs associated with implementing this regulation.
The funding will be used for outreach to retailers, manufacturers,
state and local officials and communities, and enforcement and program
evaluation.
Buildings and Facilities--$14.6 Million
The budget request includes $14,550,000 for the second phase of
construction of the Arkansas Regional Laboratory facility for FDA's
field operation in Jefferson, Arkansas. Construction of this laboratory
is a cornerstone of FDA's Field Lab Consolidation Plan, and will
provide state-of-the-art analytical services that are currently carried
out at four laboratory facilities.
User Fees--$244.3 Million
A total of $244,272,000 is proposed in the budget for user fees.
The proposal includes $91,204,000 in connection with the
reauthorization of the Prescription Drug User Fee Act of 1992 and
$13,966,000 in connection with the reauthorization of the Mammography
Quality Standards Act of 1992, both of which sunset on October 1, 1997.
The request also includes $7,459,000 in already authorized user fees
for export certification and the certification of insulin and color
additives.
In addition, the proposed budget includes new user fees of
$131,643,000. These new fees would partially cover premarket and
postmarket activities costs in most of FDA's major program areas--
foods, human drugs, biologics, animal drugs, and medical devices. These
industries derive great benefits from consumers' confidence in FDA's
review processes and product surveillance.
The Administration believes that FDA provides a vital public health
service by protecting consumers from unsafe and impure regulated
products, and that industry--which greatly benefits from FDA's
assurance of the quality of such products--should help pay for a
portion of the agency's costs. FDA will work with Congress and the
agency's many constituencies, including the regulated industries, to
implement the proposed fees in conjunction with agreed-upon performance
measures and goals that are linked with the provided resource levels.
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Biographical Sketch
michael a. friedman, m.d.
As Lead Deputy Commissioner, Michael A. Friedman, M.D. provides
leadership and management of high-priority Agency initiatives aimed at
addressing important public health issues. He oversees the work of the
FDA Centers and the field offices. He works in concert with the
Commissioner, the Center Directors, and the other Deputy Commissioners
to maximize the efficiency and effectiveness of the FDA's efforts. He
also represents the Agency in interaction with the public, other
Federal agencies and the regulated industry, and foreign governments on
issues related to the broad mission of the Food and Drug
Administration.
Dr. Friedman received a B.A. degree in English from Tulane
University, New Orleans, Louisiana in 1965 and an M.D. degree from the
University of Texas, Southwestern Medical School, Dallas, Texas in
1969. His postgraduate medical training was at Stanford University,
Stanford, California and the National Cancer Institute, Bethesda,
Maryland, and he has Board Certification in Internal Medicine and
Medical Oncology.
Prior to his October 1995 FDA appointment, Dr. Friedman served as
the Associate Director of the Cancer Therapy Evaluation Program from
1988-1995 and as Chief of the Clinical Investigation Branch from 1985-
1988 within the Division of Cancer Treatment at the National Cancer
Institute and the National Institutes of Health. From 1975 to 1983, Dr.
Friedman was a faculty member at the University of California San
Francisco Medical Center serving as an Associate Professor in the
Department of Medicine, and the Director of Clinical Affairs and the
Interim Director of their Cancer Research Institute. Dr. Friedman's
professional activities at the local and national level have included
appointment to the various posts in the American Society for Clinical
Oncology, as well as membership in the American Cancer Society,
American Society for Cancer Research and the Western Society for
Clinical Investigation. His scholarly activities include authorship of
numerous scientific articles and book chapters as well as editorial
board responsibilities for books and journals.
Dr. Friedman has been a career Public Health Service Commissioned
Corps member and currently holds the rank of an Assistant Surgeon
General. He has received the PHS Commendation Award in 1992, the EEO
Special Achievement Award in 1993, and the PHS Distinguished Service
Medal in 1997. He is a member of Phi Beta Kappa and Alpha Omega Alpha
honor societies.
User Fees
Senator Cochran. Dr. Friedman. I am going to ask a couple
of questions and then yield to my friend from Arkansas.
Let me ask you first of all about the user fees that are
contemplated in the budget submission. We notice that the total
is $131,643,000 for proposed user fees on subjects such as
foods, human drugs, biologics, animal drugs, and devices--all
new user fees. So your budget request is offset, in effect, to
the extent of almost $132 million by the assumption that user
fees will be authorized by Congress.
We do not have the power in this committee to authorize
those user fees. We are an appropriations committee and not a
legislative committee. So unless the legislative committees in
both Houses agree to recommend that and report legislation out
to do this and it is passed by both Houses and signed by the
President, we do not have the authority to direct that those
user fees be paid into the Treasury.
So what if the legislative committees do not approve this
offset? What are you going to do when we approve a budget that
is $132 million less than what you need because of the new user
fees you have requested? What is going to happen to your
functions and the contemplated things that you outline here
that you are going to use all this money for?
Dr. Friedman. It is a very important question, sir, and one
that we are focusing on. You recognize that this budget is an
attempt, along with other parts of Government, to deal with
everyone's interest in reducing the deficit and at the same
time providing a level of public health protection. We think
the bottomline figure that we have identified is fully
supportable and appropriate.
But to answer your question, if those funds, if that $132
million, is not available, the impact on the agency would be
very, very serious. Our ability to act in a timely way and in a
complete way on many of our activities would be seriously
compromised.
Senator Cochran. One thing that comes to our mind here is
that such a level of funding would be 8 percent below this
current year's level for FDA's ongoing activities.
Dr. Friedman. Yes, sir.
Senator Cochran. So to put it in perspective for everybody,
with this amount contemplated in new user fees----
Dr. Friedman. Sir, my understanding is it could be up to a
17-percent reduction. But the point you are making is exactly
the same, which is this is a large, serious impingement and
would have very dire consequences on all of our activities.
Tobacco Regulation Funding
Senator Cochran. Well, it will be an interesting set of
choices that you will have to make if those user fees are not
approved. For example, you are requesting increases for food
safety and tobacco youth prevention programs. When you add that
in, you get to about a 15- to 17-percent reduction below the
current year's funding level.
Well, my next question is on the tobacco regulation issue.
You mention the North Carolina case and the new authorities
that you have under the decision, and we know, as you suggest,
that that will be appealed and we do not know how that appeal
will be decided. But what is your view now about the impact
that that decision and the new regulatory powers you are
assuming for tobacco regulation, what the impact of that will
be on your budget needs for the next fiscal year?
Dr. Friedman. I believe, sir, that the budget needs for the
next fiscal year that we have outlined are still entirely
appropriate. I believe that the kind of program that we
envision, one which involves activities largely delegated to
States with a relatively small investment in activities within
the FDA here, not only is a prudent policy from a fiscal point
of view, but we think also is the most efficient way in which
to do this.
Senator Cochran. Well, if there will not be any impact on
those regulations, then you are going to have to shift money
from salaries and expenses or other parts of the budget to pay
for it unless the new user fees are approved, will you not?
Dr. Friedman. If we are able to achieve the bottomline
figure by working with your committee and others, by working
with industry, if we are able to achieve that total budgetary
figure, then we believe that there is a great deal that can be
accomplished for the public health. If it is a smaller number
than that, for whatever reason, then you are quite right, sir.
We will have to make some very difficult choices, not just with
respect to those programs, but other very important programs
that we are involved in.
Senator Cochran. Senator Bumpers.
User Fee Authorization
Senator Bumpers. Mr. Chairman, you certainly hit the nub of
the problem here and I will not pursue it except to ask you
this, Dr. Friedman. Have the authorizing committees approved
these new user fees?
Dr. Friedman. I will ask Mr. Byrd, if you would, please.
Senator Bumpers. Is that just in the generic legislation
that you have?
Mr. Byrd. There is generic legislation, but the authorizing
committees have not approved it as of this time.
Senator Bumpers. They have not?
Mr. Byrd. They are considering, but they have not approved
it.
Dr. Friedman. That is correct.
Senator Bumpers. So you are going to have to get that
authority before you can collect those fees, are you not?
Mr. Byrd. That is correct.
Dr. Friedman. That is correct, sir.
Senator Bumpers. Have you testified before the appropriate
committees on that issue?
Mr. Byrd. Yes.
Senator Bumpers. The authorizing committees?
Mr. Byrd. We have appeared before those committees.
Senator Bumpers. I am not sure I understand those user fees
well enough to state that I favor them or do not favor them.
But certainly I am really troubled, because I have been a
strong supporter of FDA. I want to support your budget. But I
just know the way things go around here. I mean, everything can
come unraveled in a moment's notice.
Dr. Friedman. It is a very difficult year in that regard,
sir, and we recognize that. Our job here is really twofold, in
a way. One is to show you that we are responsible and careful
managers and that what we are doing has value, and I think we
can certainly do that, and invite your questions in that
regard.
The second issue, the parallel issue, involves how the
Government will pay for all the important functions. You have
many competing interests that petition your attention and these
are worthwhile, good interests, and we understand what a
difficult job you have. This is not something that is unique to
us. It is true for many parts of the Government--USDA,
Transportation, Commerce, a number of parts of the Government.
All are wrestling with this same thing.
We recognize the difficulty of that and just want to work
as productively as we can with you in that regard, sir.
Senator Bumpers. Do you want to comment on that?
Mr. Byrd. Just, if I may, clarify a statement. A moment ago
I mentioned that in our appearances before the authorizing
committees we had discussed user fees. We have discussed PDUFA
with the authorizing committees, but we have not testified with
regard to this generic user fee bill yet. That user fee bill
has been submitted by the White House, but we have not
testified about that user fee bill at this time.
Senator Bumpers. What assurance, if any, do you have that
those committees will authorize these new fees?
Mr. Byrd. We have no assurance.
Senator Bumpers. I hate to say this, use this word--we have
ignored the authorizing committees sometimes on setting budgets
around here when we probably should not have. But there is
likely to be an outcry if we mark up this bill and we give you
the billion something you are requesting and it includes those
user fees, the chairmen of those authorizing committees may say
nothing or they may say a lot, and that could create a real
firestorm in the Senate, on the floor.
Dr. Friedman. We have certainly heard, sir, from a variety
of different groups their concerns or opposition to these fees,
and we know that those interests have made their concerns known
to various Members of Congress.
Arkansas Regional Laboratory
Senator Bumpers. Needless to say, Dr. Friedman, I have a
deep and abiding concern about NCTR, and you have asked for $14
million some, I think with last year's $13 million something,
to complete phase two.
Dr. Friedman. Correct, sir.
Senator Bumpers. Is that correct?
Dr. Friedman. Phase one is initiated. This $14 million
would be for phase two.
Senator Bumpers. And you feel comfortable that that amount
will be able to complete phase two?
Dr. Friedman. I have asked that question and have been
assured that that is very true, and that all of the scientific
and regulatory activities that we hope to nest within that new
facility are also moving to confluence on exactly the same
timetable. This represents a very important scientific-
regulatory fusion at that location. It is part of our field
reorganization and downsizing and consolidation, and I think
both the administrative, the scientific, and the physical, the
building itself, are all flowing together in an appropriate
way, sir.
Senator Bumpers. Phase one is under construction, is it
not?
Mr. Byrd. That is right, phase one is under construction.
Senator Bumpers. Do you have any idea what the phase three
costs will be?
Mr. Byrd. Phase three runs about $9.8 million. That is for
the administrative and office areas.
Senator Bumpers. Would you be asking for that money for
1999 or not?
Mr. Byrd. We probably will be asking for it in 1999.
Dr. Friedman. Yes.
Senator Bumpers. Have any field lab consolidations taken
place yet?
Mr. Byrd. Yes; we have started some field laboratory
consolidations. As Dr. Friedman mentioned, the consolidation
associated with the Arkansas regional laboratory will
consolidate six laboratories down into Arkansas, and that is
cost effective. We anticipate that that will save the agency
about $56 million over a 20-year period.
Senator Bumpers. You anticipated my next question.
Dr. Friedman. Not only that, but I believe that the group
that is most skilled at doing research and analyses for dioxin
has already moved down to the Arkansas facility, I believe from
Chicago. So there is real research, there is real collaboration
going on now, sir.
Senator Bumpers. I know that you have in the past 2 or 3
years had to reduce the FTE's at all of these labs. I thought
it was just NCTR, but I realize that is across the board now.
But I notice you are holding steady this year now.
Dr. Friedman. Yes.
Safety and Efficacy of Approvals
Senator Bumpers. Now, let me just make a topical comment on
that point, not just on that particular matter, but, for
example, I applaud your obviously tremendous efforts to approve
drugs and devices in a much more expeditious way than in the
past.
Let me just voice my concern. If you would care to comment
on it, by all means do. My concern is there has been tremendous
political pressure. I have sat in this committee year after
year and I have heard some of my colleagues browbeat Dr.
Kessler about speeding up the approval process. And while that
is a highly desirable goal, that standing alone is not a
justification.
If you can speed up the process and be as certain as you
would have otherwise if you had longer time, that is fine. But
I just want to say that this is one Senator who would really be
terribly disturbed to think that we were hastening the process
just in order to be as competitive with Germany and Italy and
some of the other countries who have a little faster approval
time than we do, or have had in the past. I do not know that
that exists any more.
And I know you have done a great job, as you pointed out
this morning and Dr. Kessler did last year, about approving new
items and drugs in a much more expeditious manner. But as I
say, I just want to be sure that these drugs are safe. I think
the ordinary citizen has no idea how much illness there is in
this country because of a misuse of drugs or because of side
effects that had not been anticipated, because two drugs do not
match with each other when you put them in your body. I think
that, as I say, I know from talking to doctors that is a
massive problem for them.
Dr. Friedman. If I may, let me respond with just a couple
of comments, sir. One is that the tension you describe is
exactly right. We recognize that no product is ever totally
safe and no product is ever totally effective, and so what we
must do is try and see developed and then promulgated
information about what risks and benefits a product offers to a
particular individual.
We want to provide excellent information, so that patients
can make choices, so that doctors can help patients make
choices, so that reimbursers and insurance companies can
reimburse appropriately for those choices. To the extent that
we are an information purveyor, that is a crucial role for us
in the future. That is based on science, and what we must do is
to try and integrate all the new science in the most effective
way possible.
We are balancing. We are dealing with this tension you
describe. We want to have as much of the information as we can,
but we do not want to be ponderous or delay getting an
important product to the public. We want to be as right as we
can be, but we cannot be perfect. We know that, and this is a
balance.
Please.
Mr. Schultz. If I could just add something, in the new drug
area it is important to distinguish between typical drugs that
are maybe at most slight advances over what is available and
truly breakthrough drugs for very sick people. In the first
area, which is the largest number and is what those charts
largely reflect, the theory of the Prescription Drug User Fee
Act was that the agency could go faster with more resources.
And I think we are very confident there has been no diminution
of the standards or of safety and efficacy. There are a lot of
difficult decisions and so on, but I think we are very
confident there has been no change.
The harder issue is where you have a drug for a disease
where there is nothing else available and at what point in time
do you give people access to that product? This does not tie
into so much the desire to speed up the approval as trying to
balance the issue of when do you have the right amount of
information to allow a company to promote a drug. And it is one
that has been debated and we worry about it, and I think we
share your concerns. We feel like we have struck the right
balance, but it needs to be continued to be discussed.
The other point I want to make is, some of these issues are
going to come up in terms of so-called FDA reform legislation
both for drugs and devices, and we share your concerns there as
well. We want to be very careful so that any legislation that
is enacted does not undercut the agency's ability to assure
safety and efficacy.
Medication Guides
Senator Bumpers. One further point, Mr. Chairman, and I
will conclude with this. Last year we had considerable debate
and discussion about FDA's role in developing these--I forget
what you call them. It is what they give you at the drugstore
about the contraindications of the drug and so on.
Dr. Friedman. Med guide, medication guide.
Senator Bumpers. Yes; last year I think we gave you some
authority, did we not, to elaborate and cooperate with the
pharmaceutical companies in developing those?
Dr. Friedman. That is right.
Mr. Schultz. You basically set up a system where there
would be a voluntary program until about the year 2000 with FDA
doing surveys and setting standards. But the market will be
allowed to work until 2000, and then at that point we are to
come and do a survey and see if 75 percent of people who buy
prescription drugs get adequate information. And then, if they
do not, you gave us authority to take action.
Senator Bumpers. OK.
Dr. Friedman. We think it is a very satisfactory proposal.
Senator Bumpers. You all are happy with that?
Dr. Friedman. Yes, sir.
Mr. Schultz. It is interesting. What happened is all the
different groups got together as a result of the legislation
and came up with a plan that then went to the Secretary, and
the Secretary adopted. So our sense is there is now, as a
result of the legislation, a much broader agreement on what the
right steps are.
Senator Bumpers. I am not critical of the pharmaceutical
companies. When you buy a prescription drug now you get one of
those things. They just peel them out of a computer. They are
extremely helpful. They may not be as comprehensive as they
ought to be. A layman has no earthly idea whether he is getting
all the information he needs on that or not. So I think when
FDA weighs in on it we will all feel just a tad safer on the
information we are getting being accurate.
Thank you very much, Mr. Chairman.
Blood Supply Safety
Senator Cochran. Thank you, Senator.
Last year, we provided direction to the Food and Drug
Administration to move forward aggressively, in consultation
with the Centers for Disease Control and Prevention, in taking
measurable steps to prevent and respond rapidly and effectively
to cases of viral and pathogenic contamination of blood
products. The hemophilia community remains on the frontline in
exposure to viruses contaminating our Nation's blood supply. We
still think the FDA needs to pursue all measures required to
assure safe blood products, including instituting a patient
notification and product recall and withdrawal system.
Last year, we discussed this in this budget hearing and we
were assured that there would be cooperation and action by the
FDA on this subject. There was a meeting held, but there has
been no action that I know of taken by the FDA to institute a
patient notification system. And a lot of questions that we
raised at that hearing are still unanswered.
It is my understanding that in November a meeting was held
with the National Hemophilia Foundation and others who were
interested to discuss these issues, but no further action to my
knowledge has been taken to develop a process to respond to the
concerns or to these cases.
Many of the issues this subcommittee sought to address last
year were identified in a 1995 report by the Institute of
Medicine entitled ``HIV and the Blood Supply.'' Two years
later, many of the concerns were cited in an extensive report
on FDA oversight of the blood supply completed by the General
Accounting Office. That report reinforces my concern that
serious confusion continues to exist over the informal system
of communication between FDA and manufacturers and
manufacturers and their distributors of blood products.
GAO recommended the publication of guidelines that clarify
FDA's intentions when issuing memoranda and other
communications to manufacturers and when recommending product
recall and withdrawal. It seems to me we have an ongoing
problem that is not being addressed in a vigorous and committed
way.
The question is, Can we expect the FDA to take any action
to develop a document, a well-defined guidance document, that
spells out the decisionmaking procedures for initiating a blood
product recall or withdrawal following an adverse event, and
when can we expect FDA to institute a patient notification
system that fully protects people with hemophilia and other
bleeding disorders, as well as the general public?
Dr. Friedman. I appreciate the chance to respond to this
really important question. We do take these very seriously and
I am pleased to give you updates and what has occurred since
last year.
Deputy Commissioner Mary Pendergast has been very involved
in this area and I would ask her to please begin.
Ms. Pendergast. Thank you, Senator. I would agree that you
raised a very important question. We have taken steps that
perhaps you are not aware of. In the first instance, we have
switched the organizational structure within the FDA as to how
to respond to instances where there is bacterial or viral
contamination of products. It is now handled by our field force
and by our Division of Emergency Operations. So the same kind
of emergency response team that we would have sent in because
of E. coli in apple juice will be triggered in the blood
industry as well. So we have a whole group of people, a
decisionmaking tree, a rapid mobilization response.
We have also given the lead authority for the initiation of
recalls to our field force. That is the way we do it in the
rest of the agency and we have moved the plasma fractionation
and blood industry model into our normal model, which is where
the field force has the responsibility for initiating recall
recommendations and following through.
We have met with industry. We have, shall we say, reminded
them in a very stern way of their obligations under our
longstanding rules that when there is a class 1 recall they
have an obligation to work with their distributors to get
information to the final consumer of the product. In the case
of plasma fractionation products, that would mean the users of
the product, the hemophiliacs.
We have met with the hemophiliac organizations, with the
national organization, the National Hemophilia Foundation and
the Committee of 10,000. We have met with each of them. We have
scheduled additional meetings to see what else we can do.
We have put all FDA recalls of blood and plasma products on
the Internet immediately, on a fax-on-demand system, and on
another system where you can call in and get the information.
We are also forcing the companies to take more seriously
their obligation to immediately classify these situations as a
recall. When you call it a recall, everyone knows, whether it
is patient, doctor, or distributor, that there is something
potentially wrong with the product. For too long the companies
were calling these voluntary market withdrawals, giving people
the false sense that there was nothing wrong with the product.
We have gotten much stricter in terms of holding the companies'
feet to the fire to make sure that at the first instance they
correctly characterize these situations as a recall.
So we are taking steps and we will continue to do so with
the appropriate consumer and other groups.
Senator Cochran. Thank you very much. I am encouraged by
that report, and I hope that you have an opportunity to put
that in a form that we can make available to those who have
called us and written us complaining that they do not think
enough has been done. This does seem to be an important step in
the right direction and we appreciate that very much.
Ms. Pendergast. Thank you.
Lou Gehrig's Disease
Senator Cochran. There is also a continuing concern about
amyotrophic lateral sclerosis [ALS], a fatal neurological
disorder known as Lou Gehrig's disease. Approximately 20,000
Americans, I am told, are affected. The NIH recently discovered
that an inherited form of ALS involves a gene that produces
aberrant forms of superoxide dismutase. I ought to check that
out, how to say it.
Dr. Friedman. You said it perfectly.
Senator Cochran. It has come to my attention that the FDA's
Peripheral and Central Nervous System Drugs Advisory Committee
will conduct a hearing on May 8 on a new drug application for
Amyotrophin which may be helpful to ALS patients.
My reason for bringing this up is to try to bring this to
the attention of the highest levels of the FDA and encourage
you to look very carefully at any new drug applications and to
tell us, if you can now, what your expectations are for the
approval of drugs that are approaching the stage where they can
be approved by FDA to deal with this very serious and
debilitating disease.
Dr. Friedman. You are quite right, Mr. Chairman, this is
really a devastating disease and a disease that is not
satisfactorily treated with current products. The agency did
approve a product recently and that was an important first
step, but this was not an entirely satisfactory product. It
does not cure the disease. The patients still have an
inexorable course that we are unsatisfied with.
It would be inappropriate to predict how the advisory
committee will act on that, and I know you are not asking for
that at all. What I can tell you is that these are the sorts of
diseases, sorts of situations, where the agency is most
committed to working with patient groups and companies to
generate the clinical data as rapidly and completely as
possible, so that products can be approved for these
situations.
There has been a considerable amount of discussion about
the testing of this product in the past and the data in the
past have not been entirely consistent, sometimes looking
favorable, sometimes not. I think that there is information
that will be reviewed at this meeting that will be very
important.
Accounting for PDUFA Funds
Senator Cochran. I know that we have on the books a law
that permits user fees to be collected for pharmaceutical
applications, licensing, and other activities to, in effect,
accelerate and avoid delays from occurring through FDA's
system. That is up for reauthorization and we are encouraging
our friends on the legislative committee to look at that and
provide new authority to continue that program. The industry
seems anxious to see that is continued as well.
I would hate to get in a position to know that the FDA is
taking money from that process and using it to check ID's of
27-year-olds who are buying tobacco products. That is part of,
as I understand, your tobacco regulatory procedure. I am
hearing from people who own grocery stores, who own other
businesses where tobacco products are sold, and they hear about
this new regulation that you are going to enforce, requiring
them to check the ID's of anybody who is 27 years old or
younger?
Dr. Friedman. You ask two important----
Senator Cochran. Although the law applies to 18-year-olds.
Is that what I understand?
Dr. Friedman. You ask two important questions, sir. Let me
respond to the first one, and then I would ask Mr. Schultz to
please respond to the second.
Your point that there has to be scrupulously careful and
transparent accounting for funds is something that we
absolutely agree with and believe in. So that the whole purpose
of the user fee program was to have money allocated for review
functions identified and trackable for certain products, and we
have been very careful to make sure that those funds are used
only for those activities.
So one of the concerns you have--and it is a very
appropriate concern--is, as more pressure is placed on the
financial resources of the agency, can we continue to assure
this committee that we will be as careful and as scrupulous and
as transparent about our accounting as we have in the past? I
absolutely commit to that, sir. That is required by the law.
Expenditure Priorities
Senator Cochran. I do not want you to be that scrupulous,
because you have not been very scrupulous at all in my view. I
can show you where we have outlined in categories of importance
and priorities where we think the FDA dollars ought to be
spent, and then you come up and show us where you did spend
them and they are totally different from what we have outlined
in our bill and in our committee report.
That is one of the hardest things to get the FDA to do, and
that is to stick by its word on how it is going to use the
funds when we appropriate them, and even to the point of, I
think, callous disregard of the views of the Congress on where
the funds are appropriated, as to how the funds are spent by
FDA. We cannot find out how you are using the money. Until this
year, we could not find out what you are spending on rent. We
have a rental account and you also take money out of salaries
and expenses and spend it on rent.
I would like for you to tell us in the budget request, an
amendment, submit an amendment and tell us how much you need
next year for rental or office space expenses. We cannot find
that clearly indicated in the budget, and every year we get a
runaround when we try to find out these and other FDA costs.
Dr. Friedman. Sir, I am very sorry that there seems to be a
miscommunication on this. We very much want to be responsive to
your requests in this regard.
Each year we have submitted to Congress a formal accounting
of our user fee activities, and I thought that was the initial
thing that you were talking about. We very much would like to
meet with you or your staff or any members of the committee to
go through that in sufficient detail to be clear.
With respect to your second point, which is providing to
the committee in a format that you find useful and helpful the
information that you need to help make these decisions, let me
assure you, sir, that we very much want to do that.
Mr. Byrd wanted to comment.
Mr. Byrd. Yes, Senator Cochran; we have attempted to
provide the information that the committee has requested. We
have redesigned our submission to this committee for fiscal
year 1998 to identify the total required for rent. This total
is $69 million, $46 million provided by the General Services
Administration, and the remaining $23 million from salaries and
expenses. So we tried to provide the information that was
requested.
Dr. Friedman. But the point is, sir, this is not to say
that what we did was as helpful to you as you would like. What
is more important to convey is our willingness and interest. We
cannot ask you to make really hard decisions, we cannot ask you
to be as helpful to the agency and the public health as you can
be, if you feel like you are not getting the kind of
information that is most useful to you. So this is very
important to me.
Senator Cochran. I just have the impression that we are
being intentionally misled by this agency on the issue of the
budget. That is why last year we tried to spell out as clearly
as we could what our views were about how the funds that we
were appropriating should be spent in terms of emphasis,
program area and office. That accompanied the appropriation.
That has not seemed to work as well as we thought it might. So
I think your invitation----
Dr. Friedman. I am sorry.
Expenditure Priorities
Senator Cochran. I think your invitation for us to get
together, have staff meet and talk about this and go over in
some more detail our concerns and why I am a little aggravated
by it all--because I do not have this problem, I do not know of
this problem in any other agency under the jurisdiction of this
committee.
But FDA every year seems to delight, seems to delight,
frankly, in not cooperating in an open discussion of how funds
are being used or how they will be used in the future that are
appropriated by the committee.
So let us work on it.
Dr. Friedman. Thank you.
Senator Cochran. We cannot settle it right now, but I
appreciate your listening to me.
Dr. Friedman. I appreciate the depth of feeling about this
and the concerns that you are raising, and we take it very
seriously.
Senator Cochran. Well, I appreciate that. This is going to
be a tough year if we cannot get the reauthorization in a
timely manner of the prescription drug user fees, and if you
continue to assume things that you know are not going to
happen, like $132 million of new user fee authority. I do not
think I am exaggerating when I am saying that is really a ``pie
in the sky'' kind of assumption.
So what you are doing is you are putting this committee in
a position of having to reduce the funds that you say you have
got to have by $132 million. We do not have the authority to
grant you that request. And then you do not have any plan for
dealing with that. Where is it going to come from?
So we have got serious problems. This agency has got
serious problems, and that is another reason why I am
concerned. We want to be helpful. You have got immense
responsibilities under the law and by regulations you are
making some new ones. Interesting.
Mr. Schultz. Do you want us to talk a minute about the
tobacco, the 27-year-old requirement, that was the other part?
Senator Cochran. Not really.
Submitted Questions
There are others on the committee that may submit questions
and we hope you will respond to them in a timely way, and we
have additional questions as well that we will submit.
But let me thank you for your attendance and your
submission of your request to the committee and your response
to our questions today. Thank you very much.
Dr. Friedman. Thank you, sir.
[The following questions were not asked at the hearing, but
were submitted to the agency for response subsequent to the
hearing:]
Questions Submitted by Senator Cochran
food safety initiative
Question. The fiscal year 1998 request proposes a $24 million
increase over the fiscal year 1997 enacted level for the
Administration's Food Safety Initiative. Of this amount, $20 million is
for the FDA's Foods program and $4 million is for the Animal Drugs and
Feeds program. What specific activities will be undertaken with the
additional funds proposed for the Foods program and for the Animal
Drugs and Feeds program as part of the Administration's Food Safety
Initiative?
Answer. FDA is requesting $24 million in the fiscal year 1998
budget to begin implementation of a series of initiatives to reduce, to
the greatest extent possible, the annual incidence of foodborne illness
and resultant economic losses to consumers and industry by enhancing
the safety of the nation's food supply. Meeting this goal involves the
collaborative efforts of several agencies, including the Food and Drug
Administration, the Centers for Disease Control and Prevention, the
Environmental Protection Agency, and the United States Department of
Agriculture. The goal is in concert with the objectives of the HHS
strategic goals, Healthy People 2000, the CDC emerging infectious
diseases initiative, the Vice President's National Performance Review,
and the Office of Science Technology Policy's, ``Meeting the
Challenge,'' as well as other Presidential directives focused on
enhancing the health and well-being of children and the elderly. This
funding will provide for the initial steps toward achieving the long-
term national goal of reducing the annual incidence of foodborne
illness, and setting the groundwork for this multi-year, collaborative
undertaking.
The need for this initiative is constantly growing. Although the
U.S. food supply is unmatched in quantity and quality, foodborne
illnesses threaten public health and contribute significantly to the
escalating cost of health care. Of all the hazards associated with
foods, microbial hazards account for 90 percent of the confirmed
foodborne outbreaks and cases. Among the various contaminants that may
cause foodborne illness are E. coli 0157:H7, Salmonella enteritidis,
Campylobacter jejuni, Toxoplasma gondii, Cryptosporidium parvum,
Norwalk virus, and chemical hazards such as methyl mercury.
The Council for Agricultural Science and Technology--a private,
nonprofit scientific organization--estimated in its 1994 report
entitled, ``Foodborne Pathogens: Risks and Consequences,'' that between
6.5 and 33 million illnesses and up to 9,000 deaths occur every year in
the United States, because of microbial contamination of food. Chemical
hazards, on the other hand, more commonly cause chronic health effects,
which are difficult to estimate. Hospital stays associated with
microbial foodborne illnesses are estimated to cost society more than
$3 billion a year. The estimated total costs of foodborne illness are
at least $5.6 billion. Since foodborne chemical hazards often present
chronic rather than acute health threats, specific estimates of their
impact on health and the economy are not as readily available.
The costs of foodborne illness are borne by those who become ill
and their families, coworkers, and employers, as well as the food
industries, and taxpayers. Costs to stricken individuals include
medical bills, time lost from work, pain and inconvenience. Food
industry costs include possible product recalls, establishment closings
and cleanup, and higher premiums for product liability insurance.
Perhaps most costly in the long term is the loss of product reputation
and reduced demand when an outbreak occurs and is publicized. These and
other ``defensive'' industry costs of foodborne disease run in the
millions of dollars annually and are, for the most part, entirely
avoidable. Taxpayer costs include medical treatment for those who
cannot afford it and higher health insurance premiums.
One indicator of the breadth of the problem posed by foodborne
hazards is the increased number of FDA-regulated food product recalls
because of life threatening bacteria--Class I recalls due to microbial
contamination. The number of these recalls climbed from seventy-nine in
1988 to 378 in 1995. These recalls also impose an economic burden on
industry and consumers. FDA estimates that the total annual recall
costs for FDA-regulated products to industry and indirectly to
consumers are roughly $42 million.
Further, the food supply, as well as consumer tendencies and
preferences, is changing in many ways that could contribute to an
increased risk of foodborne illness. A generation of consumers who have
grown up with the freezer and a microwave, have neither the experience
or knowledge to always recognize or correct potentially hazardous food
handling and preparation behavior. Vulnerable populations, such as
immuno-compromised persons and the elderly, are continuing to grow in
size. By the year 2020, twenty-five percent of the U.S. population will
be sixty-five or older. Adding to this number are infants, hospitalized
people, individuals receiving immuno-suppressive treatments,
chronically ill people with diseases such as cirrhosis, and people
receiving antimicrobial therapies, such as antibiotics. Also, there are
approximately fifty to sixty thousand new cases of HIV/AIDs every year,
and the number of cancer patients has increased markedly in the last
twenty years. As a result, today, more than thirty million people are
likely to be at high risk from foodborne microorganisms. Microorganisms
are adapting to their environments, developing pathogenic
characteristics and resistances to conventional food preservation and
disinfection techniques that contribute to the incidence of foodborne
illness, and new pathogenic strains continue to emerge, such as S.
enteritidis phagetype 4. The food industry has evolved into a
relatively small number of large producers making it possible for a
contaminated product to be distributed nationally or even
internationally. Also, the number of retail establishments processing
foods on-site is growing rapidly.
In response to this growing problem, the Administration--through a
coordinated FDA and CDC, USDA, and EPA effort--is planning a Food
Safety Initiative to implement new, and bolster existing, food safety
intervention measures. These efforts represent involvement by the key
components of the Federal food safety system--Federal, State, and local
public health agencies--and integrate elements pivotal to food safety
such as surveillance, coordination, inspections, consumer and industry
education, risk assessment, and research. The range of planned
activities will lay a foundation of cooperation and communication to
rapidly deal with emerging public health hazards. The overall benefit
and outcome of this initial phase of the national Food Safety
Initiative will be reduced incidences of foodborne illness and all of
the benefits that carries with it, such as reduced health care costs
for consumers and industry, reduced costs to industry in recalled
product and loss of reputation, reduced productivity losses, and
increased awareness and knowledge of appropriate behavior to combat
foodborne illness.
I will provide, for the record, a table which outlines the specific
activities and amount of funding for each.
[The information follows:]
Fiscal year 1998 budget--Food Safety Initiative
Foods Program:
Surveillance: Monitoring pathogen levels, support FoodNet
foodborne illness surveillance sites....................$1,660,000
Coordination of outbreak response......................... 550,000
Risk assessment: Risk assessment consortium, exposure
assessment.............................................. 3,950,000
Research: Analytical methods, pathogen control and
preventive techniques, food handling.................... 3,900,000
Inspections: Implement seafood HACCP, State partnerships,
Lab certification....................................... 7,870,000
Education: Consumer/retail education...................... 2,070,000
--------------------------------------------------------------
____________________________________________________
Subtotal, Foods.........................................20,000,000
==============================================================
____________________________________________________
Animal Drugs and Feeds Program:
Surveillance.............................................. 1,500,000
Research.................................................. 2,500,000
--------------------------------------------------------------
____________________________________________________
Subtotal, Animal Drugs and Feeds........................ 4,000,000
==============================================================
____________________________________________________
Total, FDA..............................................24,000,000
Surveillance ($3,160,000).--Surveillance and investigation of
foodborne disease are powerful ways to detect new foodborne disease
challenges, to determine what the specific food sources are, and to
learn how best to prevent foods from becoming contaminated in the first
place. The objectives of this funding are to: establish a new national
early warning system for outbreaks of foodborne disease, enhance
microbiologic monitoring and surveillance activities related to
pathogen reduction, and improve the monitoring of layer hens and bulk
liquid egg products for Salmonella contamination before pasteurization.
The effect of these efforts to detect foodborne illness outbreaks
in combination with intervention efforts, such as product recalls,
reduces the number of illnesses in the outbreak and generates health
benefits as shown for the 1993 outbreak of E. coli 0157:H7 in
hamburger. An estimated additional 800 illnesses were prevented because
an in-place surveillance system detected the outbreak, which quickly
triggered a recall of the implicated food and reduced the potential of
health care costs.
FDA will expand the ongoing national surveillance of antimicrobial
resistance from food producing animals to determine the impact of
antibiotic drug use in animals.
--FDA's Center for Veterinary Medicine (CVM) in coordination with
CDC, and USDA/ARS has developed a National Antimicrobial
Susceptibility Monitoring Program for Salmonella and E. coli
0157:H7 isolates from both animals and humans. This monitoring
program will be expanded with Food Safety Initiative, FSI,
funds to include additional surveillance sites, new sources of
isolates and Campylobacter isolates.
--FDA in collaboration with CDC and USDA will develop a protocol for
response activities and information dissemination as a result
of findings from the surveillance system.
--Immediate follow-up will include outbreak investigations and field
studies in response to ``red-flag'' events.
--FDA will develop a comprehensive education program to disseminate
the findings from the monitoring program to all stakeholders.
--FDA will initiate collaborative international technology exchange
and assist in the development of relevant international
databases.
Coordination ($550,000).--The goal of improved coordination of
foodborne illness response, particularly in emergencies, at federal,
state and local levels of government, is to ensure that responses are
rapid and effective, and ensure the best use of government resources,
while avoiding unnecessary duplication of effort.
The objective of this initial phase is to create, at the Federal
level, an emergency response system which improves existing channels of
communication and develops new lines of communication between the
Federal agencies responsible for investigating foodborne illness. FDA's
role in initiating control and prevention measures (e.g., working with
industry to remove implicated products from the market) is critical to
the success of any response system. As a result of the Federal-Level
Interagency Coordination Group managing responses and improving
communication of critical data and information, these efforts should
result in a more rapid identification of foodborne illness outbreaks
and implementation of control measures.
Risk Assessment ($3,950,000).--The goal of risk assessment is
improved health risk estimates associated with microbial and chemical
foodborne hazards to facilitate the development and evaluation of
surveillance plans, risk reduction strategies, regulations targeted to
specific hazards, implementation of HACCP practices, and research
programs to enhance food safety.
This initial phase will: 1) establish a Risk Assessment Consortium
to provide leadership, consistency, and transparency in risk
assessment; 2) improve data and modeling techniques to assess exposure
to microbial and chemical hazards, including animal drug residues, in
the food supply; 3) begin development of improved and more standardized
risk assessments to facilitate the ranking of food safety concerns to
provide for better health protection and more efficient utilization of
resources; and 4) provide a science-based level playing field in
support of U.S. positions in international trade.
Favorable outcomes would include providing a foundation for
developing better risk assessments, which would result in more focused
surveillance and research efforts, and regulatory initiatives. The
ultimate result is identification of trends in causes and sources of
foodborne illness, and development of methods to rapidly identify
specific sources in an outbreak. These two factors will shorten the
time to identify an outbreak and its source, speed control measures
into place, and prevent growth of the outbreak, illnesses and possible
deaths. Even modest improvements in the existing system can yield
potential savings to both industry and consumers of thousands, and even
millions of dollars.
Research ($6,400,000).--The goal of research initiatives is new,
improved tools, screening methods, and analytical methods to more
rapidly and accurately identify and characterize foodborne hazards,
evaluate the effectiveness of surveillance initiatives and control and
prevention strategies, conduct risk assessments, and verify
effectiveness of preventive techniques such as HACCP.
This initial phase will make available new, rapid, sensitive, and
accurate screening and analytical methods for microbial and chemical
hazards to do the following: detect and identify the source of
foodborne illness outbreaks in surveillance and monitoring activities;
verify critical control points in HACCP programs; support development
of educational materials; and provide scientific underpinning for the
execution of FDA monitoring, regulatory, and enforcement activities to
reduce the incidence of foodborne illness.
These efforts should enhance capability for identifying and
monitoring changes in microbial resistance to a wide range of factors
(e.g., heat, cold, acid, high salt), and develop/evaluate preventive
techniques for use during production, handling, distribution, and
storage processes, and enhance capability to detect and identify
microbial and chemical hazards in settings such as the processing
environment and in distribution. (This capability can be a basis for
formulating preventive strategies and verifying controls in HACCP
programs.) Further, this capability would improve the ability to detect
and identify resistant microorganisms and identify determinants that
may affect susceptibility and around which analytical methods and
preventive techniques, (such as new effective cleaning and disinfection
methods for facilities and heat-sensitive foods and new feed and food
processing parameters), may be designed. Finally, development of new or
improved screening and analytical methods to detect, identify, and
quantify microbial and chemical hazards will permit rapid execution of
the intertwined coordination, surveillance, inspection, education, and
risk assessment elements of an efficient, effective food safety
program.
Further, FDA will conduct research to better understand antibiotic
animal drug resistance to limit the impact of antibiotic resistance on
animal and human health:
--Identify and characterize the factors that led to the development
of multiple drug (antibiotic) resistance in foodborne pathogens
in farm and aquaculture animals;
--Investigate techniques for manipulating the microbial ecology of
the intestinal tract of agricultural and aquaculture animals to
prevent the development of antibiotic resistance or select for
nonresistance.
FDA will expand research in the areas of prevention, reduction, and
elimination of pathogens in animals and animal feeds. For
Campylobacter, Salmonella, Toxoplasma, E. coli 0157:H7, and other
Shiga-like toxin-producing E. coli, and Cryptosporidium, FDA and USDA,
often in partnership with universities and industry, will:
--Expand research into the microbial ecology of foodborne pathogens
and how initial colonization in animals can be prevented.
--Expand research on new methods to reduce or eliminate pathogenic
microorganisms and mycotoxins from agricultural and aquaculture
animals before slaughter or harvest, including the use of
probiotics.
--Initiate research to develop new techniques for eliminating animal
feeds as a source of foodborne pathogens.
Inspections ($7,870,000).--The goal of inspections is more
efficient and effective monitoring of the safety of the food supply.
This initial phase will: 1) more quickly implement the seafood
HACCP regulations, expand the use of HACCP systems to non-seafood
establishments, and work to apply HACCP principles to retail food
service operations, as well as to the slaughter of animals used for
food; 2) enhance Federal/State partnerships to ensure consistency in
inspection technique across Federal, State, and local levels, to better
coordinate with the States, and eliminate duplication of efforts; and
3) develop a laboratory certification program enabling private parties
to test samples of food for adherence to food safety regulations.
Education ($2,070,000).--The goal of education is to provide food
safety education programs and materials to change unsafe food handling
behavior used in the home and in retail and institutional food service
operations.
This initial phase will: 1) develop more effective methods for
providing food safety education materials and services to consumers and
to food service operations, especially those providing food to
populations at high risk in hospitals, nursing homes, assisted living
facilities, child day care, and senior day care; 2) develop and
initiate implementation of a national food safety education program for
all segments of the retail food industry using the concepts set forth
in the Food Code; 3) form an alliance, joining expertise of Federal,
State and local health agencies, industry, and professional and trade
associations to develop improved education activities on food safety
issues, promotion of the Food code and/or the food safety parameters;
and 4) develop education/communication techniques targeted to specific
groups to overcome current barriers to communicating appropriate food
safety behaviors to food service workers.
An estimated 50 million people are now reached with consumer
information, only some of which is safe food handling information. It
is anticipated that implementation of this phase of the initiative,
along with the other elements of the initiative, will result in a
significant increase in the number of consumers and food service
workers being reached with food safety messages. But, more importantly,
this initiative will target changed behavior as its goal rather than
information dissemination as previous education initiatives have done.
Question. What is the fiscal year 1997 level of funds for FDA's
food safety activities? Please indicate how much is currently being
spent by program.
Answer. The $24 million requested in the fiscal year 1998 budget
would provide increased funding to FDA's Foods and Animal Drugs and
Feeds programs, and their related field activities. For fiscal year
1997, the Foods program estimates expending nearly $194 million on
activities directly and indirectly related to the proposed Food Safety
Initiative in the areas of chemical and microbiological safety of
foods, and nutrient quality and food labeling. In the Animal Drugs and
Feeds program, $37.5 million is estimated to fund the traditional
activities of preapproval evaluation and monitoring of marketed drugs
and feeds which relate either directly or indirectly to the proposed
Food Safety Initiative.
Question. The President's Food Safety initiative is described to
involve the collaborative efforts of several agencies, including the
Environmental Protection Agency, the Center for Disease Control, and
the USDA. Does the success of this initiative rely on each of these
agencies receiving the funding increases requested in the President's
fiscal year 1998 budget?
Answer. The success of the initiative does depend upon each Agency
receiving the funding increases requested in the President's fiscal
year 1998 budget. The anticipated benefits and outcomes cannot be
achieved by implementing only one or a few of the elements. There are
many causes of foodborne illness, many points at which foods can become
contaminated, and many factors that make some groups of people more
susceptible than others. Therefore, no single measure alone could
ensure as completely, the safety of all foods. While minimal
improvements could be made with partial funding, the goals of reducing
the incidence of deaths and illnesses associated with foodborne
pathogens, as set forth in the Food Safety Initiative, could not be
achieved.
Question. The FDA justification indicates that ``The overall
benefit and outcome of this initial phase of the national Food Safety
Initiative is a reduced incidence of foodborne illness and all of the
resulting benefits such as reduced health care costs for consumers and
industry, lower costs to industry in recalled products and loss of
reputation, reduced productivity losses, and increased awareness and
knowledge of appropriate behavior to combat foodborne illness.'' How
will this initial phase of the Food Safety Initiative achieve the
benefits and outcomes you indicate and how will you measure your
success in these areas?
Answer. The goal of the Food Safety Initiative is to reduce the
incidence of foodborne illness to the greatest extent feasible. The
activities outlined in the initiative build on previous Administration
steps to modernize our food-safety programs and respond to emerging
challenges. Our understanding of many pathogens and how they
contaminate food is limited. For some contaminants, we do not know how
much must be present in food for there to be a risk of illness. For
others, we do not have the ability to detect their presence in foods.
The public health system in this country has had limited ability to
identify and track the causes of foodborne illness. Federal, state, and
local food safety agencies need to improve coordination for more
efficient and effective response to outbreaks of illness.
The fiscal year 1998 budget provides the first steps in achieving
the overall benefits and outcomes. The Administration will initiate a
strategic planning process to develop a plan for improving the food
safety system over the long term. The process will facilitate the
participation of all interested parties and provide extensive,
structured discussions to develop strategies for achieving change and
ways for measuring progress. We anticipate that over the long term
improved surveillance is going to result in higher, but more accurate,
outbreak numbers. Ultimately, progress and goal achievement can be
measured based on declines in the number of foodborne illnesses and
deaths, and declines in the number of outbreaks using the more accurate
figures. In addition, more effective prevention and intervention
programs, more rapid responses to outbreaks, increased inspection
coverage, changes in behavior, and better detection and quantification
methodologies, could all be measured as a means of determining the
effectiveness of our efforts.
Through this Food Safety Initiative, as well as other
Administration activities, the groundwork for planning future
activities will be available to tackle some of the more difficult
public health, resource, and management questions facing federal food
safety agencies. The Administration recognizes that these initial phase
actions will significantly improve the safety of the nation's food
supply, but that a longer term strategy is also needed. The President
has requested further information regarding longer term goals of the
multi-Agency initiative which will be available soon.
Question. If this is the initial phase, what additional phases are
planned and what additional funding will FDA require to carry out each
phase of the President's Food Safety Initiative?
Answer. Beyond fiscal year 1998, at minimum, a constant level of
funding would be required to assure whatever progress was achieved with
the initial phases of the Food Safety Initiative are not lost. However,
we have not determined exact long-term budgetary requirements, but
would operate under the fact that the federal food safety agencies are
committed to continuing to meet with stakeholders and ultimately
developing a strategic plan for continuing to improve the food safety
system. At the President's request, each agency is participating in an
interagency group to develop longer-term strategies which should be
completed soon.
fda food safety responsibilities
Question. How many food processing plants does the FDA inspect
annually? How does this compare to ten years ago? to five years ago?
How many FDA-regulated plants are there?
Answer. FDA uses a variety of establishment types to categorize the
business activity of firms of regulatory interest in its Official
Establishment Inventory. Since the term food processor is not one of
these categories, we are defining food processors as plants categorized
as manufacturers and repackers. In fiscal year 1987, FDA inspected
7,235 food processors, in fiscal year 1991 7,625, and in fiscal year
1996, 6,543.
There are almost 25,000 food and seafood manufacturers and
repackers in FDA's Official Establishment inventory. Let me provide for
the record, a table showing the historical numbers of repackers
included in our inventory.
[The information follows:]
OFFICIAL ESTABLISHMENT INVENTORY--FOOD AND SEAFOOD MANUFACTURERS/
REPACKERS NATIONAL TOTALS
------------------------------------------------------------------------
Food and seafood Seafood
manufacturers manufacturers
Fiscal year and repackers and repackers
count count
------------------------------------------------------------------------
1987................................ 24,761 3,076
1991................................ 24,059 3,286
1996................................ 24,770 3,342
------------------------------------------------------------------------
Question. Please describe FDA's inspection coverage of imported
foods. Has the FDA enhanced its inspection coverage of imported foods
over the past ten years? Is there increased concern over the safety of
imported foods?
Answer. Commercial food products coming into the United States must
be declared through Customs which automatically notifies FDA. FDA then
takes one of several possible actions. First, the product may be
released without examination, or second, FDA may physically examine the
product at the dock, take samples for analysis in one of the agency's
laboratories, or detain the product without physical examination.
Products are detained without physical examination if we have
previously had a specific problem with a product offered for import or
with products from a specific firm in a foreign country.
In fiscal year 1996, FDA conducted approximately 55,142 wharf
examinations and import sample collections, analyzed 19,515 samples,
and detained approximately 6,872 products without physical examination.
The number of imported food products entering the United States has
doubled over the last five years to approximately 2.2 million import
entries per year. Meanwhile, wharf examinations and sampling of foods
being offered for import into the United States have dropped by 50
percent in just the past four years. Given these changes, and the
increased frequency of outbreaks such as hepatitis in frozen
strawberries, there is increased concern over the safety of imported
foods. The inter-agency Food Safety Initiative is the Administration's
attempt to respond to this heightened concern.
Question. FDA is in the process of implementing a Hazardous and
Critical Control Point (HACCP) system for the inspection of seafood.
Would you please give us a status report on the implementation of this
system. What level of funding is being allocated for this activity for
fiscal year 1997? How much is included in the fiscal year 1998 budget
request for implementation of seafood HACCP?
Answer. FDA's Seafood Hazard Analysis and Critical Control Point,
or HACCP, regulations were published in December 1995 and become
effective in December 1997. HACCP is a system of preventive controls
for safety that is implemented by the industry. Each processor's HACCP
system must follow several basic principles but otherwise may be
tailored to the circumstances of that processor. FDA's role in this
system is to issue minimum ground rules in the form of its seafood
HACCP regulations, provide the industry and the public with information
about the program, and technical assistance on how to develop and
operate effective HACCP systems, verify through inspections that the
industry is meeting its responsibilities as of the effective date,
obtain corrections when those responsibilities are not being met, and
evaluate the national program and fine tune it as necessary. I will
provide, for the record, the status for each component of FDA's role in
implementing Seafood HACCP.
[The information follows:]
The regulations.--The regulations were developed through a process
involving extensive public input and comment. FDA's philosophy in
developing the regulations was that (1) every commercial processor
should be responsible for understanding the potential safety hazards
associated with its products and maintaining reasonable controls to
eliminate or minimize those hazards; and (2) FDA's regulations should
not be so burdensome as to make the achievement of (1) impossible. FDA
will be monitoring the program closely to determine whether this is the
case.
Public information.--The Agency has engaged in an aggressive public
information program to help the industry and the public generally
understand HACCP and what will be expected as of the effective date of
the program. FDA held public meetings in Boston, Baltimore, Tampa, New
Orleans, Oakland, and Seattle, and also in individual FDA district
offices. The regulations and explanatory materials have also been
placed on FDA's home page on the Internet (http://www.fda.gov).
FDA has also been active internationally. Over 50 percent of
seafood consumed in the U.S. is imported. Both imported and domestic
seafood are subject to the regulations. FDA has attended conferences
and made presentations at such venues as the World Aquaculture Society
Meeting and Seafood Show in Bangkok, at Bombay and Cochin, India, in
the Philippines, Singapore, Indonesia, and elsewhere. The Agency made a
presentation for the staffs of 37 embassies in Washington, D.C. Several
workshops for importers are scheduled in the near future at various
sites around the country.
Technical Assistance.--FDA has provided technical assistance to the
industry through written guidelines and training.
Written guidelines.--The seafood HACCP regulations are relatively
short and general to allow for flexibility in the design of HACCP
systems. Alone, however, the regulations provide processors with little
detail on how to actually develop, install, and implement a HACCP
system. Consequently, FDA developed the ``Fish and Fishery Products
Hazards and Controls Guide,'' which provides the Agency's best advice
on safety hazards that are likely to occur on a product-by-product
basis and on controls that are available for those hazards. The Guide
was first issued in draft form with a public comment period and has now
been published as a ``First Edition.'' Additional public comments are
being received and FDA will update the Guide to reflect changes as a
result of these comments prior to the effective date of the program.
The Guide will be revised as needed to reflect future comments
received.
Training.--The regulations require that, within each processing
operation, certain HACCP functions be performed by a trained individual
or by someone with equivalent knowledge obtained through on-the-job
training. The ``Seafood HACCP Alliance'' consisting of Federal
agencies, State regulatory officials, the Association of Food and Drug
Officials, academia, and industry trade associations, was formed for
the purpose of developing a uniform, core curriculum for seafood HACCP
training and to develop a cadre of trainers to deliver this course. The
Alliance developed a 2\1/2\ day training course in basic seafood HACCP,
including how to write a HACCP plan. The course was first offered to
prospective trainers (``train the trainers'') and is now being provided
by those trainers to the industry for nominal cost (not exceeding
$150). It has also been taught to FDA's seafood inspectors. FDA
estimates that about 2,000 individuals have now taken this course.
FDA then developed a follow-up course, solely for regulators, on
how to audit a processor's seafood HACCP system. It was initially
presented on March 26 and March 27, 1997 by satellite down link to
sites around the country. About 800 Federal and State inspectors and
other personnel participated in this initial offering. The course was
repeated recently in Maryland, primarily for state personnel in that
region. It is an interactive course with facilitators at each site.
Verification and Evaluation.--Once the program becomes effective,
FDA will be responsible for verifying compliance, obtaining
corrections, and evaluating the program as a whole. Internal
preparations are underway on these matters. One way that FDA is
preparing is by inviting processors with HACCP systems in place before
the effective date to have these systems reviewed by FDA as a non-
regulatory aspect of an otherwise regulatory inspection. Processors
will receive helpful feedback and FDA inspectors will obtain valuable
experience.
Leveraging.--To the extent that HACCP becomes a ``common language''
for both seafood processing and for inspections, it provides an
opportunity for the leveraging of inspection resources, both
domestically and internationally.
Domestic.--FDA is in the process of developing a model partnership
agreement for seafood HACCP inspection and beginning negotiations with
states toward entering into partnerships. HACCP provides a new
opportunity for inspection partnerships with states through which FDA
and the state regulatory agency could divide the inspection workload
between them and then combine the results in a common database. Such
partnerships would help avoid duplication of effort and, by pooling
results into a national database, greatly enhance the credibility of
the U.S. seafood inspection system both domestically and
internationally.
International.--Several countries have requested that FDA determine
that their HACCP-based regulatory systems for seafood are equivalent to
the U.S. system based on the FDA seafood HACCP regulations. FDA is now
reviewing whether equivalency does in fact exist for those countries.
To the extent that HACCP becomes an international norm, it facilitates
equivalency agreements between nations that trade in seafood. In
essence, an equivalency agreement acknowledges that the regulatory
systems of two countries provide the same level of protection to
consumers, although the measures for achieving that level of protection
may vary. Where equivalency has been determined to exist, consumers in
an importing country have a better assurance of safety than would be
realistically possible solely through sampling at ports of entry. Trade
is also promoted because equivalent countries do not need to engage in
rigorous sampling of each other's products. Finally, equivalency
agreements allow countries to focus their limited regulatory resources
toward countries where equivalency does not exist.
Molluscan shellfish.--Last year, the Interstate Shellfish
Sanitation Conference adopted virtually the entire FDA seafood HACCP
regulation for the purpose of applying it to the processing of raw
molluscan shellfish. This year, the Conference is expected to complete
that effort by revising its Manual of Operations to make it compatible
with HACCP and HACCP-based inspection.
FDA estimates that during fiscal year 1997, approximately $4.7
million will be spent on preparation activities for the implementation
of Seafood HACCP. Actual implementation of Seafood HACCP will begin
during fiscal year 1998. If the Food Safety Initiative is funded, FDA
anticipates spending a total of $26.8 million through this new source
of funding plus a redirection of existing funds. With Food Safety
Initiative funds, and the addition of new inspectors for Seafood HACCP,
FDA estimates that approximately 1,000 high risk firms will be
inspected in fiscal year 1998. The Food Safety Initiative will allow
FDA to annually inspect the entire inventory of 3,300 firms by the year
2000. Significant results of the additional resources will not be seen
during the first year of implementation, during which time, the new
inspectors will be hired and trained.
Question. How often are seafood plants inspected by the FDA?
Answer. In fiscal year 1995 FDA inspected about 45 percent of the
seafood inventory. In fiscal year 1996 FDA inspected about 46 percent
or 1,546 facilities. This is a dramatic increase from the 28 percent of
the 936 manufacturers or processors inventory that was inspected in
fiscal year 1987.
Question. I understand that the FDA is considering the
implementation of HACCP for other food commodities. Is this true? Has
the industry been involved in FDA's plans?
Answer. FDA has published an Advance Notice of Proposed
Rulemaking--ANPR--asking for public comment about whether and how the
Agency should develop regulations that would establish requirements for
a new comprehensive food safety assurance program based on a HACCP
approach for both domestically produced and imported foods other than
seafood. Our goals in establishing additional food safety regulations
would be to make the food supply safer through prevention of food
safety problems, enable FDA and its State and Local counterparts to
make more efficient use of the existing resources devoted to ensuring
food safety, and enhance the ability of the Federal Government to
provide consumers with the assurance they seek that the U.S. food
supply is safe. The comments received have been compiled and
summarized, and are being considered by the Agency in determining the
next steps in FDA's food HACCP program.
FDA invited the food manufacturing industry, through an
announcement in the Federal Register, to participate in a voluntary
HACCP Pilot Program. Seven volunteer firms met the stated criteria and
were accepted into the pilot. The pilot program has been completed with
five of the original participants. Several of these firms have advised
FDA that they are adopting HACCP corporate-wide and have invited FDA to
periodically review operations at the additional sites in conjunction
with corporate audits. FDA is recruiting additional participants to
ensure the pilot program will include a broad spectrum of food types,
geographic locations, firm sizes, and types of food safety hazards.
In addition, FDA held a public meeting in December, 1996, to review
the current science, including technological and safety factors,
relating to fresh juices and to consider any other measures necessary
to provide safe fruit and vegetable juices. Public testimony was
provided and interested persons were given an opportunity to submit
additional written comments. FDA intends to initiate rules providing
procedures for the safe and sanitary processing in the manufacture of
fruit and vegetable juice through the application of HACCP principles
and to require firms to use HACCP systems in the manufacture of fruit
and vegetable juices. A system of preventive controls is widely
recognized as the most effective and efficient way to ensure that food
products are safe.
youth tobacco prevention initiative
Question. Of the $34 million proposed for fiscal year 1998 to
implement FDA's final rule for the regulation of nicotine-containing
tobacco products, how much is for outreach and how much is for
enforcement?
Answer. Of the total $34 million proposed for fiscal year 1998 to
implement FDA's final rule for tobacco products, $10 million will be
used for outreach activities. The remaining $24 million will be used
for enforcement, the bulk of which will be provided to the states via
contracts with state and local agencies.
Question. What specific outreach activities will be carried out and
what is the cost of each?
Answer. In fiscal year 1998, we plan to intensify our outreach
efforts to educate the retail community and the public about the age
and photo ID provisions and to encourage retailers to comply with these
measures. We plan to do a mailing to hundreds of thousands of retailers
each quarter informing and reminding them of their responsibilities
under the regulation. Further, in response to retailers' requests, we
plan to print color posters for retailers to place in their stores
explaining to customers the new requirements and urging customers under
27 to have their ID ready when buying cigarettes or smokeless tobacco.
These posters will be printed in English and in Spanish and will be
made available for free to retailers and others calling the hotline.
FDA also will print, promote, and disseminate brochures for retailers
and the general public and will develop and place exhibits at events
attended by retailers, public health officials, and others. At the
point at which FDA signs a contract with a new state to conduct
compliance checks, FDA plans to alert retailers to the checks and
remind them to comply with the age and photo ID provisions. Also, in
states with whom FDA has contracted, FDA plans to place billboard,
print, and radio ads in English and in Spanish informing retailers and
the public that retailers must not sell to anyone under 18 and must
card anyone under 27. Further, FDA will update the public on the extent
of compliance it is achieving in different states. FDA also will
develop materials for young people informing them about the new
regulation and the serious public health problem it seeks to address.
We will work with schools to disseminate videos, posters, brochures,
and other materials to help discourage young people from attempting to
purchase cigarettes or smokeless tobacco.
Approximately half of the outreach funding will be spent on
educating retailers about their responsibilities via mailings to
retailers, in-store posters, brochures, exhibits, videos and ads. The
other half will be spent trying to discourage young people from buying
cigarettes and smokeless tobacco and informing parents, teachers, state
and local health officials about the new regulation.
Question. What specific enforcement activities will be conducted
and what is the cost of each?
Answer. The bulk of the $24 million will be spent on contracts with
state and local officials for the enforcement of the final tobacco
regulation. Remaining enforcement activities will primarily consist of
follow-up actions based upon the compliance checks conducted under
contract by state and local officials.
Question. What level of funding will be provided to State and local
officials to enforce the rule? Will all State and local governments
receive funds? If not, which State and local governments will receive
funds? How will these be selected? What level of funding will each
receive? What enforcement activities will these governments be required
to carry out?
Answer. FDA has identified 10 states that have been asked to submit
proposals for contracts. Money for the contracts has been set aside
from the $4.9 million allocated out of fiscal year 1997 funds. Other
states will remain free to submit proposals and, if money is available
after the first ten contracts are signed, additional contracts can be
negotiated. With the money included in the fiscal year 1998 request,
FDA expects to be able to contract with all states that submit
proposals.
Question. The appropriations justification indicates that seven
years after implementation of the rule, FDA's goal is a 50 percent
reduction in the use of tobacco products by children and adolescents.
How will FDA measure its success in meeting this goal?
Answer. In the preamble to the proposed rule, FDA indicated that it
would measure smoking and smokeless tobacco rates by reference to the
Monitoring the Future Project--MTFP--data, an annual survey performed
by the University of Michigan, Institute for Social Research. The
survey measures, among other things, cigarette and smokeless tobacco
use by 8th, 10th and 12th graders. In addition, it looks at two
measures: usage in the last 30 days, and regular usage. FDA intends to
use some or an average of some of these data.
Question. The fiscal year 1998 budget indicates that FDA will spend
$4.9 million on tobacco in fiscal year 1997. How will this $4.9 million
be spent?
Answer. Of the $4.9 million, $2 million will be used to fund State
Contracts, and $1.9 million will be used for FTE support. The balance
will be used to fund Outreach and Education efforts.
Question. Provide for the record an object class breakdown of FDA's
$4.9 million fiscal year 1997 level for tobacco and the $34 million
proposed for fiscal year 1998.
Answer. I would be happy to provide the requested object class
information for fiscal years 1997 and 1998 for the record.
[The information follows:]
YOUTH TOBACCO PREVENTION INITIATIVE
[Dollars in thousands]
------------------------------------------------------------------------
1997 estimate 1998 estimate
------------------------------------------------------------------------
Personnel compensation and benefits..... $1,713 $1,801
Travel.................................. 50 50
Rent and utilities...................... 60 40
Printing................................ 500 500
Other services (contracts).............. 2,522 31,569
Supplies and materials.................. 35 30
Equipment............................... 20 10
-------------------------------
Total............................. 4,900 34,000
------------------------------------------------------------------------
Question. What additional funding and staffing will be required to
implement FDA's tobacco regulation in subsequent fiscal years? Please
provide funding and staff year requirements by fiscal year.
Answer. FDA has not yet fully developed projections beyond fiscal
year 1998.
arkansas regional laboratory
Question. What is the status of Phase I construction of the
Arkansas Regional Laboratory which was funded for fiscal year 1997?
Answer. Proposals for the construction of the Arkansas Regional
Laboratory, or ARL, were received on April 30, 1997. It is anticipated
that the Phase I construction contract will be awarded during the
summer of 1997. Construction of the ARL Phase I would then begin in
fall 1997. The fiscal year 1997 appropriation included $13,000,000 for
Phase I construction of the ARL. Phase I begins construction and
provides the ARL building, foundation, substructure, superstructure,
exterior enclosure, and roofing. Major building systems, such as fire
protection, HVAC, electrical, and some site work, are also included.
Question. The fiscal year 1998 request includes $14.550 million for
Phase II construction of the Arkansas Regional Laboratory. What is the
schedule for Phase II construction of this project? Will the funds
requested be sufficient to complete Phase II of the project?
Answer. It is anticipated that the construction contractor will
receive a Notice to Proceed on construction of Phase II of the ARL in
the fall of 1997, with the completion scheduled in the fall of 1999.
Occupancy is projected for early 2000. The fiscal year 1998 request for
$14,550,000 will complete the laboratory portion or Phase II of the
construction of the ARL, by completing building systems and providing
laboratory fit-out. The fiscal year 1997 appropriation of $13,000,000
for Phase I of ARL will support construction of the building,
foundation, substructure, superstructure, exterior enclosure and
roofing as well as major building systems such as fire protection,
HVAC, electrical and some site work. The construction bid process for
Phase I is underway and will determine the exact amount needed to
complete the ARL fit-out.
Question. How many additional phases of this project are planned?
What is the cost of each phase and what funding will be required in
each subsequent fiscal year to complete the project?
Answer. Phase III, initially estimated at $9,800,000, will provide
the renovation of the existing Building 50 in its entirety and
completes the common ORA/NCTR administrative and support area. The
complete ORA/NCTR project consists of a joint animal quarantine
facility, renovated space located in NCTR Building 14 to accommodate
ORA's dioxin analytical program prior to ARL construction, and
construction of Phases I, II, and Phase III to complete ARL, building
50 renovation and common area for ORA/NCTR administration and support.
The current cost projections are based on the Architect/Engineer
estimate. The construction bid process is underway and when complete
will provide an exact amount for the project. Additionally, FDA will
fund an estimated $2.43 million for ARL and Building 50 furniture as
well as installing telecommunications, computers and security systems.
salaries and expenses request
Question. The fiscal year 1998 appropriations request for FDA's
salaries and expenses account is $820 million, $67.5 million below the
enacted fiscal year 1997 appropriations level. This net reduction does
not include other offsetting reductions to accommodate the $24 million
increase proposed for the food safety initiative and the $29.4 million
increase proposed for tobacco. If these are considered, the reduction
in appropriations for FDA's ongoing activities funded as part of the
salaries and expenses account totals $122.4 million--nearly a 15
percent decrease below the fiscal year 1997 level. This fiscal year
1998 salaries and expenses appropriations request will require the FDA
to reduce staff by 1,120 full-time equivalent positions below the
fiscal year 1997 level.
While the President's budget proposes that this reduction in the
appropriation be offset by new user fees generating $132 million in
collections in fiscal year 1998, these new fees rely on the approval of
the President's legislative proposals. In short, if the House and
Senate authorizing committees do not recommend legislation establishing
these fees, the FDA is going to be $132 million short of the amount it
proposes to need for fiscal year 1998. Those additional resources
cannot be assumed by this Committee. In addition, collections assumed
in the President's budget from two existing fees--the Prescription Drug
User Fee Act and the Mammography Quality Standards Act--require
reauthorization for fiscal year 1998. If the House and Senate
authorizing committees fail to reauthorize these fees, an additional
$105,179,000 in collections assumed in the fiscal year 1998 budget
request will not be available to the FDA.
What will be the impact on FDA's ongoing activities if this
Committee approves the President's appropriations request for fiscal
year 1998, which is 8 percent below the fiscal year 1997 enacted level
and nearly 15 percent below the fiscal year 1997 level if the requested
increases for food safety and tobacco youth prevention are approved?
Answer. The President's Budget assumes $244 million in user fees,
of which $237 million would be new or re-authorized. The Budget was
prepared on the reasonable assumption that those fees could be
authorized, consequently allowing some budget authority savings to
occur.
The Administration's budget for FDA should be viewed in total,
keeping in mind that it fits in with the President's overall balanced
budget plan by fiscal year 2002.
Question. If new user fees are not approved and the FDA's direct
appropriation for its salaries and expenses account is frozen at the
fiscal year 1997 enacted level, would FDA still propose that funding be
shifted from its other activities to provide the increases requested
for fiscal year 1998 for the food safety and youth tobacco prevention
initiatives? If so, from which activities funded through the salaries
and expenses appropriation would you suggest this funding be taken to
accommodate these increases?
Answer. I am unable, at this time, to prioritize among the new
funding included in the budget versus our traditional areas of concern.
On the one hand, improving the safety of the food supply and keeping
tobacco out of the hands of children are both initiatives of the utmost
importance, and are very high priorities of the Administration. On the
other hand, FDA's traditional activities of promoting and protecting
the public health through premarket review and postmarket assurance are
also of vital importance.
Question. Assuming an overall freeze on the salaries and expenses
appropriation at the fiscal year 1997 level, please provide a breakdown
of FDA's fiscal year 1998 spending requirements using the breakdowns
contained in the Senate report on the fiscal year 1997 appropriations
bill and adopted by the conference committee.
Answer. Because of the importance of the new funding requests and
the need for continuing funding of our traditional programs, I am
unable, at this time, to provide a breakdown of fiscal year 1998
spending requirements. We are now considering different possible
scenarios involving the new initiatives included in the budget as well
as our traditional areas of concern. The proposed new initiatives are
of the utmost importance, and are very high priorities of the
Administration, as are FDA's traditional activities of promoting and
protecting the public health.
Question. The fiscal year 1998 request assumes the reauthorization
of the Prescription Drug User Fee Act, assuming collections from these
fees of $91.204 million for fiscal year 1998, as compared with fiscal
year 1997 fee collections of $87.528 million. Is this estimate of
Prescription Drug User Fee Act collections for fiscal year 1998 based
on an extension of current law or does it assume changes in the current
law authorizing these fees?
Answer. Since the present statute sunsets on September 30, 1997,
the current law authorizing fees will expire. A new statute, either an
extension of PDUFA or another statute, would be required for FDA to
collect fees in 1998. That said, the estimate included in the fiscal
year 1998 budget is based on the legislation as currently authorized.
Question. What is the current fiscal year 1997 base appropriations
level for drug review and approval activities which are enhanced by
collections from Prescription Drug Act user fees? What is the base
level assumed in the fiscal year 1998 budget?
Answer. PDUFA, as currently authorized, provides that fees shall
only be collected and available for increases in the costs for the
process to review new human drug applications, defined in the Act,
above the level of costs for the process in fiscal year 1992 multiplied
by an adjustment factor. Using data from the fiscal year 1998
President's Budget historical tables for domestic discretionary budget
authority, we have calculated the fiscal year 1992 base obligations
multiplied by the appropriate adjustment factor to arrive at the base
funding estimate necessary to collect fees. The base funding estimate
necessary to collect fees is $125,794,000 for fiscal year 1997, and
$128,833,500 for fiscal year 1998.
Question. What would be the consequences of not reauthorizing the
Prescription Drug User Fee Act?
Answer. The consequences of not reauthorizing this program would
include a serious erosion in the timeliness that safe and effective new
therapies become available to the public. PDUFA has been a very
successful program primarily benefiting the public. The Agency and
industry have benefited substantially also from a commitment to
excellence in the review of applications, and the predictability of
improved Agency performance. Without reauthorization, FDA would be
forced into a rapid downsizing of the program, would likely lose many
of its most talented employees, and the morale of those remaining would
be very low. Both would increase review times and backlogs
substantially.
Question. What would be the consequences of not reauthorizing the
Mammography Quality Standards Review Act?
Answer. FDA is charged with administering the provisions of the
Mammography Quality Standards Act of 1992, or MQSA, which was passed
with the primary objective of ensuring that all women have access to
safe and effective mammography services. The MQSA requires uniform
national quality standards for mammography facilities, and that these
facilities be accredited by an approved accreditation body and
certified by the Secretary of Health and Human Services--and carried
out by delegation to FDA--as meeting quality standards. Under MQSA,
facilities must be inspected at least annually by specifically trained
and credentialed Federal or state inspectors. Inspections include
assessments of image quality, beam quality, average glandular dose, and
other measurements. MQSA also requires a National Mammography Quality
Assurance Advisory Committee to advise FDA about mandatory minimum
quality standards, standards for federally-supervised state or private
non-profit accreditation programs, and certification and enforcement
programs.
If MQSA is not reauthorized, the quality improvements made by FDA
under MQSA to mammography will be lost. Mammography is the only proven
means to detect breast cancer early and save a woman's life. Prior to
MQSA, many states did not have standards for quality, nor did they
inspect mammography facilities to ensure quality. Fourteen percent of
facilities studied in 1992 did not pass image quality tests when
surveyed jointly by FDA and the States. Under MQSA today, 99 percent of
mammography facilities meet the requirements of this important test. In
addition, all facilities now must meet baseline standards and are
inspected by FDA trained inspectors. Accordingly, without
reauthorization, the gains of mammography quality for American women
may be lost and the effectiveness of mammography for early detection of
breast cancer, in all likelihood, would substantially decrease.
Moreover, the benefits to be gained from the new regulations to be
published at the end of fiscal year 1997 would not be realized.
Since enactment, FDA has conducted numerous activities to implement
MQSA. For the record, I would be happy to provide a list of activities
undertaken during fiscal year 1996.
[The information follows:]
Trained and certified inspectors to bring the total number to 250.
Conducted 8,864 facility inspections.
Issued more than 5,000 facility certificates.
Fully implemented the inspection fee filing process to recover costs of
MQSA non-governmental entity inspections.
Conducted three meetings of the National Mammography Quality Assurance
Advisory Committee to share comments, revise the proposed final
regulations, and pursue subcommittee goals.
Received and summarized over 8,000 comments by the end of the year.
Proposed final regulations which were published on April 3, 1996.
Implemented an Inspector Audit program developed as part of Inspector
Quality Assurance.
Audited 65 percent of the inspectors by year's end.
To continue, in fiscal year 1997, FDA will analyze and consider all
public comments received regarding the proposed final regulations
published in the Federal Register and develop appropriate final
regulations. FDA expects to publish the final regulations by the end of
fiscal year 1997. If MQSA is reauthorized, fiscal year 1998 would be
devoted to transitioning to implementation of the new regulations. For
example, FDA would revise the facility inspection procedure to be in
accordance with the final regulations and would train the inspectors on
these changes. An outreach effort would also be developed to ensure
that facilities are aware of the changes resulting from the
implementation of the final MQSA regulations.
The General Accounting Office, or GAO, issued a report, in January
1997, concluding that FDA's inspection program is having a positive
effect on the nation's more that 9,000 mammography facilities and that
the facilities show a growing compliance with mammography standards.
The first year's inspections showed that 80 percent of facilities had
either no violations or minor ones, and that only two percent had
violations serious enough to warrant a warning letter from the FDA.
Second year inspections have shown further improvement. In particular,
the serious violations identified during the first year have not
recurred in the vast majority of facilities where they were initially
found.
Mammography training workshops for mammography facilities organized
by a team from FDA, the American College of Radiology, and program
directors of the Conference on Radiation Control, were selected for
Vice President Al Gore's Hammer Award on October 30, 1996. The award
winning workshops, whose organization required exceptional effort and
teamwork, were designed to improve the technical skills of mammography
facilities' personnel, and thereby advance the goal of MQSA to make all
mammograms taken in this country of the highest possible quality, in
order to enhance breast cancer detection and treatment.
Question. Please provide for the record details on the specific new
user fees proposed for each of the following areas: food additive
petitions, generic drugs, over-the-counter drugs, animal drugs, medical
devices, import inspection, and postmarket surveillance activities
(foods and cosmetics, human drugs, biologics, animal drugs and feeds,
and medical devices).
Answer. I would be happy to provide a summary of the new user fees
proposed in the President's fiscal year 1998 budget request, plus some
additional information regarding specifics on each of the user fees,
where applicable. The information provided serves as a useful starting
point for any upcoming negotiations on the proposed user fees among
FDA, Congress, and the affected industries. These points are subject to
change based on the direction of any discussions regarding these user
fees.
[The information follows:]
Summary of proposed user fees--Fiscal year 1998 budget
Food additive petitions................................. $12,543,000
Generic drugs........................................... \1\ 18,000,000
Animal drugs............................................ 10,100,000
Medical devices......................................... 25,000,000
Import inspection....................................... 15,000,000
Establishment postmarket surveillance activities........ 51,000,000
Foods and cosmetics................................. (19,024,000)
Human drugs......................................... (7,508,000)
Biologics........................................... (2,233,000)
Animal drugs and feeds.............................. (2,493,000)
Medical devices..................................... (19,742,000)
--------------------------------------------------------
____________________________________________________
Total fees........................................ 131,643,000
\1\ In the fiscal year 1998 budget request, the estimate for Generic
Drug user fees was $13 million, and a separate $5 million user fee for
Over-the-Counter (OTC) drugs was included. However, because fees are
already charged for NDA's for OTC switches under PDUFA, this $5 million
was moved to Generic Drugs in the Administration's proposed legislation
for a new total of $18 million.
The industries regulated by FDA derive valuable benefits from some
FDA activities, including increased customer confidence in their
products and significant protection from liability. FDA's reputation
also improves the competitive position of American firms in overseas
markets. The President's budget proposes that the regulated industries
contribute a share of FDA's cost of ensuring the safety and
effectiveness of their products. The following are the types of user
fees, by program area, being proposed by the Administration. We intend
to work with Congress, industry and other affected parties to develop
these or other proposals to achieve informed consideration of proposed
user fees, with appropriate performance measures and goals, and to
ensure necessary funding for important FDA public health activities in
fiscal year 1998.
Foods--$46.6 million
Proposals include: premarket approval activities for food and color
additive petitions submitted pursuant to sections 409, 721, 201(s), and
701(a) of the FD&C Act ($12,543), to support FDA import monitoring
activities ($15,000), and to partially fund postmarketing regulatory
activities ($19,024), as covered by section 704 of the FD&C Act.
Premarket: Petitions filed pursuant to section 704 of the FD&C Act.
Imports: Support of FDA Import Monitoring Activities.
Drugs--$25.5 million
Proposals include: review of original generic drug product
applications ($18,000), submitted pursuant to section 505(j) of the
FD&C Act, and to partially fund FDA's Human Drug postmarketing
regulatory activities ($7,508), as covered by section 510 of the FD&C
Act.
Generic Drugs: A one-time, comprehensive user fee for each original
generic drug product application, for those applications
submitted pursuant section 505(j) of the FD&C Act.
Biologics--$2.2 million
Proposals include: partially funding postmarketing regulatory
activities ($2,233).
Animal Drugs--$12.6 million
Proposals include: review of premarket applications ($4,000), FDA
activities which substantiate that industry's clinical and non-clinical
investigations are properly conducted ($6,100), as covered by section
512 of the FD&C Act, and to partially fund other postmarketing
regulatory activities ($2,493).
Premarket Approval of Animal Drugs and Feed Additives: Ensure new
animal drugs and feed additives are safe, effective, properly
formulated and manufactured. Fees would be charged to
applications submitted pursuant to section 512 of the FD&C Act.
Drug Experience Report Evaluations: Used to substantiate that
industry's clinical and nonclinical investigations are properly
conducted under section 512 of the FD&C Act.
Medical Devices--$44.7 million
Proposals include: activities related to review and evaluation of
premarket approval applications, premarket notification (510(k)'s), and
investigational device exemptions (IDE's) for all medical and
radiological devices to ensure that new devices meet the statutory
requirements prior to commercial marketing ($25,000), submitted
pursuant to sections 510 and 515 of the FD&C Act, and to partially fund
postmarketing regulatory activities ($19,742), as covered by section
510 of the FD&C Act.
Premarket Approval of Applications and Notifications
Review and Evaluation of Premarket Approval Applications, Premarket
Notification (510(k)'s) and Investigational Device Exemptions
(IDE's) for all medical and radiological devices.
Ensure that new devices meet the statutory requirements prior to
commercial marketing.
Postmarket Regulatory Activities--Across Programs
Based on the Agency's Official Establishment Inventory (OEI).
Used to Offset a Portion of FDA's Postmarket Activity Expenses.
For Postmarket Regulatory Activity Fees we have determined a fee of
about $550 per establishment, which would be applied as follows:
35,369 Food and Cosmetics Establishments
13,958 Human Drug Establishments
4,151 Biologics Establishments
4,635 Animal Drug and Feed Establishments
36,703 Medical Device Establishments
The amount of the fee to be collected in most cases will need to be
determined in negotiation with FDA's many constituents, as well as the
Congress. It would be premature for those negotiations to presuppose
specific fee amounts at this time. However, where possible, we have
made every effort to provide some of the information requested.
The fiscal year 1998 budget request includes a total amount of fees
for medical devices of $25 million. The split by application type, as
contained in the Administration's legislation is: $56,522 for premarket
applications, $7,717 for supplements with data required, $4,891 for
supplements without data required, and $3,478 for 510(k) applications.
Consistent with current practices under PDUFA and MQSA, we would
initially recommend similar timing of fee collections. For instance,
any application fees would be collected at the time of submission, any
import fees would be collected at the point of entry, and any
establishment fees would be collected at the beginning of the fiscal
year.
For postmarket activities, based on the Agency's Official
Establishment Inventory (OEI), FDA determined the number of
establishments by program area, excluding warehouses, and calculated
that $550 per establishment would be needed to reach the $51 million
figure estimated in the fiscal year 1998 budget request.
Below is a table reflecting the estimated fee amount from fiscal
year 1998, including the approximate percentage of the existing program
that the proposed user fee would cover divided into our core activities
of premarket review and postmarket assurance:
------------------------------------------------------------------------
Estimated budget
Estimated amount amount in fiscal
of fee (from year 1997
Activity area for proposed fee fiscal year 1998 (rounded to
budget) nearest
$100,000)
------------------------------------------------------------------------
Premarket:
Food additive petitions......... $12,543,000 $12,600,000
Generic drug applications....... 18,000,000 36,000,000
Animal drug applications........ 4,000,000 16,000,000
Medical device applications..... 25,000,000 50,000,000
Postmarket:
Animal drug activities.......... 6,100,000 18,300,000
Food imports.................... 15,000,000 45,000,000
Establishments.................. 51,000,000 153,000,000
------------------------------------------------------------------------
Question. What performance goals will be established for each of
the proposed new user fees listed above? For each, please describe how
these performance standards differ from those FDA is now achieving and
provide the fiscal year 1997 level of funding for each activity.
Answer. Many of the specifics for each of the new user fees will be
determined as the result of negotiations among FDA, Congress, and the
affected industries. To speculate on exact performance goals for these
user fees would be premature at this point. FDA is, however, developing
performance measures for its activities in total--as mandated by the
Government Performance Results Act--for inclusion in the fiscal year
1999 budget.
Question. For each of FDA's existing user fees, please provide user
fee collections and related obligations for each of the last five
fiscal years.
Answer. I would be happy to provide that information.
[The information follows:]
USER FEE COLLECTIONS FOR FISCAL YEARS 1992-96
[In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
Fiscal year--
------------------------------------------------------
1992 1993 1994 1995 1996
----------------------------------------------------------------------------------------------------------------
Prescription Drug User Fee Act of 1992 (PDUFA) \1\....... ......... $28,532 $53,730 $70,954 $82,318
Mammography Quality Standards Act of 1992 (MQSA)......... N/A ......... ......... 20 12,745
Certification Fund....................................... 4,320 4,075 3,867 4,875 4,490
----------------------------------------------------------------------------------------------------------------
\1\ Reflects fees collected in fiscal year, including fees collected for applications received in previous
years.
USER FEE OBLIGATIONS FOR FISCAL YEARS 1992-96
[In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
Fiscal year--
------------------------------------------------------
1992 1993 1994 1995 1996
----------------------------------------------------------------------------------------------------------------
Prescription Drug User Fee Act of 1992 (PDUFA)........... ......... $8,949 $39,951 $74,064 $85,053
Mammography Quality Standards Act of 1992 (MQSA)......... N/A N/A N/A N/A 8,577
Certification Fund....................................... 3,681 3,392 3,513 3,978 3,964
----------------------------------------------------------------------------------------------------------------
rental of space
Question. The fiscal year 1998 request proposes the fiscal year
1997 level of $46.294 million for FDA's payment to the General Services
Administration for space rental and related costs. Why is no increase
proposed?
Answer. Competition for increases in scarce Federal funding dollars
has provided higher priority to public health program improvements.
Again this year, the President's budget request is for an amount less
than the actual GSA rent bill. If FDA's rent payments to GSA are not
limited as they have been in recent years, FDA would have to divert
further critical program resources to pay the rental charges unless
Congress raises our Rental Payments appropriation level to meet our
actual charges.
For your information we are providing a four-year chart of the
bills associated with the Rental Payments, the FDA Appropriation, and
the allowance for FDA's Building Delegation. These bills reflect the
total amount the General Services Administration bills FDA for the
buildings which fall under the Rental Payments FDA Appropriation. The
chart further illustrates the importance of the limitation placed on
the amount of annual rent paid by FDA to GSA.
[The information follows:]
AMOUNTS OF BILLS FOR RENTAL PAYMENTS TO GSA
[Dollars in millions]
----------------------------------------------------------------------------------------------------------------
Fiscal year--
Location --------------------------------------------
1995 1996 1997 * 1998 * \7\
----------------------------------------------------------------------------------------------------------------
GSA Rent Bills:
FDA direct..................................................... $55.0 $60.5 $71.5 $74.9
Parklawn Area \1\.............................................. 7.5 7.6 8.7 8.9
Southwest Complex \2\.......................................... 0.7 0.7 0.7 0.7
--------------------------------------------
Total GSA rent billed to FDA................................. 63.2 68.8 80.9 84.5
Rental payments to GSA, FDA--Appropriations Account--and total paid
to GSA \3\........................................................ 46.3 46.3 46.3 46.3
Building delegation allowance included in Appropriations Account
for buildings maintained by FDA................................... \4\ [4.0] \5\ [4.0] \6\ ** [4
.6] \7\ ** [4.
8]
----------------------------------------------------------------------------------------------------------------
* Estimated Total GSA Rent.
** Includes MODULE II
\1\ A separate GSA rent bill which currently includes 5600 Fishers Lane (Parklawn), 12420 Parklawn (Park), and
370 WHSE (Tech Center) which is billed to FDA on a pro rata share by HHS/Program Support Center (PSC).
\2\ A separate GSA rent bill which Includes 330 C Street (Switzer) and 11400 Rockville Pike (Rockwall) which is
billed to FDA on a pro rata share by HHS/PSC.
\3\ GSA Rental Payments, FDA, appropriations account.
\4\ Authorized allowance for reduction in GSA rent under Treasury, Postal Service, Executive Office of the
President and Independent Agencies Appropriation Act, Public Law 103-329, Section 611.
\5\ Authorized allowance for reduction in GSA rent under Treasury, Postal Service and General Government
Appropriation Act, 1996, Public Law 104-52, Section 611.
\6\ Authorized allowance for reduction in GSA rent under Omnibus Appropriation Act of 1997. Public Law 104-208,
Section 611.
\7\ Note the 1998 estimate for the total GSA Rent bill includes a three percent inflation plus an allowance for
adjustments in projected space assignments. In addition, the estimate for the 1998 Building Delegation account
includes 2.7 percent inflation based on a memo received from GSA/PBS, June Huber, Assistant Commissioner for
Portfolio Management.
Question. Does this reflect the actual cost to the GSA for space
rental and related costs for programs and activities of the FDA
pursuant to Public Law 92-313? What does Public Law 92-313 provide?
Answer. The requested amount of $46.3 million reflects the amount
to be paid to GSA, but does not reflect the actual amount billed by
GSA. Public Law 92-313, ``The Public Buildings Amendments of 1972,'' as
amended, provides for the financing acquisition, construction,
alteration, maintenance, operation, and protection of public buildings
and for other purposes. For the record, I would be happy to provide a
quote from the funding section:
[The information follows:]
``The financing mechanism for Public Building Service (PBS)
activities is the Federal Buildings Fund, which began operations at the
start of fiscal year 1975. The Public Buildings Amendments of 1972
(Public Law 92-313) authorized GSA to finance government real property
management activities through user charges set at commercially-
comparable rates and collected from agencies occupying space. This
rental income is deposited into the Federal Buildings Fund, with income
in excess of operating expenses used to finance new construction and
repair and alteration projects. In recent years, construction funds
have been supplemented by direct appropriations to the Federal
Buildings Fund and by increases in GSA's borrowing authority.''
``The fund is subject to Congressionally-imposed limitations on the
amount of its revenue that can be spent on any of its authorized
activities. Of the approximately $5 billion in rent revenue that PBS
receives, almost one-half is for payments to the commercial real estate
market for leased space, which comprises 48 percent of the inventory.''
One example of the operation of this fund for buildings which GSA
leases is the Parklawn Building in Rockville. GSA has leased this
building for approximately 25 years from a commercial lessor, for
occupancy by several agencies of the Public Health Service. In this
case, the agencies each pay GSA their share of GSA's rental rates,
which for FDA is currently about $8 million, and the majority of these
funds are then paid by GSA to the building owner.
A different example is Federal Building 8 at 200 C Street in South
West Washington. Originally envisioned as housing all of FDA, this
building was constructed with Federal funds and occupied in 1962. It
now houses the majority of the Center for Food Safety and Applied
Nutrition. Under the principles of Public Law 92-313, FDA pays about
$14.6 million a year for this building, even though it was long ago
paid for as part of FDA's contribution to the Public Buildings Fund to
enable GSA to construct or lease new facilities.
Question. The justification indicates that ``as authorized by the
annual Treasury, Postal Service and General Government Appropriations
Act, payments under the fiscal year 1996 appropriation were reduced by
$3,957,000; payments for fiscal years 1997 and 1998 are expected to be
reduced by an estimated $4,075,000 and $4,832,000 respectively.'' What
is the specific provision of the Treasury, Postal Service and General
Government Appropriations Act cited which requires these reductions?
Answer. These reductions referred to the amount paid to GSA from
the rental appropriation and retained by the FDA to cover operations,
maintenance and repairs of GSA facilities which GSA has delegated to
FDA to operate and maintain. The specific provision of the Treasury,
Postal Service and General Government Appropriations Act, 1996, that
requires these reductions is Public Law 104-52, Section 611. For the
record, I would be happy to provide a quote from the section.
[The information follows:]
``Any department or agency to which the Administrator of General
Services has delegated the authority to operate and maintain or repair
any building or facility pursuant to section 205(d) of the Federal
Property and Administrative Services Act of 1949, as amended shall
retain that portion of the GSA rental payment available for operation,
maintenance or repair of the building or facility as determined by the
Administrator, and expend such funds directly for the operation,
maintenance or repair of the building or facility. Any funds retained
under this section shall remain available until expended for such
purpose.''
The amount determined in fiscal year 1996 was $3,957,000. The funds
provided by GSA were used to cover only the recurring services within a
normal eight hour day for our delegated buildings which include the
Crawford Building in Atlanta, Georgia, and Federal Building 8 at 200 C
Street, SW, Washington, D.C., plus four other facilities in the
National Capital Area.
For the record let me provide the specific provision from fiscal
year 1997 which is in accordance with the Omnibus Appropriations Act,
1997, Public Law 104-208, section 611.
[The information follows:]
``For fiscal year ending September 30, 1997, and thereafter, any
department or agency to which the Administrator of General Services has
delegated authority to operate, maintain or repair any building or
facility pursuant to section 205(d) or the Federal Property and
Administrative Services Act of 1949, as amended, shall retain that
portion of the GSA rental payment available for operation, maintenance
or repair of the building or facility as determined by the
Administrator, and expend such funds directly for the operation,
maintenance or repair of the building or facility. Any funds retained
under this section shall remain available until expended for such
purpose.''
To date the total estimated amount for fiscal year 1997 is revised
to $4,561,834, which includes the buildings previously discussed and an
estimated amount of $956,924 for MODULE II which is being added to
FDA's inventory of delegated facilities in fiscal year 1997.
Question. How is a fiscal year 1998 reduction required by this Act?
Answer. For the record, let me provide a citation from the Act.
[The information follows:]
The Omnibus Appropriations Act, 1997, Public Law 104-208, section
611 states, ``For fiscal year ending September 30, 1997, and
thereafter, any department or agency to which the Administrator of
General Services has delegated authority to operate, maintain or repair
any building or facility pursuant to section 205(d) or the Federal
Property and Administrative Services Act of 1949, as amended, shall
retain that portion of the GSA rental payment available for operation,
maintenance or repair of the building or facility as determined by the
Administrator, and expend such funds directly for the operation,
maintenance or repair of the building or facility. Any funds retained
under this section shall remain available until expended for such
purpose''.
Question. Is the $4,832,000 fiscal year 1998 reduction included in
FDA's fiscal year 1998 ``rental of space'' request?
Answer. Yes, the $4,832,000 is included in the $46,294,000 request
as found in the Rental Payments, FDA Appropriation.
Question. The justification indicates that any recurring
reimbursable services provided by GSA over and above the normal eight
hour day are paid by FDA out of the Salaries and Expenses
appropriation. How much was paid out of the Salaries and Expenses
appropriation in each of the last five fiscal years for these services
provided by GSA? What is the current fiscal year 1997 estimate?
Answer. We will be happy to provide you with a chart which sets out
the dollar amounts paid out of FDA's Salaries and Expenses
appropriation for recurring reimbursable services provided by GSA over
and above the normal eight hour day. Included in the chart is the
current fiscal year 1997 estimate of $7,019,000. The increase from
fiscal year 1996 to fiscal year 1997 is primarily due to increased
guard services and security system services mandated by the Department
of Justice following the Oklahoma City bombing.
[The information follows:]
GSA Above Standard Reimbursable Services
Fiscal year
1997..........................................................$7,019,000
1996.......................................................... 6,719,000
1995.......................................................... 6,866,000
1994.......................................................... 4,925,000
1993.......................................................... 3,857,000
1992.......................................................... 3,599,000
Question. The Agriculture Appropriations Act provides that in the
event the FDA should require modification of space needs, a share of
the ``salaries and expenses'' appropriation may be transferred to the
``rental of space'' appropriation or a share of the ``rental of space''
appropriation may be transferred to the ``salaries and expenses''
appropriation, but such transfers shall not exceed 5 percent of the
funds made available for rental payments to or from FDA's ``rental of
space'' account. Please indicate what transfers, if any, have been made
to or from the rental of space account in each of the last five fiscal
years pursuant to this authority, and indicate the amount and purpose
of each funds transfer. What transfers have been made in fiscal year
1997 to date, in what amount, and for what purpose?
Answer. The only time GSA requested such a transfer was in fiscal
year 1993. FDA requested and was approved a reapportionment from its
``salaries and expense'' appropriation to the ``rental of space''
appropriation for $453,879. The $453,879 was for FDA's increase in GSA
space of 47,496 square feet in fiscal year 1993 from September 15, 1992
through March 15, 1993. To date, no GSA requests nor FDA transfers have
been made for fiscal year 1997.
Question. While the fiscal year 1998 budget identifies the amount
requested for rent and related services in the ``salaries and
expenses'' account, it ignores the Committee directive to consolidate
these costs into the FDA ``Rental of space'' account. Why?
Answer. FDA included a separate line item in the budget titled
``S&E Rent and Related'' in response to the Committee's concern
regarding FDA's facilities costs.
FDA is concerned that combining these expenses with GSA Rent in a
separate appropriation would greatly limit FDA's flexibility in meeting
its obligations for building-related expenses that cannot always be
predicted precisely during the budget process. Only about $6.5 million
of the ``Rent and Related'' line item is for rent for commercially-
leased buildings--the rest is for building-related costs such as
additional utilities for laboratory facilities, and additional guard
services, where FDA's needs may vary from time to time. Another
complicating factor is that the timing of facility moves cannot be
controlled precisely. There are often delays in occupying new
facilities, which may cause FDA to incur greater costs than anticipated
for the facility to be vacated. If all of these costs were in a
separate appropriation, FDA would have to seek an appropriation
transfer when such variations occurred, rather than having the ability
to absorb them within the Salaries and Expenses Appropriation.
medical device approvals
Question. Dr. Friedman, you indicate in your prepared statement the
Center for Devices and Radiological Health (CDRH) and the agency are
focusing now on innovative ways of bringing down the premarket approval
reviews (PMA) review times, but this depends on the level of resources
available to do the work. What ways are you exploring to bring time PMA
review times?
Answer. FDA is examining and implementing various ways that will
help reduce PMA review times. I would be happy to provide, for the
record, information describing our activities in this area.
[The information follows:]
PMA's
Expedited Review: FDA believes it is in the interest of the public
health to review PMA's and 510(k)'s for certain medical devices in an
expedited manner. Initially established in October 1989 and expanded in
May 1994, expedited review is generally available when a device offers
a potential for clinically meaningful benefit as compared to the
existing alternatives (preventative, diagnostic, or therapeutic) or
when the new medical device promises to provide a revolutionary advance
(not incremental advantage) over currently available alternative
modalities.
Project Management: Formal scheduling of PMA events such as filing
and panel meetings when the application is received.
Label and Interactive Review: Meetings face-to-face to quickly
resolve labeling and other PMA issues.
Electronic Submissions: Allow for alternate ways of submitting and
reviewing applications.
Internet: Provide greater access to FDA resource materials and
reports which decreases reviewer time used to support Freedom of
Information Act (FOIA) requests from the public.
Reengineering: FDA is establishing a PMA reengineering team to
review all aspects of the PMA review process and implement needed
improvements and enhancements.
Product Development Protocol (PDP): Through reengineering, FDA's
CDRH is also seeking to shift certain PMA's into the Product
Development Protocol (PDP) review model. Although this provision has
been in the statute since 1976, PDP has not been used effectively. FDA
is currently reengineering the PDP program. This new approach will
incorporate PMA, IDE, and post-market requirements and will be designed
to include a variety of tools to facilitate review and approval: a
criteria-based segmented review; built-in procedures for product
change; resources focused on safety and effectiveness issues; and panel
review at the protocol phase only. This reengineering effort should
allow ``real-time'' reviews during the product development protocol
process and should eliminate obstacles that prevented effective use of
the PDP approach in the past.
Reclassification: Reclassify, as appropriate, preamendments class
III devices to class I or II.
Preamendment PMA's: When PMA's will be required, the Agency is
working interactively, with preamendment class III submitters prior to
the 515(b) call for the PMA's to discuss the studies and data that will
be required for the PMA's.
PMA Supplements
``Real-Time'' PMA Supplement Review Program: The purpose of this
program is to conduct document reviews for certain PMA supplements in
``Real-Time'', with a face-to-face meeting, video conference, or
telephone conference format and provide a decision letter to the
company within five days after the meeting.
GMP Pilot: A new method of handling certain PMA supplements for
manufacturing and sterilization site changes that speeds up agency
review.
Triage: A new look at prioritizing the workload.
Question. What level of resources is included in the agency's
fiscal year 1998 appropriations request to be able to do this work?
Answer. FDA is requesting the addition of $5,207,000 to the Medical
Devices budget to improve the quality and timeliness of its review
process for Class III applications, PMA's, and PMA supplements. FDA
expects a 15 percent increase in PMA workload from fiscal year 1997 to
fiscal year 1998 due to requests for reclassifications and submissions
of required preamendment PMA's for class III devices. While FDA has
made great strides in reducing its review times and backlogs for
medical device applications, continued improvement is needed to meet
mandated goals with the increased workload. Additional resources will
allow FDA to allocate more resources toward the PMA process and to
limit the increase in pending PMA's without jeopardizing the recent
performance gains made in the 510(k) program.
FDA knows that resources will continue to be scarce, and is
beginning to re-engineer the medical device program to obtain maximum
public health impact from the resources that will be available. The
goal behind this effort will be to focus resources on high-risk, high-
impact products while at the same time de-emphasizing areas that pose
lower risk to the public, or where FDA involvement is not essential.
The improvements and changes that arise from the re-engineering process
will ensure that the medical device program is as effective and
efficient as possible, and may increase productivity in the future.
We are providing a table that shows FDA's fiscal year 1998
performance goals for PMA workload at Base Resource levels and with
additional resources.
[The information follows:]
ESTIMATED FISCAL YEAR 1998 PERFORMANCE GOALS FOR FDA
------------------------------------------------------------------------
Performance goals--
-------------------------------
With $5.2
Base level million
resources additional
(percent) resources
(percent)
------------------------------------------------------------------------
PMA originals:
Complete first actions on Standard
PMA's within 180 days.............. 35 50
Complete expedited first actions
within 180 days.................... 85 90
PMA supplements:
Complete first actions within 180
days............................... 55 80
Complete expedited first actions
within 180 days.................... 85 90
------------------------------------------------------------------------
Question. Please provide an update on the third party pilot program
for Class I and Class II devices. How many 510(k) products are eligible
to be reviewed under the pilot program? What kind of products are
these?
Answer. FDA's pilot program for third-party review of pre-market
notifications, or 510(k)'s, for selected low and moderate risk devices
was announced in the Federal Register on April 3, 1996 and began August
1, 1996. FDA has identified 251 types of devices for inclusion in the
pilot. This consists of all Class I devices that are not exempt from
510(k)--a total of 221 device types--plus 30 Class II devices.
Historically, FDA has received up to 1,500 510(k)'s per year for these
251 device types. All of the Class I devices and 6 of the Class II
devices were immediately eligible for third-party review upon
commencement of the pilot. Eight additional Class II devices were
phased into the pilot in November 1996. The remaining 16 Class II
devices will be eligible for review before the end of the first year of
the pilot as FDA completes guidance documents for these devices.
Class I devices generally present low risk and their safety and
effectiveness can be assured through general controls, such as good
manufacturing practices requirements and pre-market notification. More
than 70 percent of the 221 Class I devices that are eligible for third-
party review are in vitro diagnostic devices--such as, for example,
cholesterol test systems. Review of such devices focuses on the
accuracy and precision of the test. Class II devices generally present
moderate risk and require special controls--such as guidance documents
or post-market surveillance--in addition to general controls. The 30
Class II devices that are in the pilot include a broad variety of
devices, such as dental alloys, syringes, blood pressure measurement
devices, and diagnostic ultrasound systems.
Question. What are your average review times for these products?
Answer. To date, FDA has issued substantial equivalence decisions
for five 510(k)'s that were reviewed by third parties under the pilot
program. I would be happy to provide a table showing review times for
these submissions.
[The information follows:]
510(K) REVIEWS UNDER THE PILOT PROGRAM
----------------------------------------------------------------------------------------------------------------
Cumulative review time (days)
Total \2\
Type of device Class elapsed --------------------------------
time \1\ 3rd party
\3\ FDA Combined
----------------------------------------------------------------------------------------------------------------
Low density lipo-protein reagent......................... I 51 8 16 24
Low density lipo-protein reagent......................... I 51 8 16 24
Operating table (electrohydraul)......................... I 126 12 9 21
Transcutaneous electrical nerve stimulator (TENS)........ II 103 40 8 48
hCG test strip........................................... II 22 8 2 10
----------------------------------------------------------------------------------------------------------------
\1\ Total days from third party's receipt to FDA's final action.
\2\ Includes third party and FDA review time only, i.e., excludes days when both FDA and third party review were
suspended pending receipt of additional information from the submitter and days between mailing and receipt of
correspondence.
\3\ Based on preliminary information reported by the third party.
During the first seven months of the pilot program, from August
1996 through February 1997, FDA received more than 600 510(k)'s for
third party-eligible devices which were not submitted to third parties.
During this period, FDA's final actions on 510(k)'s for these types of
devices were taken in an average of 79 cumulative FDA review days, with
an average total elapsed time from FDA's receipt to final action of 113
days, including time ``on hold'' awaiting additional information from
the submitter.
Question. Are you planning to add more eligible products to this
program?
Answer. Yes. Based on public comments FDA has received about the
pilot, we intend to make substantially more Class II devices eligible
for third-party review. We are currently preparing a list of at least
60 additional Class II devices for the pilot.
Question. How long will this take?
Answer. We expect to announce the list of additional Class II
devices by early June 1997. These devices will be made eligible for
third-party review as we complete guidance documents for these devices,
which we intend to do as rapidly as possible. We expect that at least
20 of the additional devices will be eligible for third-party review by
the end of fiscal year 1997, bringing the total number of eligible
Class II devices at that time to approximately 50. The remaining 40
additional Class II devices will be phased-in as soon thereafter as
possible.
Question. What are your success measures for this pilot, and when
were they established?
Answer. FDA's April 3, 1996 Federal Register notice stated that the
purpose of the pilot is to test the feasibility of using third-party
reviews to improve the efficiency of the agency's review of 510(k)'s
for low and moderate risk devices. The notice further specified that
this includes determining a number of factors which I will provide for
the record.
[The information follows:]
--the willingness of qualified third parties to participate;
--the willingness of device manufacturers to participate;
--the quality of third-party reviews, including the extent to which
third parties are free of conflicts of interest;
--the impact upon FDA workload, decisions, and 510(k) processing
times; and
--the impact on the total time necessary for manufacturers to obtain
marketing clearance decisions.
The notice elaborated that if the piloted approach is successful,
it will provide manufacturers with an alternate, potentially more rapid
means of obtaining pre-market reviews and enable FDA to target its
scientific review resources at higher risk devices while maintaining
confidence in the review by third parties of low and moderate risk
devices.
Question. How many applications have been reviewed under this
program so far?
Answer. As of May 1, 1997, FDA has received eight 510(k)'s under
the pilot program, although additional 510(k)'s may currently be under
review by the recognized third parties. FDA has issued substantial
equivalence decisions for five of the eight submissions, and has
requested additional information from the third parties for the
remaining three submissions.
Question. Is this sufficient to gauge the success of the program?
Answer. No. The number of submissions indicates that most
manufacturers of the eligible devices have elected not to participate
in the pilot. Therefore, the pilot has not provided a sufficient basis
to assess the quality or timeliness of third-party reviews.
Question. Why do you think more manufacturers are not taking
advantage of this program? Is it because you are doing a better job of
reviewing 510(k) applications and there is no incentive for
manufacturers to try this path to market?
Answer. FDA's success in eliminating the backlog of overdue 510(k)
reviews certainly limits manufacturers' incentive to try a different
approach. Based on industry comments, this is most true for Class I
devices, which generally have lower FDA review times than other device
types. Industry comments have suggested adding more Class II devices to
the pilot to encourage increased participation, and FDA is currently
working to do so. Other factors which may contribute to manufacturers'
lack of participation include: manufacturers are accustomed to
interacting with FDA; manufacturers are uncertain about the costs and
benefits of the third party approach; third parties assess
manufacturers a fee-for-service whereas FDA does not charge for 510(k)
reviews; and manufacturers do not know whether FDA will accept the
results of a third party's review, given that by law FDA must issue
substantial equivalence orders.
Question. What have you done to encourage participation from device
manufacturers?
Answer. Before initiating the pilot program, FDA solicited public
comments on the proposed approach for the pilot through a June 1995
Federal Register notice and a public workshop. FDA attempted to address
the resulting comments in its final plans for the pilot. For example,
FDA significantly expanded the number of eligible devices beyond what
was originally proposed, and established a 30-day performance goal for
its issuance of final decisions based on third-party reviews. After
announcing the pilot in the Federal Register, FDA promoted the pilot
through a July 1996 mass-mailing to approximately 13,000 registered
device firms. FDA also assisted the recognized third parties in
promoting the pilot by providing them with non-proprietary mailing list
information for device firms that have registered and listed with FDA
for the device types that are included in the pilot. FDA has also
provided frequent information about the pilot to the trade press and at
numerous professional and trade association meetings.
Question. Does this program offer a cost benefit to the Agency?
Answer. At the current level of participation, any efficiencies
which may be provided by third-party review are outweighed by the
start-up and operating costs of the program. Given that the start-up
costs of a pilot program such as this are relatively high, however, FDA
had anticipated that third-party reviews may not yield a cost benefit
to the agency during the pilot phase. We believe it is premature to
draw any final conclusions about the pilot given that participation may
increase as additional devices become eligible for third-party review
and as manufacturers obtain more information about the outcomes of
third-party reviews. FDA intends to complete an evaluation of the pilot
before the end of its planned 2-year duration.
Question. The ``Report on Medical Device Review Performance 2nd and
3rd quarters fiscal year 1996'' submitted to the Appropriations
Committee indicates that some of the offices within the Office of
Device Evaluation are piloting the use of electronic transmission of
applications to help ease the burden of the current paper-intensive
submission process. The document states that electronic access will
also provide significant savings on the storage and retrieval of
applications for both industry and the agency. How many sponsors of
applications have taken advantage of this system?
Answer. Through the first half of fiscal year 1997, there were 34
applications submitted electronically, by seven different sponsors.
These applications included 510(k)'s, PMA's, PMA Supplements, IDE's,
and IDE supplements.
Question. Could you give me some idea of what you mean by
``significant savings''? Do you have any information on full-time
equivalent's (FTE's) or FTE staff hours that are saved by the
utilization of electronic submissions?
Answer. Significant savings will be realized when the majority of
medical device applications arrive in electronic form. We will then be
able to eliminate our costly process of scanning paper to make document
images available to reviewers. That contract effort costs FDA about
$1,000,000 per year of which 75 percent goes toward the scanning of
pre-market applications. In addition, savings are foreseen in the
preparation of the reviewers notes, the resolution of questions asked
of the sponsor and the final review document. We do not yet have
sufficient statistics to project actual savings. However, based on our
limited sample, an overall savings of one week in total elapsed time of
the application review process for each pre-market application is a
reasonable projection. The quality of the review will also be improved
by having access to more information in a shorter time period.
Question. How do review times for ``paper less'' applications
compare to the current method?
Answer. Reduced review times are difficult to estimate based on our
small sample of experience with electronic submissions. Anecdotal
experiences have shown a reduction of reviewer time of several hours
for a single electronic search which otherwise would have to have been
accomplished manually. One company has estimated that they experienced
a savings of 20 percent in the time required to prepare a submission to
the Agency. It is anticipated that additional savings in review time
will be gained from the use of electronic conferencing between reviewer
and sponsor.
Question. What is your projection on when FDA will have moved into
a ``thoroughly paper less program''?
Answer. FDA's Center for Devices and Radiological Health could be
prepared for all applications to be submitted electronically within the
next twelve months. It will then be up to the medical device industry
to take advantage of the technologies available. This could happen to a
significant extent in the next two to three years.
Question. What is the estimated cost of moving to a ``paper less''
system''?
Answer. Beyond what has already been invested in our moving towards
a ``paper less'' system, another $1,000,000 will be used to complete
the upgrades of desktop equipment, storage devices, and software, and
to provide training, and personal video conferencing and group video
conferencing capabilities for all reviewers. Another $500,000 per year
will be utilized to maintain pace with the technology.
Question. Can all FDA's systems ``talk'' or link up with one
another--for example, those systems that you use to track reports? For
example, is the MAUDE system designed to process the MEDWATCH forms
compatible with all FDA's other reporting systems? Is there any
duplication in FDA's reporting systems?
Answer. The Agency is now implementing a common Information Systems
Architecture, or ISA, which will provide a consistent technology
infrastructure across the FDA to ensure that systems developed
throughout the Agency will be compatible with each other. Legacy
systems are being evaluated to determine if they should be modified to
conform to the new ISA standards. Initiatives are underway to guide the
submittal and dissemination of information to and from the Agency via
Internet and other communication mechanisms to assure compatibility
across the FDA. One such example is the development of an Agency
``Gateway'' designed to provide a single receipt point for the
electronic submission of adverse event reports from industry.
Recently developed FDA reporting systems were designed for
compatibility where appropriate and are not duplicative. These systems
were designed to support specific legislative mandates and regulatory
processes which differ from one FDA Center to another and even from
program to program within a Center. For example, MAUDE was designed to
fully integrate with other medical device databases and was designed
for data element compatibility with other Agency systems collecting
MedWatch data. However, the design of MAUDE also had to support unique
requirements for reporting medical device adverse events, from the Safe
Medical Devices Act of 1990, including specific data elements,
reporting time frames, and report flows which differ significantly from
other Centers' MedWatch reporting requirements.
Question. What does the FDA fiscal year 1998 salaries and expenses
appropriations request mean in real terms for the device industry? What
can be expected in terms of review times for 510(k)'s and PMA's?
Answer. FDA is requesting a total program level of $166,072,000
which includes a $5.2 million proposed increase for user fees for
medical device review of PMA applications and PMA supplements and 1,623
FTE for the Medical Device program. Without this increase, the total
base level for the program would be $160,872,000. Medical device review
is the Center for Devices and Radiological Health's, or CDRH's, highest
resource priority and the number of FTE spent on device review has been
steadily increasing between fiscal year 1993 and fiscal year 1996. FDA
has undertaken several management initiatives to reinvent its medical
device program in an effort to minimize industry workload and better
use its own resources. I would be happy to provide a list for the
record.
[The information follows:]
Exempting nearly three-fourths of all Class I device categories
from the 510(k) pre-market clearance requirement;
Undertaking a pilot program to test third-party review of low and
moderate risk-medical devices by outside organizations;
Conducting a project management initiative for PMA's in two device
review divisions;
Developing a ``real time'' review pilot for some types of PMA
supplements where the supplement will be reviewed by FDA during a
meeting or tele-conference with the industry;
Initiating a one-year pilot project to test a new way to handle PMA
supplements pertaining to changes in product manufacturing and/or
sterilization sites; and
Implementing new strategies to aid in IDE development and review.
FDA will also continue its efforts to streamline and support a more
stable and predictable review process. FDA expects a 15 percent
increase in PMA workload from fiscal year 1997 to fiscal year 1998 due
to requests for reclassifications and submissions or required
preamendments PMA's. In addition, efforts will be made to limit the
increase in the number of pending PMA's in fiscal years 1997 and 1998.
The following chart shows projected fiscal year 1998 product
performance at Base Resource levels:
------------------------------------------------------------------------
Fiscal year 1998 performance 510(k) PMA
------------------------------------------------------------------------
Pending from fiscal year 1997................. 1,929 86
Received in fiscal year 1998 (est.)........... 4,800 70
Completed in fiscal year 1998 (est.).......... 5,000 55
Pending from fiscal year 1998 (est.).......... 1,729 101
Reduction in percent pending fiscal years 1997-
98........................................... -10 +17
------------------------------------------------------------------------
Question. Will FDA be able to keep up with its current performance
goals for 510(k)'s and PMA's with the resources requested for fiscal
year 1998?
Answer. FDA will not be able to maintain current performance goals
for 510(k)'s and PMA's with base level resources requested for fiscal
year 1998. FDA is requesting the addition of $5,207,000 to the Medical
Devices budget to improve the quality and timeliness of its review
process for Class III pre-market approval applications, or PMA's, and
PMA supplements. Since PMA devices by definition are essentially
``new'' and medically important products, they represent the highest
potential risk to patients. Given this, our goal is to focus our
resources on high-risk, high-impact products, or work areas to maximize
public health impact. In addition, FDA expects a 15 percent increase in
PMA workload from fiscal year 1997 to fiscal year 1998 due to requests
for reclassifications and submissions of required preamendment PMA's.
While FDA has made great strides in reducing its review times and
backlogs for medical device applications, continued improvement is
needed to meet mandated goals. Additional resources will allow FDA to
allocate more resources toward the PMA process and to limit the
increase in pending PMA's without jeopardizing the recent performance
gains made in the 510(k) program.
FDA knows that resources will continue to be scarce, and is
beginning to re-engineer the medical device program to obtain maximum
public health impact from the resources that will be available. The
goal behind this effort will be to focus resources on high-risk, high-
impact products while at the same time de-emphasizing areas that pose
lower risk to the public, or where FDA involvement is not essential.
The improvements and changes that arise from the re-engineering process
will ensure that the medical device program is as effective and
efficient as possible, and may increase productivity in the future.
We are providing a table that shows FDA's fiscal year 1998
performance goals for PMA workload at base resource levels and with
additional resources.
[The information follows:]
ESTIMATED FISCAL YEAR 1998 PERFORMANCE GOALS FOR FDA
------------------------------------------------------------------------
Performance goals--
-------------------------
$5.2
Base level million
resources additional
(percent) resources
(percent)
------------------------------------------------------------------------
PMA originals:
Complete first actions on Standard PMA's
originals within 180 days................ 35 50
Complete expedited first actions within
180 days................................. 85 90
PMA supplements:
Complete first actions on standard PMA
supplements within 180 days.............. 35 80
Complete expedited first actions within
180 days................................. 85 90
------------------------------------------------------------------------
FDA is committed to achieving the following review times at base
level resources:
FISCAL YEAR 1998 PERFORMANCE GOALS WITH BASE RESOURCES--INCREASED PMA WORKLOAD
----------------------------------------------------------------------------------------------------------------
510(k)'s PMA's
----------------------------------------------------------------------------------------------------------------
Complete 80 percent first actions within 90 Complete 35 percent of first actions on standard PMA originals
FDA days, compared to 94 percent in fiscal within 180 days, compared with 53 percent in fiscal year 1996.
year 1996.
Complete 40 percent final actions within 90 Complete 55 percent of first actions on standard PMA supplements
FDA days. FDA completed 59 percent for the within 180 days, compared with 77 percent in fiscal year 1996.
first nine months of fiscal year 1996.
Complete 85 percent of expedited first actions within 180 days.
(FDA completed three out of four expedited applications filed in
fiscal year 1996 that have been under review at least 180 days).
----------------------------------------------------------------------------------------------------------------
Question. In the 2nd and 3rd Quarter Fiscal year 1996 Performance
Reports submitted to this Committee, FDA reported that CDRH utilized
approximately 565 FTE in premarket review activities. The fiscal year
1998 budget justification indicates that out of more than 1,600 FTE
designated for the medical and radiological devices program,
approximately 643 FTE will be utilized on premarket review activities.
What is meant by ``premarket review activities''? Does this include
more than simply reviewing applications?
Answer. Yes, premarket review activities include more than simply
reviewing applications. Premarket review activities are conducted by
CDRH and the Office of Regulatory Affairs, or ORA. For the record, I
would be happy to provide a list of activities included under pre-
market review activities.
[The information follows:]
510(k)'s (including Supplements)
IDE's (including Amendments)
IDE Supplements
PMA's (includes Amendments)
PMA Supplements
Petitions
Bioresearch Monitoring
Regulation/Policy Development
Pre-market Manufacturers' Assistance
Pre-market Liaison/Support Activities
Pre-market Activities for ORA include:
Preapproval Inspections
Data Integrity Audits
``For Cause'' Investigations
For fiscal year 1996, time reporting data shows FDA's CDRH used 565
FTE's in pre-market activities out of a program total of 643 FTE's. FDA
employs time reporting surveys to estimate actual resource use during
the year and to guide future formulation of resource requirements.
Question. Are all of the 643 FTE's devoted solely to premarket
review functions?
Answer. Yes, the 643 FTE represent total estimated FDA pre-market
resources for the Medical Device program for fiscal year 1998. The
fiscal year 1998 FDA distribution of resources for CDRH is 577 FTE and
for ORA is 66 FTE.
Question. Provide a breakdown of how these 643 FTE's are assigned,
i.e., how many work on: 510(k)'s, PMA's, PMA supplements, IDE's, and
IDE supplements.
Answer. The 643 FDA FTE's are assigned to CDRH and ORA. I would be
happy to provide the breakdown of how the 577 CDRH FTE are projected to
be used for pre-market evaluation activities in fiscal year 1998.
[The information follows:]
Pre-market Evaluation Activity FTE
510(k)'s (including Supplements).................................. 196
IDE's (including Amendments)...................................... 52
IDE Supplements................................................... 35
PMA's (includes Amendments)....................................... 150
PMA Supplements................................................... 52
Petitions......................................................... 7
Bioresearch Monitoring............................................ 23
Regulation/Policy Development..................................... 17
Pre-market Manufacturers' Assistance.............................. 22
Pre-market Liaison/Support Activities............................. 23
-----------------------------------------------------------------
________________________________________________
Total, CDRH FTE............................................. 577
The breakdown of pre-market activities for the Office of Regulatory
Affairs include:
Pre-market Evaluation Activity FTE
Preapproval Inspections........................................... 63
Followup to Preapproval Inspections............................... 3
-----------------------------------------------------------------
________________________________________________
Total, ORA FTE.............................................. 66
Question. In the quarterly reports to this Committee, the FDA
stated that in order to help PMA review, it has shifted FTE's to PMA
review during the year. Where did these FTE's come from?
Answer. The FTE that were shifted to PMA review during fiscal year
1996 came from the science base area. For fiscal year 1997 to 1998, we
plan to significantly increase the effort devoted to PMA reviews. This
will be done by transferring people from other work areas, primarily
the review of lower-risk devices under 510(k)'s. The additional staff
assigned to work on PMA's will be used to bolster the present work on
reviewing new and medically important PMA's as well as reviewing
preamendment PMA's and/or preparing reclassification actions. The
result should be timelier reviews while maintaining appropriate
scientific rigor.
Question. In the first quarterly report, FDA stated specifically:
``In addition, exempting more of the easiest-to-review Tier One
510(k)'s and shifting resources from 510(k)'s to PMA reviews may
increase 510(k) review times for the remaining 510(k) applications.
However, the 2nd and 3rd Quarterly reports indicate that FDA has ``been
able to continue improving 510(k) performance.'' How have you done
this?
Answer. We were able to continue improving 510(k) performance in
fiscal year 1996 because we increased the FTE in the 510(k) area and
the PMA area while reducing resources from the science base area.
Question. How many resources have you shifted from 510(k)'s to
PMA's?
Answer. We are projecting a shift of up to 15 FTE from the 510(k)
area to the PMA area in fiscal year 1997 and possibly an additional 15
FTE will be shifted in fiscal year 1998. Sufficient FTE, however, will
be retained for adequate review of complex 510(k)'s. We want to
continue to improve the timely review of higher impact and medically
important devices. To accomplish this, FDA's CDRH is in the process of
re-engineering the pre-market work processes to make them as efficient
and effective as possible. The re-engineering effort involves a risk-
based approach to increase the direct attention paid to reviewing those
medical devices that present an important clinical benefit or
significant risk to patients. FDA will also identify simplified,
alternative methods for reviewing routine, lower risk products in ways
that continue to provide adequate consumer protection, and also
continue reviewing devices that can be exempted from the 510(k)
process.
Question. Did FDA ever shift PMA resources to 510(k)'s in order to
reduce the backlog and review times? If so, what impact did this have
on the PMA review process?
Answer. FDA did not shift PMA resources to reduce the 510(k)
backlog. We temporarily shifted some FTE from outside the program area
to assist in decreasing the backlog. Approximately 18 FTE from the
Office of Science and Technology, or OST, within FDA's, CDRH, were used
to conduct direct review of pre-market submissions. In fiscal years
1994 and 1995, CDRH also received a substantial amount of new resources
for medical device review and most of the new staff were assigned to
work on 510(k)'s. The additional review staff, coupled with several
management initiatives for the 510(k) process, enabled FDA to
substantially reduce the backlog of overdue and pending applications.
Question. The reports, along with the fiscal year 1998 budget
justification, indicate that a 33 percent increase in PMA workload is
expected from fiscal year 1996 to 1997, and another 15 percent increase
is projected in fiscal year 1998. Do you plan to continue to shift
resources from 510(k) reviews and, if so, how do you plan to continue
to maintain or improve 510(k) review times?
Answer. In fiscal year 1997, we project shifting up to 15 FTE from
review of lower-risk devices under 510(k)'s to the PMA area. In fiscal
year 1998, an additional 15 FTE possibly will be shifted to the PMA
area.
The 510(k) devices encompass a broad variety of devices whose risk
potential varies widely. We plan to focus our resources on the 510(k)'s
with the greatest technological complexity and uncertainty as to safety
and effectiveness. Because of the potential public health impact for
these types of devices, we plan to increase the personnel assigned to
reviewing them. Again, these people will be reassigned from the review
of lower risk 510(k)'s. We will identify alternative mechanisms for
providing adequate public health protection for the lower risk 510(k)'s
by redirecting or reducing FDA's direct involvement. In fact, by fiscal
year 1999, we anticipate developing alternative regulatory mechanisms
for 33 percent more lower risk devices. Further, improving upon the
current high level of 510(k) review time would be difficult because the
remaining 510(k)'s will be the more complex applications involving more
scientific issues and data.
office of regulatory affairs
Question. Dr. Friedman, you indicate in your testimony that the
Office of Regulatory Affairs began implementing a new automated
system--called Operational and Administrative System for Import Support
(OASIS)--that greatly speeds up FDA's handling and clearance of
imported products. How is this new paperless processing system helping
the agency to maintain its surveillance of the rapidly mounting number
of imports of FDA-regulated products?
Answer. The OASIS computerized electronic entry review system is
the cornerstone of FDA's strategy which aims to be responsive to the
need of the importer/broker for speedy access to domestic commerce
while maintaining adequate watch on imported goods.
OASIS greatly speeds up FDA's handling and clearance of imported
products, and operates in a largely paperless environment. Data FDA
needs to make its admissibility determinations are transmitted
electronically, and FDA's decisions are communicated electronically
back to the brokers.
With OASIS, the initial FDA admissibility determination on every
shipment is provided to the broker within eight minutes after the
broker submits the entry data. Eighty percent of all shipments get
their final FDA clearance within those eight minutes, and over 85
percent are given clearance within three hours, all completely without
paper.
The nationwide roll out of OASIS, FDA's new automated system for
processing shipments of foreign-origin products seeking to enter the
U.S., is underway. On December 2, 1996, OASIS was implemented at FDA's
Seattle, Philadelphia, Baltimore, and New Orleans districts. On January
23, 1997, OASIS was implemented at FDA's Atlanta and San Juan
districts, and at San Francisco and Kansas City districts on February
19. The rest of the OASIS roll out will be to Detroit and Minneapolis
districts in March; Florida and Nashville in April; Dallas and Denver
in May; Cincinnati and Chicago in June; New York in July; and Los
Angeles, Buffalo and New England districts in September. By the end of
September, 1997, OASIS will be operational at every FDA district,
covering every U.S. port of entry where FDA-regulated products come in
by sea, land, and air.
OASIS will enhance FDA's ability to identify problem shipments by
improving our capability to target products with a history of non-
compliance and those products which constitute a high risk for a
potential public health hazard. Further, it will help assure that
problem products and manufacturers are recognized as such in whatever
port they are entered, thereby limiting the problem of ``port
shopping.''
OASIS operates in conjunction with the U.S. Customs Service's
Automated Commercial System, or ACS. A line is a unique item on an
import entry differentiated by country of origin, manufacturer,
container size, or product. For lines regulated by FDA, the filers send
information required by both Customs and FDA when offering the shipment
for entry. For electronically filed entries, ACS assembles a set of
data for FDA by combining Customs and FDA data. The lines are then
electronically screened against a set of criteria developed and
maintained by FDA using OASIS.
The screening determines if the lines match any of the established
criteria based on product, manufacturer, shipper, country of origin, or
any combinations of these four screening elements. The results of the
screening are summarized at the entry level and passed as an electronic
message back to the filer.
The purpose of this initial electronic screening is to forward to
FDA for further review those products with which, based on the product
itself, the country of origin, manufacturer or shipper, FDA may have
further regulatory interest and to do this on a uniform nationwide
basis. The screening criteria take into account such factors as FDA's
previous experience with the product, for example a high compliance
rate or low compliance rate, planned surveillance work in various
program areas, emerging problems or trends, and the capacity of FDA
field staff to collect and examine imported product. FDA is capable of
changing the electronic screening criteria in OASIS within minutes as
the need arises to respond to emerging problems.
For those products that are flagged as ``FDA Review'' during the
initial electronic screening, the entry data is loaded into a different
database and screened again using more sophisticated criteria. It is
then made available for review by the initial OASIS user, the FDA entry
reviewer. At this time, OASIS enables the entry reviewer to request
possible actions and OASIS presents all applicable guidance, such as
Import Alerts, Surveillance Programs, and Assignments, which may apply
to the line to assure that all available information is evaluated when
an entry decision is made. Based on this additional review, the FDA
entry reviewer will make a decision to detain, sample, or release the
entry. Once all lines of an entry have been processed, a decision
message for each line is electronically sent to the filer. Further, for
the first time, OASIS enables FDA to maintain a readily accessible
database of FDA regulated products that have entered the U.S. This
capability of accessing information on previous shipments of products,
who shipped them and who received them, has proven to be a very
valuable tool in responding to possible health hazards associated with
imported products. We are now able, in a very short time, to identify
who may have received products of concern and plan appropriate follow-
up.
Question. What level of funding is being provided for fiscal year
1997 for the implementation of OASIS? What level of funding is included
in the fiscal year 1998 appropriations request for this system?
Answer. Development and maintenance of OASIS will require
approximately $1,500,000 in fiscal year 1997. The estimate for fiscal
year 1998 is $1,650,000.
Question. Will additional investments in OASIS be required in
future fiscal years? If yes, please identify the level of funding
required by fiscal year.
Answer. It will cost approximately $500,000 per year to maintain
the OASIS system in the outyears.
blood supply and blood product safety
Question. What are FDA's current procedures in dealing with adverse
incidents in blood products when they occur?
Answer. Under 21 CFR 600.80, licensed manufacturers of biological
products, including blood derivatives, are required to report adverse
experience information to FDA. Manufacturers are required to report
serious and unexpected adverse experiences within 15 working days of
initial receipt of the information. They are required to report other
adverse experiences at periodic intervals. FDA has required that plasma
derivative manufacturers file monthly reports on adverse reactions,
including reports of potential transmission of infectious diseases,
associated with their products to assure that incidents involving
potential transmission of infectious agents are investigated
expeditiously. In addition, manufacturers are required to investigate
reports of adverse experiences. Whole blood and blood component
manufacturers are not subject to the adverse experience reporting
requirements in 21 CFR 600.80, but they are required to investigate
such reports under 21 CFR 606.170(a). Blood and blood component
manufacturers are required to report deaths under 21 CFR 606.170(b).
The FDA may receive reports of incidents of Adverse Experience
Reports, or AER's, from a number of different sources. The Centers for
Disease Control and Prevention, or CDC, reports directly to FDA any
adverse events associated with blood products that it receives. These
reports generally come from the FDA's MedWatch system, manufacturers,
or consumers. The Agency has evaluated its procedures for processing
these AER's and implemented additional steps to have AER's relating to
biological products provided directly to FDA's Center for Biologics
Evaluation and Research, or CBER, in an expedited manner. FDA is
currently developing a proposed rule to require unlicensed
establishments to report errors and accidents to the Agency. This rule
will provide FDA with a more accurate surveillance of the nation's
blood supply and facilitate a rapid response where public health may be
at risk. This is under review in the Agency and will be forwarded to
OMB in the next few months.
CBER also has a Standard Operating Procedure, or SOP, for emergency
operations. This document provides guidance to CBER staff on the
procedures to be used in situations that might constitute a threat to
the public health. The SOP designates contacts in CBER's review
offices, Office of Blood Research and Review, Office of Vaccine
Research and Review, and Office of Therapeutics Research and Review,
and compliance components. These individuals are the focal points for
evaluating and ensuring rapid responses to significant and serious
reports of AER's that present public health concerns and may represent
emergency situations. These officers, in consultation with other
appropriate experts, such as the Office of Regulatory Affairs, evaluate
the information provided in the AER, determine if more information is
needed to fully assess the impact of the incident, and initiate a
response to the incident based on the threat or potential threat to the
public health.
AER's from plasma derivative manufacturers which are determined to
be a public health threat, result in expedited actions which include,
but are not limited to, initiating establishment inspections to conduct
a complete assessment of manufacturing practices, determine the manner
in which a manufacturer responds to AER's pursuant to Good
Manufacturing Practices, or GMP's, and reporting requirements, and
evaluating proposed corrective actions and planned responses and public
notifications by the manufacturer.
Question. How does the FDA coordinate with and respond to CDC when
CDC reports a transmission of infectious disease related to the blood
supply or blood products?
Answer. The FDA has extensive interactions at all levels with its
sister Public Health Service agencies, CDC and NIH, on blood safety
issues.
In October 1995, Secretary Shalala accepted the recommendations of
a Department task force reviewing the July 1995 Institute of Medicine,
or IOM, report on HIV and the blood supply. In response to these
recommendations, the Secretary raised blood safety to the highest
levels of Department concern. The Assistant Secretary for Health was
designated to be the Blood Safety Director, with overall responsibility
for coordination and oversight of the Public Health Service's blood
safety programs.
Working with the Blood Safety Director is the Blood Safety
Committee which includes the Director, NIH; the Director, CDC; the
Administrator, Health Care Financing Administration; and the
Commissioner of Food and Drugs. The Blood Safety Committee has been
meeting periodically since January 1996. The PHS Advisory Committee on
Blood Safety and Availability further supports this effort. This
Advisory Committee includes representatives of industry, consumers,
scientific experts and ethicists. Its purpose is to provide a forum to
examine broad public health and societal implications of blood safety
issues.
Since its inception in 1996, the Blood Safety Committee has been
informed of adverse events or emergency situations whenever they are
likely to have broad public health impact or require increased
coordination between the public health agencies.
The CDC has created a position of Assistant Director for Blood
Safety in the Division of Viral and Rickettsial Diseases, to facilitate
interactions with FDA on blood issues. FDA also receives input from CDC
and NIH on issues of blood safety through other mechanisms. CDC and NIH
representatives serve as members of the Blood Products Advisory
Committee which provides scientific advice to FDA on a variety of
issues including product approvals. NIH and CDC representatives also
serve on the Transmissible Spongiform Encephalopathies, or TSE,
Advisory Committee which advises FDA on TSE issues including their
possible impact on blood and blood products. NIH and CDC participate in
the interagency Advisory Committee on Blood Safety and Availability
which holds monthly teleconferences to discuss issues affecting blood
safety. Together, these efforts ensure that CDC and NIH have input at
the highest levels of FDA and the Department concerning blood safety.
The CDC has a number of different systems for surveillance of
current or potential threats related to the transfusion of blood/blood
products. These include disease-specific surveillance systems, donor-
based systems for HIV, and recipient-based systems. Identification of
previously unknown agents may occur through epidemiological
investigations or emerging infection projects. CDC reports directly to
FDA any adverse events associated with receipt of blood and blood
products that are identified through its surveillance systems or
epidemiologic investigations. The CDC routinely provides input to the
FDA's Blood Products Advisory Committee, affording the Committee the
benefit of this surveillance expertise.
As described previously, the Agency procedures for evaluation and
response to AER's includes consultation as necessary with appropriate
experts. The expertise needed may require contact with the CDC. The
purpose of the contact is to gather additional surveillance data that
may be available and to coordinate investigational efforts at user
sites where significant adverse events have occurred.
The CDC also participates in product investigations by conducting
epidemiological studies or assisting with scientific analysis. Recent
examples include Centeon Albuminar in which CDC provided
epidemiological assistance in investigating cases of individuals
affected by bacterially contaminated product and Alpha Factor VIII and
Factor IX in which the CDC provided epidemiological and laboratory
assistance in investigating the transmission of Hepatitis A virus from
clotting factors. NIH and CDC also share information from large scale
surveillance studies on blood safety issues such as the retrovirus
epidemiology in donors study, the transfusion transmitted virus study,
and the transfusion safety study.
FDA recognizes the sentinel role that CDC plays in safeguarding our
nation's blood supply. CDC, in cooperation with FDA, has been
conducting surveillance in this country for a rare strain of HIV-1,
group O, through the CDC surveillance program. In 1996, the first two
cases of HIV group O were reported because of these efforts. FDA has
advised manufacturers to improve their test kits to detect these novel
strains of HIV and is currently reviewing applications for HIV test
kits to detect HIV group O. These issues were discussed at public
sessions of FDA's Blood Products Advisory Committee held in September
1996. In cooperation with CDC and NIH, FDA has established a working
group to identify and obtain samples from individuals infected with
novel HIV strains worldwide. These samples will be used to ensure that
HIV tests used in this country can detect novel HIV strains before they
reach our country. As a precautionary measure, FDA issued
recommendations in December 1996 to defer from donating blood
individuals who were in countries identified as endemic for HIV-1
Group.
In 1996, FDA approved tests to detect HIV antigen in blood donors.
FDA issued recommendations to blood banks to implement HIV antigen
tests when they were licensed. These HIV antigen tests are used in
addition to tests to detect antibodies to HIV and serve to further
close ``the window period'' for HIV by providing another level of
assurance to prevent HIV transmission through blood and blood products.
FDA worked with CDC in developing recommendations for the use of tests
such as the HIV p24 antigen test in non-blood bank clinical care
settings and these were published in the CDC's ``Morbidity and
Mortality Weekly Report.''
One example of FDA interactions with CDC and NIH involves the
potential transmission of Creutzfeldt-Jakob Disease--CJD--through blood
products. CJD is a transmissible spongiform encephalopathy possibly
caused by a protein called a prion. FDA has been involved in national
and international efforts focused on better understanding Transmissible
Spongiform Encephalopathies, or TSE, including CJD. In this area, FDA
has collaborated extensively with NIH and CDC, as well as the United
States Department of Agriculture, and affected industries and consumer
groups.
FDA has formed an intra-agency working group composed of the FDA
Deputy Commissioner for Operations and experts from each FDA Center to
consider transmissible spongiform encephalopathies and their impact on
FDA regulated products. A special CJD advisory committee was formed in
1995, and was rechartered in June 1996 for two additional years as the
TSE Advisory Committee. The TSE Advisory Committee has met periodically
to provide advice to FDA, most recently, in April of this year. Issues
related to blood safety and CJD have been discussed periodically with
these committees.
FDA has also taken other precautionary measures to safeguard the
blood supply. In August 1995, FDA issued recommendations for the
deferral of blood donors at risk for CJD. FDA issued revised
recommendations in December 1996 to clarify familial risk following a
discussion of this issue by the TSE Advisory Committee. CDC is
conducting surveillance studies to look for CJD in this country in
patients who have diseases associated with increased exposure to blood
and blood products, such as persons with hemophilia. No association
between hemophilia and CJD has been found to date. In addition, FDA,
CDC, NIH and industry have been cooperating in scientific studies to
assess the risk of transmission of CJD by blood and blood products.
These studies are ongoing. The issue of CJD transmission by blood and
blood products was discussed at the Advisory Committee on Blood Safety
and Availability in April of this year.
Question. What efforts have been taken to move forward in improving
rapid patient and physician notification when an adverse incident
occurs?
Answer. The FDA is working with industry and consumer groups to
identify more efficient and effective consumer notification methods.
These notifications range from product alerts and quarantine notices to
product recalls. The Agency has detailed guidelines at 21 CFR, Part 7
which outline the responsibilities and expectations of manufacturers in
conducting field corrections of marketed products that represent a
potential threat to the health of consumers. In addition, FDA can order
the recall of biological products that present an imminent or
substantial hazard to the public health. Plasma derivative
manufacturers are required to file monthly reports on adverse reactions
associated with their products to assure that potential transmissions
of infectious agents are investigated expeditiously. The FDA has also
taken further steps to address the issue, which I would be happy to
provide for the record.
[The information follows:]
--The Agency utilizes electronic communications including the CBER
World Wide Web Home Page, fax-on-demand, press releases and
talk papers, and a Blood and Plasma Products hotline to
disseminate information concerning product recalls and market
withdrawals.
--FDA has instituted communication of withdrawals and/or recalls of
plasma derivatives to consumer groups such as the National
Hemophilia Foundation and the Committee of Ten Thousand, as
appropriate.
--A PHS meeting, including FDA, CDC, and the National Heart, Lung,
and Blood Institute, or NHLBI, was convened in November 1996 to
discuss and obtain public input on notification of the public
on recalls and ongoing investigations. An interagency working
group discussed proposals to track products by lot number to
recipient at a March 1997 Blood Products Advisory Committee
meeting. The industry representatives were encouraged to
develop plans to more effectively notify blood product end-
users of recalls and market withdrawals.
--On September 9, 1996, FDA in cooperation with HCFA issued a final
rule on, ``Current Good Manufacturing Practices for Blood and
Blood Components: Notification of Consignees Receiving Blood
and Blood Components at Increased Risk for Transmitting HIV
Infection.'' This rule requires blood establishments to notify
consignees of HIV lookback cases so that physicians or other
health care workers can be notified and, where appropriate,
recipient notification can occur.
--In December 1996, FDA advised plasma derivative manufacturers to
modify their labeling of plasma derivatives to include warnings
about the potential of these products to transmit infectious
diseases.
--The Agency has continued efforts to make the public aware of FDA's
decision-making process on evaluating AER's, initiating
recalls, clarifying present operating procedures and
encouraging the use of new technologies for notifying
consumers.
The FDA holds periodic meetings with consumer organizations such as
the National Hemophilia Foundation and the Committee of Ten Thousand to
discuss these issues.
fiscal year 1997 reprogramming notification
Question. On April 10, 1997, I received a letter from Secretary
Shalala notifying me of the agency's plan to reallocate funds
identified in the fiscal year 1997 Committee Report and adopted by the
Conference committee. While the letter identifies four specific changes
in accordance with the established reprogramming thresholds, it does
not adequately identify where these funds are being shifted to or taken
from and for what reasons. Included is a copy of the April 10, 1997,
letter and the backup summary table the agency provided to the
Committee.
[The information follows:]
Letter From Donna E. Shalala
Secretary of Health and Human Services,
Washington, DC., April 10, 1997.
Hon. Thad Cochran,
Chairman, Subcommittee on Agriculture, Rural Development, and Related
Agencies, Committee on Appropriations, U.S. Senate, Washington,
DC.
Dear Mr. Chairman: I am writing to inform you of our plan to
reallocate funds which were identified in the fiscal year 1997 Senate
Appropriations Committee Report, and adopted in the Conference Report,
to more accurately reflect fiscal year 1997 costs of the National
Center for Toxicological Research (NCTR). As described in the enclosed
information, the estimate the Food and Drug Administration (FDA)
provided to the Committee for inclusion in the fiscal year 1997 report,
was substantially higher than the base funding level for NCTR. The
resources resulting from this action have been reallocated to other
program activities. These reallocations have been reflected in the
fiscal year 1998 Congressional Justification. We regret any confusion
that this has created.
Also enclosed is information informing the Committee of FDA's plans
to implement the regulations on nicotine-containing tobacco products,
and to more appropriately allocate the funds remaining under ``Program
Management,'' thus eliminating that as a separate budget activity. In
addition, FDA plans to reduce the amount of funding for the Orphan
Product Grants program to help defray the costs of pay increases and
inflation absorbed by the agency. This reduction in funds may result in
a decrease in the number of new grants awarded in fiscal year 1997.
The specific impact of each funding reallocation on program
activities is detailed in the enclosure to this letter. The enclosure
summarizes these changes by program activity.
I appreciate the Committee's continued interest in and support of
the activities of the Food and Drug Administration.
Sincerely,
Donna E. Shalala.
Enclosure.
______
The Food and Drug Administration
proposed reallocations--fiscal year 1997
National Center for Toxicological Research (NCTR)
Senate Committee Report Funding Table: $37.0 million
Fiscal Year 1997 Current Estimate: $31.3 million
NCTR relies on a high level of contract support for managing its
facilities, maintaining its animal colonies, and for many other
research support services. In past years, FDA has redirected funds
toward the end of the year from other programs to NCTR for its contract
support. NCTR's operating budget is then reduced by the same amount at
the beginning of the next year so that the base level of funding
remains relatively constant. The agency is not able to provide these
additional funds to the NCTR at a consistent level every year, but
endeavors to keep the NCTR funded at a ``base'' level of funding
necessary to sustain its current level of operations, including
mandated contract labor increases. The amount FDA provided to the
Committee for inclusion in the fiscal year 1997 Committee report was
based on fiscal year 1995 actual obligations (when a substantial amount
of funds were redirected to NCTR) and a fiscal year 1996 estimated
obligation level that proved to be too high. The fiscal year 1997
estimate in the fiscal year 1998 Congressional Justification reflects,
the current planned level of funding for NCTR and for all other
Centers.
additional information
Regulation of Nicotine-Containing Tobacco Products
Senate Committee Report Funding Table: Not separately identified
Fiscal Year 1997 Current Estimate: $4.9 million
The fiscal year 1998 Congressional Justification establishes
Tobacco as a separate program activity to adequately reflect the
resources planned for FDA activities related to the regulation of
nicotine-containing tobacco products. FDA plans to devote approximately
$4.9 million during fiscal year 1997 to implement the regulation of
nicotine-containing tobacco products. In previous years, funding for
the tobacco initiative came from funds allocated to the Office of the
Commissioner. Funding for this effort in fiscal year 1997 will come
from general reductions in funding for ``Other Activities.'' Although
we intend to report our costs for this initiative separately, this
effort will be housed, for administrative purposes, within the Office
of Policy, at least through the initial implementation stage.
As you know, on August 23, 1996, President Clinton approved FDA's
final rule for the regulation of nicotine-containing tobacco products.
The final rule limits the availability and appeal of tobacco products
to young people. Our goal is to promote and protect the health of our
nation's youth by reducing the easy access and strong appeal of these
products to children, before they become addicted.
Our efforts during fiscal year 1997 will focus on outreach and
preliminary enforcement activities. The new rule requires certain
actions to be implemented during fiscal year 1997. The requirement for
vendors to check age/photo ID's before selling these products to young
people by February 28, 1997, has been implemented. All other provisions
of the regulation, except those related to sponsorship, are to be
implemented by August 28, 1997. Approximately $2 million of the total
fiscal year 1997 budget will be allocated to States to provide training
for State and local officials who will help enforce FDA's rule. The
remainder of the budget will be used for outreach activities to educate
and mobilize state and local public health, law enforcement, and other
officials and to raise awareness about the new rule with community
organizations, parent groups, voluntary health groups and others.
Program Management
Senate Committee Report Funding Table: $6.1 million
Fiscal Year 1997 Current Estimate: Not separately identified
In its fiscal year 1997 report, the Committee requested a new
presentation of Other Activities. A significant portion of what had
been Program Management was moved to Other Activities. The only portion
of Program Management remaining after this change, was related to
Direct Field Management. Since funding for all other field activities
are reflected in the appropriate program lines, we are doing the same
for Direct Field Management, thus eliminating Program Management as a
separate program activity.
Orphan Products Grants
Senate Committee Report Funding Table: $12.2 million (excludes
extramural services)
Fiscal Year 1997 Current Estimate: $11.3 million
During fiscal year 1997, FDA plans to reduce the funding for Orphan
Product (OP) grants. FDA's budget has been at a constant level for the
past three years. In real terms, however, the agency's resources have
been declining due to pay cost increases and inflation absorbed by the
agency. Because of this, we have had to reduce many operating costs.
During this same time, the OP grant program has not been reduced. In
fiscal year 1997, however, we plan to reduce the funding for OP grants
to $11.3 million. Please also note that, in the fiscal year 1998
Congressional Justification, the cost of the OP grants program has been
moved from ``Other Activities'' and included in the program activities
directly related to these grants (Human Drugs and Medical Devices and
Radiological Products). This is consistent with all other grant
programs.
FOOD AND DRUG ADMINISTRATION FISCAL YEAR 1997 APPROPRIATION ESTIMATES
[Dollars in thousands]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal year 1997 Senate Committee Changes-- Fiscal year 1998 congressional budget
recommendations-- ---------------------------------------------------- request--Fiscal year 1997
--------------------------------------- appropriations--
Program SBIR and Program Other --------------------------------------
Program PDUFA/MQSA S&E Tobacco OPD grants management changes Program
totals totals PDUFA/MQSA S&E
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Foods......................................................... $194,156 ........... $194,156 ........... ........... $2,377 $3,702 $200,235 ........... $200,235
Human drugs................................................... 237,524 ($51,779) 185,745 ........... $11,345 1,463 1,537 252,081 ($51,991) 200,090
Biologics..................................................... 119,528 (27,992) 91,536 ........... ........... 244 (659) 122,435 (31,314) 91,121
Animal drugs.................................................. 38,022 ........... 38,022 ........... ........... 366 (857) 37,531 ........... 37,531
Medical devices and radiological products..................... 152,735 (13,403) 139,332 ........... 665 1,645 5,257 160,302 (13,403) 146,899
NCTR.......................................................... 36,977 ........... 36,977 ........... ........... ........... (5,670) 31,307 ........... 31,307
Program management............................................ 6,094 ........... 6,094 ........... ........... (6,094) ........... ........... ........... ...........
Tobacco....................................................... ........... ........... ........... $4,914 ........... ........... ........... 4,914 ........... 4,914
=================================================================================================================================
Other activities:
Office of the Commissioner................................ 15,365 (175) 15,190 (1,422) ........... ........... (2,446) 11,417 (95) 11,322
Office of Policy.......................................... 2,825 ........... 2,825 (1,164) ........... ........... 316 1,977 ........... 1,977
Office of External Affairs................................ 16,140 ........... 16,140 (518) ........... ........... (1,317) 14,251 ........... 14,251
Office of Management and Systems.......................... 55,082 (7,582) 47,500 (905) ........... ........... (1,666) 49,057 (4,128) 44,929
Office of Operations/Orphans.............................. 12,868 ........... 12,868 (905) (12,010) ........... 2,131 2,084 ........... 2,084
Central Services.......................................... 11,548 ........... 11,548 ........... ........... ........... (1,001) 10,547 ........... 10,547
---------------------------------------------------------------------------------------------------------------------------------
Subtotal, other activities.............................. 113,838 (7,757) 106,071 (4,914) (12,010) ........... (4,037) 89,333 (4,223) 85,110
=================================================================================================================================
Other rent and rent-related activities........................ 22,039 ........... 22,039 ........... ........... ........... 726 22,765 ........... 22,765
=================================================================================================================================
Total................................................... 920,903 (100,931) 819,972 ........... ........... ........... ........... 920,903 (100,931) 819,972
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Question. Why is the agency proposing to eliminate the program
management line-item after the Committee sought to separately identify
those costs in cooperation with the agency last year?
Answer. The fiscal year 1997 Senate Committee report language
directed FDA to make a number of changes to its budget structure,
primarily to more clearly delineate funding among the various
components of the Agency. In working on the requested changes, we
recognized this as an opportunity to make other changes that would
result in a more understandable and consistent budget presentation. One
of the Committee's directions was to split the line for ``Program
Management'', and to spread back funding directly attributable to each
program and to `other activities' as appropriate. This would help
provide the true costs of funding each program. Redirecting these costs
left only $6,094,000 in the old program management line for funding of
Direct Field Management. Since all other field costs had been
appropriately spread to the programs, we believed that it was
consistent to spread the field management costs to the programs as well
in order to achieve an understanding of the full cost for each program.
The roughly $6.1 million was spread back to each program to which
funding was directly attributable. For Foods, the amount is $2,377,000,
for Human Drugs, $1,463,000, for Biologics, $244,000, for Animal Drugs
and Feeds, $366,000, and finally for Medical Devices, $1,645,000.
Question. Please explain which line-items are being increased as a
result of the $5.670 million reduction for National Center for
Toxicological Research (NCTR) and the specific programs and activities
receiving enhanced funding as a result and the reasons for each
increase.
Answer. The adjustment of $5.7 million in the amount planned for
NCTR in fiscal year 1997 is not really a reallocation to other
programs, but an adjustment to reflect the true continuing costs of
FDA's major programs. The estimate for NCTR furnished to the Committee
in mid-1996 was too high because it was based on an unusually-high
level of funding for NCTR in fiscal year 1995.
The reason that the obligations for NCTR were unusually high in
fiscal year 1995 relates to the nature of NCTR's operating budget,
which includes a number of support service contracts. NCTR relies on a
high level of contract support for managing its facilities, maintaining
its animal colonies, and for many other research support services. In
past years, FDA has redirected funds toward the end of the year from
other programs to NCTR for its contract support. NCTR's operating
budget is then reduced by the same amount at the beginning of the next
year so that the overall level of funding remains relatively constant.
The Agency is not able to provide these additional funds to the NCTR at
a consistent level every year, but endeavors to keep NCTR funding at a
``base'' level necessary to maintain its current level of operations.
The Agency's current estimate for NCTR for fiscal year 1997 of $31.3
million is very similar to NCTR's actual expenditures for fiscal year
1996 of just under $31 million. The current fiscal year 1997 estimate
reflects the current planned level of funding for NCTR and for all
other programs.
Again, all of these adjustments are not truly program increases or
decreases, but adjustments to more accurately reflect the continuing
cost in fiscal year 1997 of the level of program activities conducted
in fiscal year 1996. However, since the fiscal year 1997 appropriation
did not include inflationary allowances, all programs have had to
absorb a reduction in their operating funds, and NCTR has had to absorb
its proportionate share of this reduction. To partially compensate for
this, the Agency did allocate an increase of $533,000 to NCTR early in
fiscal year 1997 to absorb some of the inflation in NCTR's contract
costs.
Question. The agency indicates that the new line-item of $4.9
million for the regulation of tobacco was created through a reduction
in ``Other activities''. Please explain which line-items under ``Other
activities'' were reduced, the impact of each reduction on the specific
office or activity from which these funds were taken. Is the funding
being moved from each of these ``Other activities'' that previously
dedicated to tobacco? If not, what is the impact of the reduction being
taken to provide increased funding for tobacco?
Answer. Yes, the funding for fiscal year 1997 is indeed coming from
the budgets of these same offices, and represents funding previously
dedicated to tobacco activities. I would be happy to provide, for the
record, a table showing the offices from where tobacco funding was
taken in fiscal year 1997.
[The information follows:]
Fiscal year 1997 current estimate
Tobacco................................................. +$4,914,000
Other activities:
Office of the Commissioner.......................... (1,422,000)
Office of Policy.................................... (1,164,000)
Office of External Affairs.......................... (518,000)
Office of Operations................................ (905,000)
Office of Management and Systems.................... (905,000)
--------------------------------------------------------
____________________________________________________
Total, tobacco funding............................ (4,914,000)
Question. What is the reason for the increase in non-GSA rent and
rent-related activities?
Answer. The increase in the S&E Rent and Related as shown in the
explanatory notes was based on the current estimated costs projected at
the time the President's Budget was presented. FDA has since further
refined its estimates, and to show the various elements of these costs
we are providing a chart which shows actual obligations since fiscal
year 1992 and a revised fiscal year 1997 estimate.
[The information follows:]
FIVE-YEAR HISTORY OF S&E RENT AND RELATED ACTIVITIES
[Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
Fiscal year--
-----------------------------------------------------------------
1992 1993 1994 1995 1996 1997 est.
----------------------------------------------------------------------------------------------------------------
Commercial rent and related services.......... $5,917 $5,865 $6,544 $6,510 $6,558 $6,558
Costs for FDA owned facilities................ 3,254 3,997 4,332 4,711 5,205 5,205
GSA rent-related services..................... 3,599 3,857 4,925 6,866 6,719 7,019
GSA building delegation services \1\.......... 5,341 5,306 3,630 3,580 3,976 5,418
-----------------------------------------------------------------
Total, S&E rent and related............. 18,111 19,025 19,431 21,667 22,458 24,200
----------------------------------------------------------------------------------------------------------------
\1\ The fiscal year 1997 estimate of $5.4 million for costs related to building delegated to FDA includes $1.4
million for MODULE II, FDA's new Lab facility in Beltsville, MD.
The new fiscal year 1997 estimate is based primarily on the costs
associated with MOD II. MOD II is a state-of-the-art laboratory, built
and owned by GSA on FDA land. FDA took occupancy of MOD II on October
21, 1996. MOD II has recently been added by GSA to FDA's inventory of
delegated buildings for operation and maintenance. Additional S&E
appropriated funds are required to supplement the funds provided by GSA
for the MOD II delegation. These funds will be used for the operation
and maintenance of the facility above GSA's standard level 8 hour day.
The estimated total costs associated with MOD II did not become
apparent until after the first estimates, those used for the
President's Budget Appendix and the explanatory notes, had been
printed. The new estimate of $24.2 million includes $1.4 million to
cover the costs of MOD II coming on line.
Question. The reprogramming letter indicates that a reduction in
the amount provided by the Committee for Orphan Product Grants, from
$12.2 million to $11.3 million is being taken to accommodate pay cost
increases and inflation absorbed by the agency. Why is this grant
program being reduced to cover these costs? What other program
reductions have been made from the fiscal year 1996 levels to cover
pay, inflation and other mandatory cost increases in fiscal year 1997?
Answer. FDA's budget has been at a constant level for the past
three years. In real terms, however, the Agency's resources have
declined as inflationary increases for pay and other operating costs
have been absorbed by the Agency. Because of this, FDA has had to
reduce many operating costs across most program areas. During this same
time, the Orphan Product grant program has not been reduced. In fiscal
year 1997, however, we have had to make the very difficult decision of
reducing the funding for Orphan Product grants to $11.3 million, as we
continue to absorb inflationary increases.
Question. The agency indicated that the $12,868,000 provided by the
Committee for Orphan Product Grants and extramurals is being reduced by
$905,000 for tobacco, $12.010 million for SBIR and Orphan Product
Grants, and that ``other changes'' are resulting in an increase of
$2.131 million, for a net total of $2.084 million. Why is the Orphan
Product Grants Program being shifted to Human Drugs?
Answer. Grant programs that are specifically tied to certain
program areas are generally reflected in that program area. Thus, for
the fiscal year 1998 budget request we moved the Orphan Grants program,
which is clearly a Human Drugs program, into that activity line. Thus,
the total cost of the Human Drugs program is reflected under Human
Drugs. This is consistent with the budget presentation of the
President's budget that includes the Orphan Products program under
Human Drugs. FDA would be happy to footnote separately in all future
budget presentations the amount included for the Orphan Products
program.
Question. What specific ``other changes'' are being made resulting
in an increase of $2.131 million for this line-item?
Answer. Funding for the Office of Operations and administrative
support for the Orphan Products program was moved from the Office of
the Commissioner.
Question. What remaining programs/activities are being funded by
the new proposed level of $2.084 million for this line-item?
Answer. The net $2.084 million will fund the staffs that support
the Deputy Commissioner for Operations and administration of the Orphan
Grants Program. This is slightly less than the $2.286 million provided
for these activities in fiscal year 1996.
Question. The agency has provided a table (inserted above) to the
Committee showing the changes associated with the reprogramming letter.
Please explain the specific changes being made to each of the line-
items contained in the Committee report, the dollar amount of each
increase or decrease resulting in this net change, and the reason for
each.
If not provided in answering the above question, please provide the
specific reductions and/or increases producing the net change reflected
in the ``other changes'' column for each line-item, the dollar amount,
and the impact of each change.
Answer. The numbers provided the Committee in the budget request
when compared to the fiscal year 1997 Senate Report have changed due to
a variety of factors--elimination of program management as a separate
activity line, an unusually high fiscal year 1995 actual at the NCTR,
the addition of tobacco as a separate program, changes in field
workloads which caused the shifting of funds between activity areas, a
new display for grants under the Orphan Products and Small Business
Innovative Research programs, and a new line item under Other
Activities for the costs of the Office of Operations and the
administrative support for the Orphan Products program.
The information initially provided, when the Committee
recommendations directed the changes in mid-1996, was based on fiscal
year 1995 actuals and any mid-year fiscal year 1996 estimates available
at the time. We now realize that these were not good estimates of 1996
breakouts. The differences between 1996 estimates and actuals are a
significant part of the difference between the Committee's
recommendation for fiscal year 1997 and our current resource estimates.
Generally, at the start of each fiscal year, we look at how to
manage our resources within the environment of having to absorb all
inflationary costs associated with pay raises and other operational
increases beyond our control, plus having to plan for unknown
contingencies or events that may develop during the course of the year.
We have not received funding to cover current services for the past
three years. Because FDA is a very payroll intensive agency, we must
first assure that our payroll costs will be met. As a result of
inflation absorption and the need to plan for unknown circumstances, we
reduce operating budgets through prorata agency-wide decreases--across
the centers and the offices--at the start of the year. For fiscal year
1997, we held back about $5 million, or one-half of one percent, for
these potential exigencies. Throughout the course of the year, as
events unfold, we allocate previously unallocated funds to FDA
organizations based on priorities established by top management. This
is the reason that we cannot provide a track of each and every dollar
from one activity to another. The money is held back in a reserve at
the start of the year, and is subsequently re-allocated, in many cases,
back to the same activities.
The resulting changes in the current fiscal year 1997 Appropriation
column of the fiscal year 1998 Congressional Justification reflect the
estimates at that time of the allocation of FDA resources.
In addition, the Committee's direction for a new display of our
resources provided us an opportunity to further streamline our budget
presentation. We have traditionally combined funding by program which
covered costs for the center itself, its field components, plus some
portion of overhead. The Committee's direction required the overhead to
be shown separately under the new Other Activities line. This greatly
cleaned up the structure of our request, which was an advantage to us
as well as the Committee.
FDA seeks to provide the Committee with the best information on how
the agency resources are and will be managed, consistent with
congressional direction, and we will continue working with Committee
staff to assure that our budget is understandable and consistent.
It has been difficult to adjust to the Committee's program
structure modifications, as directed in the Committee's Report on FDA's
fiscal year 1997 Appropriations. The Agency regrets any confusion that
may have been created by some of its preliminary estimates, and by the
presentation changes made in the fiscal year 1998 President's budget
and the subsequent reprogramming letter. The Agency has made several
changes in its planning and budgeting systems to better manage
according to the Committee's program structure, and we believe that
improvement is reflected in the fact that the Agency's current
estimates are not very different from the estimates included in the
explanatory notes.
Further, the Agency is planning the purchase and implementation
during fiscal year 1997 of new software that will greatly enhance our
ability to manage costs according to the Committee program structure,
and the ability to plan and project future estimates. This software
will be utilized by all components of the agency, and during the
application design phase of the project, emphasis will be given to
assuring that all agency costs will be reported and managed according
to the Committee program structure.
I would be happy to provide some additional detail for your
information, including a detailed crosswalk table that attempts to
bridge the gap from the fiscal year 1997 Senate Report language to the
fiscal year 1997 column of the fiscal year 1998 President's budget,
then to our current estimate, plus some descriptions of the reasons for
the changes, wherever possible.
[The information follows:]
[GRAPHIC] [TIFF OMITTED] T01MY01.064
Crosswalk Table Explanatory Notes:
1. Fiscal year 1997 Committee Report.--Reflects the activity lines
and dollars amounts found in the fiscal year 1997 Senate Subcommittee
Report language, based on numbers from fiscal year 1995 actuals and
mid-year fiscal year 1996 estimates.
2. Fiscal year 1996 Actual Obligations.--Reflects actual
obligations for fiscal year 1996 for comparison purposes. Note that
costs for tobacco are included under Other Activities for this column,
and that funding for the Office of Operations (and the administrative
support for the Orphan Products Grants program) are included under the
Office of the Commissioner. In several cases, these fiscal year 1996
actuals were significantly different from the fiscal year 1996
projections used by the Committee.
Columns 3 and 4 represent corrections for changes between fiscal
year 1996 mid-year estimates and fiscal year 1996 actuals, which
includes field workload adjustments, as well as some forecasting and
calculation errors we have uncovered.
3. Restore NCTR Funding to Programs.--The reduction of $5,670,000
in the amount planned for NCTR in fiscal year 1997 is an adjustment to
reflect the true continuing costs of FDA's major programs. The estimate
for NCTR furnished to the Committee in mid-1996 for inclusion in the
report was too high because it was based on funding in fiscal year 1995
that included significant one-time money.
The reason for this relates to the nature of NCTR's operating
budget, which includes a number of support service contracts. NCTR
relies on a high level of contract support for managing its facilities,
maintaining its animal colonies, and for many other research support
services. In past years, toward the end of the year, FDA has redirected
remaining funds from other programs to NCTR for its contract support.
The Agency endeavors to keep NCTR funding at a ``base'' level necessary
to maintain its current level of operations. The Agency's current
estimate for NCTR for fiscal year 1997 of $31,307,000 is in line with
NCTR's actual expenditures for fiscal year 1996 of just under
$30,774,000, and incorporates a $533,000 increase over the fiscal year
1996 funding level to cover increased contract costs.
4. Changes for fiscal year 1996 Actuals with Field Adjustments.--
This column reflects the differences between fiscal year 1996 actuals,
including changes in field workloads, and some calculation/forecasting
errors made in developing the budget display numbers used in the report
language. Each year, unanticipated events and changes in workload
affect estimates made for field activities as they relate to each
program area. We have attempted to reflect these shifts among programs.
The numbers developed for the Senate contained an inadvertent
errors regarding field costs for MQSA. Funds for field activities for
MQSA were reflected under S&E, not under user fees. For the purposes of
this table and for consistency with previous displays, we have included
the user fees with S&E, and plan to accurately reflect the split in
future tables. For PDUFA under Other Activities, the $3,500,000
reduction reflects a management decision to shift investment fund
control for information resources back to the Centers for Drugs and
Biologics.
5. Fiscal year 1997 Estimated Adjustments.--Provides an adjusted
fiscal year 1997 estimate to reflect the changes shown in columns 3 and
4. This column is calculated by adding columns (1), (3), and (4).
Column (5) serves as a more comparable starting point for cross-walking
to the fiscal year 1997 column of the fiscal year 1998 Congressional
justification.
6. Separate funding for Office of Operations (and administrative
support for the Orphan Product Grants program).--Reflects support costs
for these offices, in conjunction with individual representation of
each major office within FDA's structure.
7. Delete Program Management.--The $6,094,000 is the remaining
portion of field activity of what the agency formerly referred to as
``program management''. Since funding for all other field activities
are reflected in the appropriate program lines, we are doing the same
for Direct Field Management, thus eliminating Program Management as an
activity. Costs included under direct field management consist of a
portion of headquarters costs of the Office of Regulatory Affairs which
manages FDA Field activities. In order to depict the total program
costs (including all field costs), the $6,094,000 balance was
distributed to all of the programs proportionately except NCTR and
Other Activities, as these areas are not supported by the field.
8. Add Tobacco Line.--The new display line for Tobacco shows a
planned level of funding of $4,614,000 to be included in the fiscal
year 1997 column of the fiscal year 1998 President's budget. This
funding is derived from reductions for the various offices under
``Other Activities''.
9. Move Grants to Programs (Orphan Product Grants and Extramural
Funding).--The display in the Committee report included funding for the
Orphan Product Grants and Small Business Innovative Research (SBIR)
programs under Other Activities. Both of these programs are directly
related to specific program areas, not the indirect nature of the
funding included under Other Activities, which provides support across-
the-board to each of the program areas. Thus, these grants are shifted
back to the programs to which they relate: the drug-related activities
undertaken by the Orphan Products Grants program is now under Human
Drugs, and the device-related SBIR grants funding is now reflected in
the Medical Devices program.
10. Original fiscal year 1997 Column of fiscal year 1998 CJ.--This
column represents the fiscal year 1997 column of the fiscal year 1998
congressional justification.
11. Adjustments from fiscal year 1997 CJ to fiscal year 1997
Current Estimate.--Reflects adjustments made from the congressional
justification through our current estimates for fiscal year 1997. The
primary adjustments in this column are for increased funding for Food
Safety in support of the President's Food Safety Initiative, and for
Animal Drugs to implement the Animal Drug Availability Act. Also,
increased funds are needed for Rent and Related Services for the costs
of operating FDA's new Beltsville, MD, facility known as MODULE II.
Funding for these initiatives was provided through pro-rated, across-
the-board, operating reductions done at the beginning of the year.
The adjustments reflected under Other Activities would constitute a
reprogramming from the fiscal year 1997 Congressional Justification's
explanatory notes. We plan to submit a reprogramming letter to the
Committee very soon. In general, increases under Other Activities for
the Office of the Commissioner and the Office of Policy will be offset
by reductions in the Office of Management and Systems and Central
Services, accommodated through continued streamlining of contract and
other support costs, and by cost reductions paid to the DHHS Program
Support Center and other central costs. Overall, the Other Activities
line in our fiscal year 1997 current estimate column is slightly less
than the amount included in the fiscal year 1998 Congressional
Justification.
12. Fiscal year 1997 Current Estimate.--Reflects FDA's current
estimate for costs, by each activity line, for fiscal year 1997.
Question. For each program area, please break down the fiscal year
1997 and 1998 proposed levels reflected in the budget request by Center
and related field activity.
Answer. I would be happy to provide a table showing the splits
between the centers and field. These dollars reflect fiscal years 1997
and 1998 program areas as they appear in the Congressional
Justification.
[The information follows:]
FDA S&E DIRECT APPROPRIATION
[Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
Fiscal year 1998--
Current --------------------------------------------
Activity fiscal Req'd Req'd
year 1997 Freeze tobacco food Total
estimate increase increase
----------------------------------------------------------------------------------------------------------------
Centers and related field activities
Foods.................................................. $202,639 $201,766 ......... $20,000 $221,766
Center for Food Safety and Applied Nutrition
(CFSAN)........................................... 83,164 82,514 ......... 12,000 94,514
Field activities................................... 119,475 119,252 ......... 8,000 127,252
========================================================
Human drugs............................................ 199,740 198,734 ......... ......... 198,734
Center for Drug Evaluation and Research (CDER) \1\. 142,186 141,487 ......... ......... 141,487
Field activities................................... 57,554 57,247 ......... ......... 57,247
========================================================
Biologics.............................................. 88,295 87,513 ......... ......... 87,513
Center for Biologics Evaluation and Research
(CBER)............................................ 75,061 74,267 ......... ......... 74,267
Field activities................................... 13,234 13,246 ......... ......... 13,246
========================================================
Animal drugs........................................... 40,704 40,029 ......... 4,000 44,029
Center for Veterinary Medicine (CVM)............... 26,814 26,613 ......... 4,000 30,613
Field activities................................... 13,890 13,416 ......... ......... 13,416
========================================================
Medical and radiological devices....................... 143,655 143,222 ......... ......... 143,222
Center for Devices and Radiological Health (CDRH).. 110,495 110,172 ......... ......... 110,172
Field activities................................... 33,160 33,050 ......... ......... 33,050
========================================================
National Center for Toxicological Research (NCTR)...... 31,307 31,307 ......... ......... 31,307
========================================================
Other activities
Office of the Commissioner (OC)........................ 12,394 12,799 ......... ......... 12,799
Tobacco................................................ 4,914 4,914 $29,086 ......... 34,000
Office of Policy (OP).................................. 2,705 2,848 ......... ......... 2,848
Office of External Affairs (OEA)....................... 14,659 15,079 ......... ......... 15,079
Office of Operations (OO).............................. 3,566 3,687 ......... ......... 3,687
Office of Orphan Products Development (OPD)........ (1,832) (1,887) ......... ......... .........
Office of Science.................................. (675) (696) ......... ......... .........
Office of Management and Systems (OMS)................. 42,944 44,089 ......... ......... 44,089
FDA Central............................................ 8,250 8,100 ......... ......... 8,100
Rent and related activities............................ 24,200 25,885 ......... ......... 25,885
========================================================
Total, S&E budget authority...................... 819,972 819,972 29,086 24,000 873,058
----------------------------------------------------------------------------------------------------------------
\1\ Amount included for orphan product grants (CDER): Current fiscal year 1997 estimate, $11,345,000; fiscal
year 1998 freeze, $11,345,000.
Question. What has FDA done to manage its budget within the amounts
for each activity reflected in the Senate Committee report accompanying
the fiscal year 1997 appropriations bill, and approved by the
conference committee?
Answer. Except for the items noted in the reprogramming letter
dated April 10, 1997, we have attempted to manage within the amounts
for each activity reflected in the fiscal year 1997 Senate Committee
report. Generally, at the start of each fiscal year, we look at how to
manage our resources within the environment of having to absorb all
inflationary costs associated with pay raises and other operational
increases beyond our control, plus having to plan for unknown
contingencies or events that may develop during the course of the year.
We have not received funding to cover current services for the past
three years. Because FDA is a very payroll intensive agency, we must
first assure that our payroll costs will be met. As a result of
inflation absorption and the need to plan for unknown circumstances, we
reduce operating budgets through prorata agency-wide decreases--across
the centers and the offices--at the start of the year. For fiscal year
1997, we held back about $5 million, or one-half of one percent, for
these potential exigencies. Throughout the course of the year, as
events unfold, we allocate previously unallocated funds to FDA
organizations based on priorities established by top management. This
is the reason that we cannot provide a track of each and every dollar
from one activity to another. The money is held back in a reserve at
the start of the year, and is subsequently re-allocated, in many cases,
back to the same activities.
The Committee's direction for a new display of our resources
provided us an opportunity to further streamline our budget
presentation. We have traditionally combined funding by program which
covered costs for the center itself, its field components, plus some
portion of overhead. The Committee's direction required the overhead to
be shown separately under the new Other Activities line. This greatly
clarified the structure of our request, which was an advantage to us as
well as the Committee.
It has been difficult to adjust to the Committee's program
structure modifications, as directed in the Committee's Report on FDA's
fiscal year 1997 Appropriations. The Agency regrets any confusion that
may have been created by some of its preliminary estimates, and by the
presentation changes made in the fiscal year 1998 President's budget
and the subsequent reprogramming letter. The Agency has made several
changes in its planning and budgeting systems to better manage
according to the Committee's program structure, and we believe that
improvement is reflected in the fact that the Agency's current
estimates are not very different from the estimates included in the
explanatory notes.
Further, the Agency is planning the purchase and implementation
during fiscal year 1997 of new software that will greatly enhance our
ability to manage costs according to the Committee program structure,
and the ability to plan and project future estimates. This software
will be utilized by all components of the agency, and during the
application design phase of the project, emphasis will be given to
assuring that all agency costs will be reported and managed according
to the Committee program structure.
FDA seeks to provide the Committee with the best information on how
the agency resources are and will be managed, consistent with
congressional direction, and we will continue working with Committee
staff to assure that our budget is understandable and consistent.
generic drug approvals
Question. In the Conference Report that accompanied H.R. 3603
(Report 104-726), the Appropriations Committees directed FDA to ``use
available funds to ensure compliance with its 180 day statutory review
period for generic drug applications.'' What steps has FDA taken to
respond to this request? Please list the dates on which any remedial
action was taken.
Answer. FDA has taken a number of actions to enhance compliance
with its 180 day statutory review period for generic drug applications.
These actions have been taken to improve efficiencies in the
application review process. At the end of fiscal year 1996, there was a
backlog of 46 overdue applications, meaning abbreviated new drug
applications, or ANDA's, pending greater than 180 days. In addition, 71
chemistry supplements were overdue. As a reference, at the end of
fiscal year 1995, there were 58 ANDA's and 104 supplemental
applications overdue. Thus, FDA has substantially reduced the backlog
of overdue applications and supplements.
FDA has implemented new faxing and teleconference procedures, and
has begun faxing the review/comments/deficiencies to applicants during
this fiscal year. Additionally, for most ``minor'' issues, applicants
will be able to submit responses via facsimile. If the fax response is
received from an applicant within 30 days, the reviewer will then
complete review of the application. If it is not received within 30
days, then this would be classified as a minor amendment. Currently,
responses to minor amendments are placed in a queue and reviewed within
60 days.
In fiscal year 1996, FDA also implemented a procedure for public
release of bioequivalence protocols and protocol reviews. It is
anticipated that by providing public access to this information, there
will be fewer protocols submitted for review, thus decreasing the
Division's protocol workload and allowing more time to be spent on
application reviews. By releasing the first protocol for a drug, FDA no
longer has to review duplicative protocols thereby freeing up more
resources to conduct timely reviews.
Also, FDA initiated a procedure to contact applicants that undergo
two or more major deficiency cycles during the review process.
Applicants are requested to contact FDA for discussion or clarification
regarding the deficiencies. If FDA is not contacted, the Office will
call the applicant within 30 days to see if any further discussion, or
perhaps a meeting, is necessary. It is hoped that this interaction will
prevent additional major deficiency cycles and shorten total time to
approval.
In 1996, FDA's Office of Generic Drugs, or OGD, hired a medical
officer to improve timeliness of reviews of ANDA's with bioequivalence
studies with clinical endpoints. In the past, these complicated studies
were referred to the Office of Review Management for review, and then
returned to the OGD for final processing after completion of the
scientific review.
The Office of Generic Drugs has implemented its program for
electronic submission of bioequivalence data. The program was developed
under contract with the University of Maryland. Under the program,
applicants that choose to may prepare electronic submissions on
diskette with the aid of a user-friendly program call Entry and
Validation Program. The program is expected to have a very positive
impact on the efficiency of reviews, ultimately reducing review times.
Question. In your opinion, why is FDA exceeding the statutory
requirement that Abbreviated New Drug Application (ANDA) be reviewed in
180 days?
Answer. Staffing reductions coupled with an increased number of
submissions of original applications have had a significant detrimental
impact on review times.
Question. Since 1990, what have been the mean and median review
times for New Drug Applications, ANDA's and ANDA supplements?
Answer. I will be happy to provide this information for the record.
[The information follows:]
----------------------------------------------------------------------------------------------------------------
NDA's ANDA's ANDA supplements
Fiscal year -----------------------------------------------------------------
Mean Median Mean Median Mean Median
----------------------------------------------------------------------------------------------------------------
1990.......................................... 31.7 23.8 25.0 23.0 N/A N/A
1991.......................................... 29.2 24.2 36.3 32.7 N/A N/A
1992.......................................... 30.0 24.2 35.4 34.5 N/A N/A
1993.......................................... 34.3 26.8 40.4 39.7 N/A N/A
1994.......................................... 27.3 20.8 29.4 24.4 N/A N/A
1995.......................................... 25.7 18.7 35.3 28.2 N/A N/A
1996.......................................... 19.6 15.0 33.2 24.7 N/A N/A
----------------------------------------------------------------------------------------------------------------
Question. List the ANDA's that are currently being delayed because
of an outstanding scientific or regulatory bioequivalence issue, and
provide the mean time the application has been pending before FDA.
Answer. FDA is not permitted to specifically discuss pending
applications. However, the types of drug products that may take longer
to approve are nonsystemically absorbed drug products that require more
extensive bioequivalence testing and others that raise especially
complex scientific issues.
Question. Since 1990, what has been the mean and median review
cycle in months for ANDA's and ANDA supplements?
Answer. I will be happy to provide this information for the record.
[The information follows:]
REVIEW CYCLE TIMES (MONTHS) FOR ANDA'S AND AADA'S \1\ \2\ \3\
----------------------------------------------------------------------------------------------------------------
Originals Supplement median \4\
-------------------------- \5\
Year -------------------------
Mean Median Major Minor
----------------------------------------------------------------------------------------------------------------
OCT 89...................................................... 6.7 6.7 6.2 ...........
NOV 89...................................................... 7.5 7.6 6.4 ...........
DEC 89...................................................... 8.6 8.1 6.6 ...........
JAN 90...................................................... 8.9 8.4 6.1 ...........
FEB 90...................................................... 9.2 8.9 7.8 ...........
MAR 90...................................................... 9.0 8.9 8.0 ...........
APR 90...................................................... 9.9 9.4 8.1 ...........
MAY 90...................................................... 10.1 9.9 8.8 ...........
JUNE 90..................................................... 10.2 11.1 9.3 ...........
JUL 90...................................................... 12.6 11.5 10.4 ...........
AUG 90...................................................... 11.9 12.4 11.1 ...........
SEP 90...................................................... 13.9 13.7 12.4 ...........
OCT 90...................................................... 12.2 11.8 12.8 ...........
NOV 90...................................................... 15.6 13.8 13.3 ...........
DEC 90...................................................... 14.9 14.6 12.3 ...........
JAN 91...................................................... 13.0 12.9 11.4 ...........
FEB 91...................................................... 12.6 13.5 14.4 ...........
MAR 91...................................................... 12.6 13.2 12.1 ...........
APR 91...................................................... 14.6 13.3 12.9 ...........
MAY 91...................................................... 13.9 12.4 9.3 ...........
JUN 91...................................................... 12.7 12.7 12.3 ...........
JULY 91..................................................... 12.0 12.0 11.1 0.7
AUG 91...................................................... 11.8 10.9 13.0 0.8
SEP 91...................................................... 12.2 9.3 12.2 1.5
OCT 91...................................................... 12.5 9.6 10.7 2.1
NOV 91...................................................... 9.7 7.9 13.1 1.2
DEC 91...................................................... 12.0 9.1 14.7 1.7
JAN 92...................................................... 10.9 8.5 11.1 1.2
FEB 92...................................................... 11.3 9.1 9.9 1.2
MAR 92...................................................... 9.3 7.1 12.3 1.3
APR 92...................................................... 8.7 7.2 9.9 1.3
MAY 92...................................................... 7.8 5.4 11.1 1.8
JUN 92...................................................... 7.8 5.8 6.2 1.5
JUL 92...................................................... 6.6 4.6 6.6 1.1
AUG 92...................................................... 5.8 3.8 5.7 1.4
SEP 92...................................................... 6.8 4.7 5.9 1.5
OCT 92...................................................... 5.2 4.4 5.5 1.3
NOV 92...................................................... 4.3 4.2 5.1 1.5
DEC 92...................................................... 5.1 4.8 5.2 1.4
JAN 93...................................................... 6.1 4.9 4.9 1.6
FEB 93...................................................... 6.0 5.4 5.9 1.2
MAR 93...................................................... 5.0 4.7 4.8 1.5
APR 93...................................................... 5.3 4.9 5.2 1.5
MAY 93...................................................... 4.8 4.7 4.4 1.4
JUN 93...................................................... 4.9 4.9 5.1 1.8
JULY 93..................................................... 5.3 4.9 4.9 2.0
AUG 93...................................................... 5.5 5.0 4.1 1.2
SEP 93...................................................... 7.3 5.2 4.7 1.4
OCT 93...................................................... 5.2 5.2 4.7 2.0
NOV 93...................................................... 7.1 5.3 4.5 1.6
DEC 93...................................................... 5.5 5.1 4.2 1.4
JAN 94...................................................... 5.6 5.1 4.7 2.0
FEB 94...................................................... 7.0 6.0 6.2 2.5
MAR 94...................................................... 5.2 4.9 5.4 1.4
APR 94...................................................... 5.9 5.6 5.2 1.4
MAY 94...................................................... 4.9 4.8 3.7 0.9
JUN 94...................................................... 6.4 4.9 4.4 1.2
JULY 94..................................................... 4.5 4.3 4.0 1.1
AUG 94...................................................... 5.3 4.8 4.3 1.8
SEP 94...................................................... 4.5 3.8 3.9 0.9
OCT 94...................................................... 5.2 4.5 4.1 1.5
NOV 94...................................................... 4.9 4.7 3.8 1.8
DEC 94...................................................... 5.6 4.8 4.3 1.2
JAN 95...................................................... 5.4 5.4 4.8 2.0
FEB 95...................................................... 5.1 4.9 4.8 1.2
MAR 95...................................................... 4.9 5.0 4.3 1.1
APR 95...................................................... 5.6 5.0 5.8 1.3
MAY 95...................................................... 5.5 5.4 4.8 1.4
JUN 95...................................................... 5.2 5.1 4.6 1.6
JULY 95..................................................... 5.6 5.4 4.4 0.9
AUG 95...................................................... 5.1 5.4 4.6 1.8
SEP 95...................................................... 5.6 5.8 4.6 1.2
OCT 95...................................................... 5.9 5.7 5.7 1.6
NOV 95...................................................... 6.5 6.6 5.6 2.2
DEC 95...................................................... 6.4 6.3 4.9 1.0
JAN 96...................................................... 6.5 6.4 5.6 2.0
FEB 96...................................................... 6.6 6.7 6.5 1.6
MAR 96...................................................... 7.0 6.9 5.2 1.2
APR 96...................................................... 6.3 6.4 4.9 1.6
MAY 96...................................................... 6.3 6.1 5.2 1.4
JUN 96...................................................... 5.5 5.1 4.2 1.5
JULY 96..................................................... 5.8 6.0 5.1 1.6
AUG 96...................................................... 5.1 5.1 4.7 1.5
SEP 96...................................................... 5.1 5.2 4.4 2.3
OCT 96...................................................... 5.4 5.5 5.3 1.2
NOV 96...................................................... 5.7 6.1 5.0 1.6
DEC 96...................................................... 5.7 5.9 4.9 1.6
JAN 97...................................................... 5.9 5.7 5.1 1.8
FEB 97...................................................... 5.6 5.1 4.8 1.2
----------------------------------------------------------------------------------------------------------------
\1\ Amendments for both originals and supplements are counted under the review cycle times.
\2\ Times correspond to actual applications received. The new ANDA/AADA submission policy that went into effect
1/1/91 allows certain variations in a drug product to be included in a single application.
\3\ In September 1991, the OGD started implementation of the Application Integrity Policy by suspending review
of applications suspected of being tainted by fraud. AIP time has been subtracted from review time above for
the period after 9/91. However, before the AIP went into effect, the review of many applications suspected of
containing fraudulent data were suspended. These suspensions were not recorded in the MIS and are not
reflected in the above chart.
\4\ Mean supplement review cycle times are not captured by the Office of Generic Drugs.
\5\ Median supplement review times are broken out by major and minor reviews (starting in July 1992). An
amendment to a supplement may be classified as minor when an experienced review chemist can reasonably be
expected to take less than one hour to complete the review. Major amendments are all other reviews of
amendments to supplements.
Question. Since 1990, what have been the mean and median review
times for consults sent from the Office of Generic Drugs (OGD) to the
New Drug Division?
Answer. The Office of Generic Drugs--OGD--does not calculate the
mean and median review times for consults sent to the Office of Review
Management--ORM. However, it can be safely stated that many consults
take months to well over a year to be returned to OGD. Upon return of
the consults, OGD must still review ORM's comments and prepare a
deficiency letter, if applicable, for the applicant. In the fall of
1996, OGD hired a medical officer to improve the timeliness of reviews
of abbreviated new drug applications that include bioequivalence
studies with clinical endpoints.
Question. How many ANDA's and ANDA supplements has FDA received
each year since 1990?
Answer. I will be happy to provide this information for the record.
[The information follows:]
------------------------------------------------------------------------
ANDA
Fiscal year ANDA/AADA supplements
received received
------------------------------------------------------------------------
1990.................................... 352 3,946
1991.................................... 300 2,632
1992.................................... 339 3,117
1993.................................... 308 3,506
1994.................................... 332 2,528
1995.................................... 404 2,694
1996.................................... 378 2,521
------------------------------------------------------------------------
Question. How many ANDA's and ANDA supplements has FDA approved
each year since 1990?
Answer. I will be happy to provide this information for the record.
[The information follows:]
------------------------------------------------------------------------
ANDA
Fiscal year ANDA/AADA supplements
approved approved
------------------------------------------------------------------------
1990.................................... 73 2,489
1991.................................... \1\ 141 3,413
1992.................................... 239 3,470
1993.................................... 215 2,635
1994.................................... 255 2,486
1995.................................... 288 2,466
1996.................................... 340 2,730
------------------------------------------------------------------------
\1\ In 1991, there were 141 approvals and 4 tentative approvals. The
tentative approvals were counted previously and should not have been
included in the count.
Question. Since 1990, what have been the annual FTE ceilings at OGD
and the number of personnel on board? Please break out these figures by
category, e.g., chemistry reviewers, bioequivalence reviewers, etc.
Answer. I will be happy to provide this information for the record.
[The information follows:]
OFFICE OF GENERIC DRUGS
----------------------------------------------------------------------------------------------------------------
Program Chemistry Bioequivalence Labeling FTE
Fiscal year FTE \1\ reviewers reviewers reviewers On board ceiling
----------------------------------------------------------------------------------------------------------------
1990..................................... 41 33 28 7 109 121
1991..................................... 56 42 28 8 134 132
1992..................................... 57 53 30 10 150 150
1993..................................... 62 51 28 8 149 155
1994..................................... 60 50 26 9 145 155
1995..................................... 59 50 26 8 143 144
1996..................................... 35 48 25 10 118 \2\ 125
----------------------------------------------------------------------------------------------------------------
\1\ Program FTE include laboratory and management staff, part-time employees, summer students and non-reviewing
supervisors and scientists.
\2\ The reduction in OGD's FTE ceiling from 155 to 125 includes two components. Approximately 16 FTE do not
represent true reductions in the core review functions of the office, as these positions were transferred to
the Office of Testing and Research (OTR) and the immediate staff of the Office of Pharmaceutical Science.
These transfers were part of an overall reorganization of the Center, intended to make the best possible use
of limited resources. The FTE transferred to OTR are still devoted to product quality research and performing
the same product quality testing function as when they were part of OGD. The additional cut of 14 FTE that
existed in the OGD in 1994 represent one of many examples of the agency's efforts to comply with directives to
reduce the number of federal employees.
Question. Since 1990, what have been the annual salary outlays for
program FTE's, primary reviewers, and total program outlays for OGD?
Answer. I will be happy to provide the average salaries for program
FTE and primary reviewers for OGD.
[The information follows:]
OFFICE OF GENERIC DRUGS
----------------------------------------------------------------------------------------------------------------
Total est.
Primary costs \1\
Fiscal year Program FTE reviewers (salary/
outlays)
----------------------------------------------------------------------------------------------------------------
1990............................................................ $2,006,879 $3,286,598 $5,293,477
1991............................................................ 3,394,704 4,595,226 7,989,930
1992............................................................ 3,638,505 5,908,980 9,547,485
1993............................................................ 4,090,543 5,688,643 9,779,186
1994............................................................ 4,151,055 5,867,594 10,018,649
1995............................................................ 4,187,318 5,953,800 10,141,118
1996............................................................ 2,609,843 6,195,479 8,805,322
----------------------------------------------------------------------------------------------------------------
\1\ Based on average salary data.
Question. FDA has a number of responsibilities that the Food, Drug,
and Cosmetic Act requires be completed within a specific time frame,
including the obligation to review ANDA's within 180 days. Other FDA
duties may be important; however, they are not mandated by a statutory
schedule.
Administrative support office activities are less likely to be
subject to a statutory schedule. There are a number of administrative
offices at FDA including the Office of the Commissioner, the Office of
Policy, the Office of External Affairs, and the Office of Management
and Systems. The fiscal year 1997 Program Level Appropriation for these
offices was $85.41 million and 954 FTE.
FDA has estimated that an additional $13 million in annual funding
above the fiscal year 1997 funding level would enable OGD to approve 90
percent of ANDA's within 180 days. These funds would permit the
addition of 92 FTE in OGD and related offices.
Why couldn't FDA fully fund an effective ANDA review program by
retaining the present level of funding in OGD and transferring
approximately 15 percent of the resources from the above listed
administrative offices, or $13 million, to OGD?
Answer. The $18 million in user fees requested for generic drugs in
FDA's fiscal year 1998 budget request is necessary to maintain the
current resource level in the generic drug program. This $18 million in
user fees does not reflect an increase in funding in this area, and
should not be construed to be program enhancement funds. If the user
fees requested in this and other critical program areas are not
approved, and the existing base resources are not restored, the cuts
will be felt across each program area of FDA. At this point in time, I
cannot say with any degree of certainty where specific cuts would be
taken, but given the magnitude of the potential reduction, I can safely
say that review times and backlogs for all FDA-related products would
increase substantially. FDA's ability to fulfill its mission of
protecting and promoting the health of the American public would be
seriously undermined. Decreasing the funding available for
administrative functions would be expected to reduce the agency's
operating efficiency, which would adversely affect a variety of
programs, including ANDA review.
Question. Describe in detail any additional funds you believe would
be necessary to review 90 percent of ANDA's in 180 days. Please list
the additional FTE's that you would add, break out these FTE's by
category, and list where they would be assigned in the agency.
Answer. The budget provides a reasonable level of resources for
FDA. As we continue to make productivity enhancements, we can review a
greater percentage within 180 days. In an attempt to identify an answer
to your specific question, in a preliminary survey, FDA estimates that
approximately $12.8 million and 85 FTE per year could be used to
further enhance the current drug evaluation activities such as the
review of original ANDA's/AADA's and chemistry supplements within 180
days, the reduction of overall approval times through a reduction in
review cycles.
This $12.8 million can be further broken down: Initial, one-time
start-up costs of furniture, computer and other equipment, and
recruitment would be about $2.1 million, or $530,300 per year spread
over four years. The annual increase in the operating costs of the
generic drugs program, including research, operations, and
infrastructure, would be about $4.1 million. Thus, the total annual
costs to be covered by generic user fees, including the start-up costs
for the first four years of $530,300, the annual increase in operating
costs of $4.1 million, and increased salaries of $8.2 million would be
approximately $12.8 million.
The increase of 85 FTE would be distributed as follows: OGD (70),
other CDER offices (7), and the Agency (8).
Question. The International Committee on Harmonization (ICH), which
includes the U.S., European Union countries, and Japan, has been
meeting to seek agreement on standards for clinical trials and other
related issues. Please provide the employee title and days on travel
for FDA employees who have attended ICH conferences since 1990. In
addition, provide a dollar figure for out-of-pocket expenses and salary
costs attributable to ICH since 1990.
Answer. The International Conference on Harmonization of Technical
Requirements for the Registration of Pharmaceuticals for Human Use,
ICH, is a unique project that brings together the regulatory
authorities of the European Union, Japan and the United States and
experts from the pharmaceutical industry in the three regions to
discuss scientific and technical aspects of new product registration.
Since commencing work in 1990, ICH has made recommendations and
developed guidelines with the purpose of achieving greater
harmonization in the requirements for registration of new medicines, in
order to reduce or obviate the need to duplicate the testing carried
out during the research and development and ensure a more economical
use of material, animal and human resources. An overall objective is
the elimination of unnecessary delay in the global development and
availability of new medicines while maintaining safeguards on quality,
safety and efficacy, and regulatory obligations to protect public
health.
Harmonization under ICH involves the European Union, Japan and the
United States, with the assistance of observers from WHO, EFTA and
Canada. The six co-sponsors of ICH are: the European Union, the U.S.
Food and Drug Administration, the Japanese Ministry of Health and
Welfare, together with the pharmaceutical industry, represented by the
European Federation of Pharmaceutical Industries' Associations, the
Japan Pharmaceutical Manufacturers Association, and the Pharmaceutical
Research and Manufacturers of America. In addition, the International
Federation of Pharmaceutical Manufacturers Associations participates as
an `umbrella' organization for the pharmaceutical industry, and
provides the ICH Secretariat.
The Steering Committee appoints joint industry/regulatory Expert
Working Groups to deliberate on technical aspects of harmonization.
Topics were originally selected under three main subject areas,
``Quality'', ``Safety'', and Efficacy'', but in 1994, the scope was
extended into multi-disciplinary topics concerned with ``Regulatory
Communications.'' ICH has developed more than 40 technical guidelines,
and virtually all of these will be finalized by July 1997. These
guidelines on technical requirements for drug submissions are intended
to form the basis for allowing a single application to be submitted in
each of the three regions. ICH is studying a topic proposed for the
future intended to harmonize the content and format of drug submissions
in the three regions. This would allow the goal of a single ``global
dossier'' or ``common technical document'' to be realized. The work of
ICH is coordinated and reviewed at large conferences held in two year
intervals. The first large conference, ICH 1, was held in 1991 in
Brussels, Belgium. The second conference, ICH 2, was held in 1993 in
Orlando, Florida, and the third conference, ICH 3, was held in 1995 in
Yokohama, Japan. The next large conference is scheduled for July 1997
in Brussels.
There are many ICH activities which support the development of the
ICH guidelines, including meetings of the technical expert working
groups and the ICH Steering Committee. I would be happy to provide a
list of the attendees and the dates of the ICH conferences, along with
the data related to the travel and salary and benefits costs directly
related to these conferences, for the record.
[The information follows:]
ICH 1--Brussels, Belgium--November 5--7, 1991
Travel Costs: $17,340
Salary and Benefits Costs: $10,883
FDA Attendee Titles:
Associate Director for Research and Regulatory Coordination, CBER
Supervisory Chemist, Division of Neuropharmacological Drug
Products, CDER
Assistant Director (Chemistry), Office of Drug Evaluation I, CDER
Assistant Director, Pharmacology/Toxicology, CBER
Deputy Director, Medical Affairs, CDER
Director, Office of Drug Evaluation II, CDER
Acting Deputy Director, CBER
Director, Office of Drug Evaluation I, CDER
Director, Division Of Scientific Investigations, Office of
Compliance, CDER
Director, CDER
Director, Office of International Affairs, Office of the
Commissioner, FDA
ICH 2--Orlando, FL--October 27-29, 1993
Travel Costs: $55,205
Salary and Benefits Costs: $48,879
FDA Attendee Titles:
Director, Office of Drug Evaluation II, CDER
Supervisory Chemist, Office of Drug Evaluation I, CDER
Assistant Director, Pharmacology/Toxicity, CBER
Director, Office of Generic Drugs, CDER
Acting Deputy Director, Office of Research Resources, CDER
Supervisory Pharmacologist, Office of Oncology and Pulmonary Drug
Products, CDER
Associate Director for Medical and International Affairs, CBER
Associate Director (Chemistry), Office of Drug Evaluation I, CDER
Director, Division of Anti-Infective Drug Products, CDER
Director, CDER
Associate Director for Research, CBER
ICH Coordinator, FDA
Supervisory Pharmacologist, Office of Drug Evaluation I, CDER
Director, Office of Drug Evaluation I, CDER
Special Assistant to the Director for International Harmonization,
CDER
Associate Director for Chemistry, CDER
Supervisor, FDA
Director, Division of New Drug Chemistry I, CDER
Supervisory Research Biologist, FDA
Supervisory Consumer Safety Officer, FDA
Director, Office of International Affairs, FDA
Deputy Center Director, CBER
Chemist, CDER
Supervisory Chemist, FDA
Administrative Technician, FDA
Representative, FDA
Deputy Director, Office of New Drug Chemistry, CDER
Deputy Associate Commissioner for Health Affairs, FDA
Chemist, CDER
Consumer Affairs Specialist, FDA
Public Affairs Specialist, FDA
Analyst, Office of Policy, Office of the Commissioner, FDA
Director, Division Of Scientific Investigations, Office of
Compliance, CDER
Medical Officer, FDA
Deputy Director, Division of Scientific Investigations, CDER
Associate Commissioner for Health Affairs, FDA
Director, Division of Biometrics, CDER
Chemist, FDA
Staff Specialist, FDA
Supervisory Chemist, FDA
Chemist, FDA
Toxicologist, Division of Toxicology and Environmental Sciences,
CVM
Supervisory Medical, FDA
Senior Regulatory, FDA
Special Assistant to the Director, Center for Veterinary Medicine
Chemist, FDA
Special Assistant to the Director, CDER
Assistant to the ICH Coordinator
Consultant, FDA
Visiting Scientist, FDA
Supervisory Chemist, FDA
Director, Office of Therapeutics Research and Review, CDER
ICH 3--Yokohama, Japan--November 27-December 1, 1995
Travel Costs: $218,447
Salary and Benefits Costs: $67,461
FDA Attendee Titles:
Associate Director, Science and Medical Affairs, CDER
Associate Director for Medical and International Affairs, CBER
ICH Coordinator, FDA
Director, Division of Biometrics, CDER
Director, Office of Drug Evaluation I, CDER
Medical Officer, Division of Scientific Investigations, CDER
Supervisory Medical Officer, Div. of Metabolism and Endocrine Drug
Products, CDER
Program Manager, Standardized Nomenclature Program, Office of
Management Systems
Assistant Director for Pharmacology/Toxicity, CBER
Toxicologist, Division of Toxicology and Environmental Sciences,
CVM
Director of Strategic Systems Planning Group, Office of the
Commissioner
Medical Officer, Division of Clinical Trial Design and Analysis,
CBER
Supervisory Pharmacologist, Div. of Oncology and Pulmonary Drug
Products, CDER
Supervisory Chemist, Div. Of Medical and Surgical and Dental Drug
Products, CDER
Division of Biostatistics and Epidemiology, CBER
Director, Division of Antiviral Drug Products, ODE II, CDER
Deputy Director, Division of Scientific Investigations, CDER
Deputy Commissioner for External Affairs, FDA
Special Assistant to the Deputy Director of Pharmaceutical Science,
CDER
Supervisory Consumer Safety Officer, FDA
Director, Center for Biologics Evaluation and Research
Associate Director for Policy, CDER
Consumer Safety Officer, FDA
Director, Division of Clinical Trial Design and Analysis, CBER
Nurse Clinician, CDER
Associate Director for Research, CBER
Review Chemist, Division of Chemistry II, Office of Generic Drugs,
CDER
Microbiologist, CBER
Director, Division of New Drug Chemistry I, CDER
Supervisory Chemist, FDA
Associate Director for Pharmacology and Toxicology, CDER
Supervisory Research Biologist, FDA
Contractor, FDA
Director, Division of Reproductive and Urologic Drug Products, CDER
Expert in Telecommunications and Electronic Data Transmission, OC
Question. The Transatlantic Business Dialogue (TABD) is a group of
U.S. companies that advocate a wide variety of positions on
international trade issues. The generic pharmaceutical industry is not
represented in the TABD.
The TABD recommends overturning the Bolar provisions of the 1984
Drug Price Competition and Patent Term Restoration Act (popularly known
as the Hatch Waxman Act), which are critical to the availability of
generic pharmaceutical products in the United States.
How many FDA dollars and days in travel have been spent by FDA
employees to attend TABD conferences since 1990?
Answer. TABD is composed of both U.S. and European industry
representatives. The issues, agendas, participation, and pronouncements
of the TABD are all controlled by and represented to be the products of
the industry participants in the TABD. FDA has had no interaction with
the Transatlantic Business Dialogue, TABD, regarding their position on
the Bolar Amendment. FDA representatives have attended TABD meetings to
explain the Agency's position regarding the U.S.-EU negotiations toward
Mutual Recognition Agreements in the pharmaceutical and medical device
sectors.
In 1995 FDA expended 12 staff days, including the Veterans Day
weekend, to send three people to Seville, Spain, at a cost of $7,400.
In 1996, the expenditure was 16 staff days, with one person attending a
mid-year meeting in Brussels, Belgium, at a cost of $2,100, and three
people representing FDA at the TABD conference in Chicago, at a cost of
$1,400. So far in 1997, four staff days and $2,100 have been expended
for an FDA representative to attend a TABD Biotechnology Working Group
in Brussels.
eximer lasers
Question. On October 10, 1996, the FDA announced an amnesty policy
that allows users of illegal eximer lasers (used in eye surgery), which
are classified as Class III significant risk devices, to come into
compliance with FDA regulations governing the use of those medical
devices. Users or manufacturers of these lasers were given until
January 15, 1997, to submit an Investigational Device Exemption (IDE)
application to the FDA, or to submit a certification (for reimported
lasers) that the laser is identical in all relevant aspects to approved
lasers. To date, how many IDE applications has the Agency received?
Answer. The Agency has received 15 IDE applications from owners of
unapproved excimer lasers for refractive surgery.
Question. How many IDE applications have been approved?
Answer. The agency has conditionally approved eight IDE
applications for refractive surgery. The conditions for approval
include limiting the number of patients as well as the refractive
indications. Six of the IDE applications were disapproved and one is
currently under review.
Question. What options are available to physicians or manufacturers
who submit an IDE that is not adequate according to FDA regulations?
Answer. The physician or manufacturer cannot use their laser until
they have received approval for their IDE. Submitters of an IDE that is
disapproved have several options. The applicant can respond to the
deficiencies cited in the disapproval letter and resubmit their
application. In the applicant's deficiency letter a contact person is
named for any questions the applicant may have in responding to the
deficiencies. The Office of Device Evaluation also has an interactive
review process in place for IDE submitters and urges frequent
communication with the regulated industry during the review process in
order to clarify ambiguities or remedy deficient information prior to
completing the review.
In addition, it is our understanding from the industry that an
applicant can trade-in their unapproved device for a legally marketed
VISX, Inc. or SUMMIT Technology, Inc. device.
Question. How many certifications has the Agency received? How many
of these certifications has the Agency accepted?
Answer. The Agency has received 13 certifications for reimported
lasers. Of these, two certifications for reimported lasers manufactured
by Summit Technology Inc. were accepted as complete. A small number of
certifications are under consideration.
Question. For certifications not accepted, what course of action
must the applicant take?
Answer. Certifications were deemed to be inadequate if the
certification did not demonstrate that the laser was an approved laser.
Thus, the owner of such an unapproved laser may only use the laser if
the device has in effect an approved IDE or an approved PMA. Applicants
whose certification was not accepted have the option of submitting IDE
applications for clinical trials for their devices to obtain clinical
data on the safety and effectiveness of the devices. In addition, the
applicant may seek approval of the PMA, if the applicant has all of the
necessary data and information.
Question. Has a limit been placed on the number of eyes that can be
treated under each IDE application?
Answer. Yes, there is a limit on the number of eyes that can be
treated under an IDE application. All IDE studies, including any IDE
studies approved for excimer lasers, have a limited number of subjects
and sites based on the scientific hypotheses being studied by the
applicant and on statistical considerations. The typical study design
for this device has between 300-400 subjects per type of visual
correction or indication being studied.
The October 10, 1996, letter announcing the FDA's amnesty and IDE
policy, indicates that: ``The grace period does not apply to
individuals who have received Warning Letters or other regulatory
communications from the FDA or who are importers of lasers currently
under detention.''
Question. How many warning letters or other regulatory
communications were sent to manufacturers or physicians who are using
unapproved (black box) lasers? How many were sent to importers of
lasers currently under detention?
Answer. FDA has issued four Warning Letters, or WL's, and four
untitled letters, or UTL's, to black box users; and two WL's to
manufacturers of black box lasers. Additionally, the Agency has issued
5 WL's as well as 1 UTL to users of gray market lasers.
Question. It has been over five months since the Agency sent the
October letter. What action has the Agency taken against those who have
received Warning Letters or other regulatory communications? What
action will be taken against these individuals?
Answer. FDA is conducting numerous investigations in the field
involving manufacturers and owners of unapproved excimer lasers. The
Agency anticipates that at least some of these investigations will lead
to enforcement actions, including seizure, injunction and or civil
penalty.
Question. Has anyone been injured with an unapproved, illegal
laser?
Answer. The Agency has received allegations of injuries, and is
currently looking into these allegations.
Question. How much longer will the Agency allow the users of these
illegal lasers to remain in non-compliance with FDA regulations?
Answer. The Agency has been working with the physician community to
bring these users into compliance. Initially, the physicians did not
have an understanding of their responsibilities under the device law,
and we waited to give them time to understand and to avail themselves
of the IDE or Certification process. Additionally, we were exploring
and evaluating our legal authority to regulate physicians and sort out
complex issues such as regulation of custom devices. At this point, the
Agency believes that unapproved lasers that are not under IDE should be
subject to regulatory action, and we are vigorously pursuing that end.
Question. The Food, Drug, and Cosmetic Act places a strict ban
against advertising or otherwise promoting the off-label use of drugs
and medical devices. I have been told that numerous physicians around
the country are actively promoting unapproved laser vision correction
procedures, that the Agency is aware of these advertising abuses, and
in fact has in its possession copies of many of these advertisements
and infomercials. Is this true, and, if so, why has the FDA not taken
enforcement action against the clear violation of the prohibition on
advertising or promoting unapproved procedures?
Answer. FDA has long maintained that off-label use of an approved
device without advertising is within the realm of the practice of
medicine and the Agency has not exercised its enforcement discretion in
this area. However, the Food, Drug, and Cosmetic Act prohibits the
advertising and promotion of off-label use of devices. FDA is aware
that some physicians are advertising unapproved refractive procedures
using excimer lasers. The Agency believes that the overriding concern
from a public health perspective is the use of an unapproved laser.
Thus, FDA is vigorously following up on the use of unapproved lasers.
Question. Does the Agency plan to take action, and if so, when?
Answer. We are vigorously following up on the use of unapproved
lasers. When we become aware that they are in fact advertising and
using an unapproved laser, the overriding issue is the use, not the
advertisement, of an unapproved laser. FDA intends to take enforcement
action in this area in the near future.
Question. What resources has the Agency put in place to assure that
these physician IDE sites are in compliance with FDA regulations and
that they receive adequate oversight to protect the public?
Answer. Staff from FDA's Office of Compliance, Office of Device
Evaluation, and Office of Regulatory Affairs are working together to
assure that physician IDE sites are in compliance with FDA regulations
and that they receive adequate oversight to protect the public. Actions
that are being taken include inspections of sights to determine
compliance. Further action will be taken against sights that are found
to be out of compliance, including withdrawal of IDE's and possible
seizure of the unapproved devices.
radiopharmaceuticals
Question. Why does the FDA on average take 29.8 months to review a
radiopharmaceutical NDA submission given their high level of safety as
measured by the incidence rate for adverse reactions?
Answer. In the past, we had a backlog of applications for
radiopharmaceutical drugs. For example, two applications in the fiscal
year 1994 submission cohort were overdue when acted upon, because we
were working to reduce an existing backlog including those for
radiopharmaceuticals. The backlog has now been eliminated and we are
now reviewing applications according to the PDUFA time frames.
Regarding the effect of the safety record of radiopharmaceuticals, a
historically good safety record of a broad class of drugs does not
eliminate the need to thoroughly review each member of the class and
ensure it is safe and effective. As our current results demonstrate, we
are able to provide a thorough and careful review and still meet our
PDUFA goals.
Question. Is there a reason why the review times for
radiopharmaceuticals have not improved under PDUFA, even while FDA has
shown improvement in the time it takes to review drugs in general?
Answer. Review times under PDUFA have improved quite dramatically
for drugs in general and for radiopharmaceutical in particular. Because
the FDA's focus was to eliminate the pre-PDUFA backlog before
concentrating on applications filed more recently, the overdue rate for
that division's 1994 submission cohort under PDUFA was 100 percent. For
the 1995 submission cohort, the overdue rate for NDA's was zero--a
substantial improvement which has continued in the 1996 submission
cohort. The improvement is even more striking when looking at the raw
numbers underlying the percentages. The 1994 cohort of new product
applications consisted of two original submissions that were filed,
each of which was reviewed in more time than allotted by the PDUFA
goals, and one resubmission that was reviewed on time. The very next
year, the 1995 cohort of applications filed included three original
submissions and three resubmissions, all of which were reviewed on time
or faster than the PDUFA goals. The 1996 cohort of applications that
were filed is larger still. The reasons for this improvement are
similar to the reasons for improvement for drugs in general:
accountability, clear objectives, and concomitantly enhanced resources
that were devoted to meeting those objectives. There is an additional
factor contributing to improvement in approval times--the elimination
of the pre-PDUFA backlog of NDA's. After completing that particular
body of work, the FDA was able to turn its full attention to PDUFA
applications and to meeting PDUFA goals, with the gratifying results I
have just described.
Question. Is there a reason why the Division of Medical Imaging and
Radiopharmaceutical Drug Products has one of the highest mean drug
review times? Is the PDUFA process only working well for certain drugs?
Answer. Again, the Division of Medical Imaging and
Radiopharmaceutical Drug Products had a backlog in the past, but this
is no longer the case and the division is now meeting its PDUFA goals.
food additive approvals
Question. To what extent has FDA looked at feasible plans for
improving the food additive approval process? Have you looked at a way
to provide a proprietary benefit in exchange for some type of fee?
Answer. FDA has instituted, and is continuing to implement, a
variety of reforms designed to improve and streamline the food and
color additive approval process. The goal of these initiatives is to
set in place a strong and credible food and color additive review
process that results in timely decision-making with predictable
outcomes.
FDA has initiated several new approaches to the review of food
ingredients that allow us to better prioritize our allocation of
resources. FDA has recently proposed to adopt a streamlined
notification process for substances whose use is generally recognized
as safe--GRAS--to replace the current petition process by which FDA has
affirmed, by rule, that the use of a food ingredient is GRAS.
Substances whose use is GRAS do not require FDA approval and we expect
that eliminating the petition and rulemaking on such substances will
free up critical resources for work on food additive petitions.
Similarly, FDA has also proposed to exclude certain food and color
additive petitions from a requirement to include an environmental
assessment, saving both reviewer and petitioner effort.
In the area of approval of ``indirect'' additives, such as food
contact substances, FDA has implemented a Threshold of Regulation
Policy whereby exemptions from the need to submit a food additive
petition may be granted for certain low-risk food contact substances.
More than 40 exemptions have been granted by letter under this policy
during the last two years for materials that would otherwise have been
the subject of food additive petitions. A Special Project Team has also
been established to expedite the review of other low-risk food contact
materials that are not eligible for the Threshold of Regulation Policy.
As a result, fewer resources have been expended.
FDA is undertaking many other management and process initiatives to
improve our guidance to prospective petitioners, establish and
articulate performance goals for timeliness of decision-making, ensure
that our communication to petitioners is timely and unambiguous, and
strengthen and better articulate filing criteria to increase the
likelihood that filed petitions will be complete and adequate for
timely review and regulation.
Under current statute, regulations permitting the use of new food
and color additives are generic--that is, any person may manufacture or
use an approved food or color additive in conformance with the
conditions of use permitted by the regulation. This construct has been
cited by industry groups as a disincentive to establishing a fee system
for the support of approval of food additives. Several possible
mechanisms to provide a proprietary benefit to petitioners have been
discussed. For example, the food and color additive approval system
could be constructed so that only the petitioner would have the right
to market the additive for a certain period of time. Alternatively, a
system incorporating ``data exclusivity'' could be established--that
is, for a period of time, the data a petitioner uses to support a food
or color additive petition could not be used by another applicant to
support approval of the same additive. Any system to provide a
proprietary benefit to petitioners would require amendment of the
statute.
Question. Exclusive of indirect additives and Generally Recognized
As Safe (GRAS) affirmation petitions, how many direct food additive
petitions were approved last year? How many had been pending more than
five years, and what was the average time they had been pending?
Answer. In fiscal year 1996, FDA completed action on a total of 22
direct food and color additive petitions. Of these, 13 were approvals.
FDA established or amended regulations for the use of 11 direct food
additives--substances intentionally added to food--as well as two color
additives for food use. In the other nine cases, the petitions were
either withdrawn by the petitioner or were dropped because they were
inadequate for filing.
FDA has 13 petitions which have been pending for five or more
years. I will provide, for the record, a table that displays the
average pending time for these petitions.
[The information follows:]
Approval times: Decision cohort fiscal year 1996--Direct food additive
petitions and color additive petitions pending 5 or more years
Action Months
Initial receipt of petition to approval (average)................. 29
Initial receipt of petition to approval (median).................. 19
Range............................................................. 6-99
=================================================================
________________________________________________
Last file \1\ to approval (average)............................... 11
Last file \1\ to approval (median)................................ 9
Range............................................................. 6-20
\1\ Last file refers to the date of receipt to a petition, in reject
status, of information necessary to complete the review.
Approvals for food additives and color additives are effective when
an order prescribing the conditions of safe use of a food additive is
published, or when an order listing a color additive is published with
a specified effective date. Thus, the intervals presented in the top
half of the table represent the total time from the date of receipt of
a fileable petition to the date of publication of a regulation. In many
cases, during the review of a petition, deficiencies in the data
supporting the safe use of the additive are identified; in such case,
the petitioner is notified and given the opportunity to amend the
petition to provide the necessary information. FDA does not have data
on how much of the total time from receipt to approval is ``FDA time''
and how much is ``petitioner time.'' However, we do have information
pertaining to the interval between the date of ``last filing'' (i.e.,
the date of receipt, to a petition in ``reject status'' of the
information necessary to complete review of the petition) and the date
of publication of a regulation.
Question. How many direct food additive petitions were submitted
last year?
Answer. In fiscal year 1996, FDA received six petitions to
establish or amend regulations for the use of direct food additives.
Question. How did you arrive at the figures $12 million for food
additives approvals, and $19 million for post-market surveillance?
Answer. FDA's budget must also be looked at in the context of the
overall plan the President has proposed for a balanced budget by fiscal
year 2002. New and expanded user fees have been proposed across the
Federal Government. The President's budget identifies by program area
and dollar amount where fees could be derived. This provides a more
substantial basis from which to develop reasonable and achievable user
fees for fiscal year 1998, with input from both Congress and the
affected regulated industries. We looked across the board at FDA
activities to determine which would be most appropriate for user fees.
Any specifics by activity area to be covered by user fees serves as a
useful starting point for any upcoming negotiations on the proposed
user fees among FDA, Congress, and the affected industries.
Proposals under the Foods program include: premarket approval
activities for food and color additive petitions submitted pursuant to
certain sections of the Food, Drug and Cosmetic Act--FD&C Act--of
$12,543, and partial funding of postmarket regulatory activities of
$19,024, as covered by section 704 of the FD&C Act. User fees are
proposed to cover essentially all of the costs of the premarket review
of petitions.
In general, postmarketing regulatory activities include not only
traditional domestic postmarketing activities but also emerging
strategies. These include partnering with state, local, professional
and industry groups and individuals, to enhance the quality and safety
of products. In addition, by increasing information sharing and
technical assistance so that establishments are operating with strong
quality assurance systems, the Agency anticipates that less formal
regulatory intervention may be required. Traditional domestic
postmarketing activities such as inspections, investigations, sample
collections and analyses, regulatory analytical methods development,
field exams, recall effectiveness checks, and injunctions and seizures
will continue to play a role in postmarketing regulation.
Postmarketing fees are based on the Agency's Official Establishment
Inventory, or OEI, and would be used to offset a portion of FDA's
postmarket activity expenses. For postmarket regulatory activity fees
we have determined a fee of about $550 per establishment, which would
be applied to the 35,369 Food and Cosmetics Establishments listed in
the OEI. Any establishment fees would be collected at the beginning of
the fiscal year.
Question. Last year, to address the severe backlog of additives,
money and personnel were temporarily transferred to the Center for Food
Safety and Applied Nutrition (CFSAN). What is the status of these
additional resources? When is this commitment scheduled to end? What
will this mean for CFSAN when future additional resources are no longer
available?
Answer. Review of food additive petitions is a high priority for
the Agency. FDA is committed to reforms that will permit the Agency to
achieve its goals of health protection, timeliness, and accountability
in the long-term.
In fiscal year 1996, CFSAN temporarily reassigned 23 FTE to
petition review activities in an effort to reduce the current inventory
of pending food additive petitions. Final decisions were made on
approximately 30 more petitions than were received during the year and
the cohort of 295 petitions reported to Congress in June of 1995 was
reduced by more than 100 petitions by the end of fiscal year 1996.
Great progress was made; however, much work still remains. In response,
CFSAN permanently reassigned eight of those individuals to petition
review activities and has continued to utilize temporary reassignments
as a means of providing additional resources to food additive petition
review activities. The remainder of the original individuals
temporarily reassigned returned to their permanent job assignments;
seven of these are committed to work on food additive petitions part-
time or on special petition-related projects. Temporary reassignments
of 14 other individuals from other programs in the Center have been
made in fiscal year 1997. It is expected that such temporary
reassignments will continue in order to accomplish the goals of
reducing the inventory of pending petitions and eliminating overdue
petitions.
FDA provided funds for two major contracts to assist in petition
review. One is for the review of toxicology studies contained in
petitions and the other is to review study packages from indirect
additive petitions. These contracts extend for three years and are
intended to reduce the inventory of data awaiting scientific review.
This will allow FDA scientists to focus on new petitions as they come
in rather than setting them aside to await completion of work on
earlier petitions. Contracts were also awarded to document petition
review resource needs, to assist in developing a higher threshold of
filing, to advise FDA on alternative safety decision models, and to
conduct petitioner workshops annually. These contracts will result in a
more efficient process--one where less time is spent in reviewing and
correcting inadequate petitions and where new decision strategies will
be available after a petition is received.
Funds were also provided to upgrade the information management
capabilities available to the food additive program. When fully
implemented, the new resources will aid in the searching, retrieval,
and review of data in food additive petitions, and will markedly
enhance document management. The work required to install, test, and
implement these resources is ongoing and is on schedule. FDA is
committed to reforms that will permit the Agency to achieve its goals
of timeliness, accountability and predictability in the review of
petitions over the long-term.
______
Questions Submitted by Senator Specter
methadone regulations
Question. Methadone has been used for over 30 years as a treatment
for heroin addiction. Is methadone safe to use?
Answer. FDA has approved methadone as a narcotic analgesic and for
the detoxification and maintenance treatment of narcotic dependence.
Methadone is safe under the conditions set forth in the product
labeling, and for the treatment of narcotic dependence, in the
regulations set forth under 21 CFR Sec. 291.505.
Question. Is methadone effective in treatment of heroin addiction?
Answer. FDA has determined that methadone is effective for the
detoxification and maintenance treatment of opioid addiction.
Question. What is the justification of the FDA for regulating
methadone differently than all other drugs?
Answer. As a narcotic intended for the treatment of narcotic
dependence, methadone falls under the Comprehensive Drug Abuse
Prevention and Control Act of 1970, CDAPCA, Public Law 91-513, and the
Narcotic Addict Treatment Act of 1974, NATA, 21 U.S.C. Sec. 823(g).
These statutes require the Secretary to consult with organizations and
the Attorney General to determine the appropriate methods for medically
treating narcotic addiction and to develop standards to determine
whether practitioners are qualified to provide narcotic treatment. In
addition, the NATA requires the Secretary to determine that narcotic
treatment providers will comply with standards that address the medical
use of narcotic drugs, including standards for providing narcotic drugs
for unsupervised use by individuals enrolled in a treatment program.
FDA, in conjunction with the National Institute on Drug Abuse, has
carried out the Department's responsibilities by enforcing process
oriented regulations. FDA is proposing to switch to an oversight system
that relies on accreditation to fulfill the Department's obligations in
this area.
Question. What is your view in regard to the conclusions of the
Institute of Medicine Report from 1995 on the Federal Regulation of
methadone treatment that concludes ``the risks to the public safety and
the public health of diverted methadone do not outweigh the benefits of
making methadone treatment more readily available.''?
Answer. FDA is aware of the risks to the public health associated
with the diversion of methadone. The current regulations include
extensive requirements, limitations, and conditions on providing
methadone to patients for unsupervised use. What is not obvious,
however, is the extent to which the risks associated with diversion
affect the availability of methadone treatment. Indeed, the Institute
of Medicine, or IOM report noted that there are many factors affecting
the availability of treatment, including financial factors, community
resistance to new or expanded programs, and others. In addition, in
several instances, the report stressed the need for quality treatment,
noting that no treatment is preferable to poor treatment.
The IOM report included many recommendations for changes to the
existing regulations. Included were recommendations directed at the
relaxation, or elimination, of most of the regulatory requirements
governing the provision of methadone for unsupervised use. The IOM was
careful to caution that a contingency should be available in case a
public health crisis resulted from recommended changes.
FDA is actively considering the IOM Report recommendations,
including diversion control recommendations, as it continues to
evaluate changes to the regulatory oversight system for methadone
treatment.
drug approvals
Question. As you know, the President's budget proposal would
redirect a portion of the prescription drug user fees to general
revenue. To what extent would this proposal, if enacted, negatively
impact the ability of the FDA to complete drug approvals on a timely
basis?
Answer. We are not aware of any proposal to redirect prescription
drug user fees to general revenue. Under the current legislation, FDA
deposits PDUFA collections into an FDA account at the Department of the
Treasury, and these resources are available to the Agency when
apportioned by the Office of Management and Budget. We do not
anticipate any change in this current practice and therefore do not
foresee any effect on our ability to complete drug approvals on a
timely basis.
Question. How is the FDA streamlining the process for obtaining
emergency Investigational New Drug approvals so terminal patients may
receive immediate treatment in dire situations?
Answer. FDA currently has a regulation specifically intended to
expedite obtaining an investigational drug for emergency use where the
situation does not allow time for submission of an IND. Generally, the
process works well. In most cases, FDA's review of a practitioner's
request for 21 C.F.R. Sec. 312.36 use of an investigational drug in an
emergency situation and FDA's authorization to the manufacturer to ship
the drug for that use can be accomplished over the telephone or by FAX
within a matter of hours. It should be noted that an emergency IND can
only be granted to a licensed physician and not to an individual
patient or manufacturer.
Notwithstanding the success of this program, FDA is looking at ways
to provide more consistent application of evaluation criteria and
procedures across reviewing divisions and is considering whether to
propose regulations to clarify the types of treatment uses that can be
authorized under emergency IND's and the criteria for their
authorization. However, there are certain circumstances that can affect
whether a drug may be made available under an IND for emergency use. If
a manufacturer of a drug does not want to ship the drug for such use,
FDA does not have the authority to require such shipment. If supplies
of the drug are low, such as in the situation where clinical trials are
being done with a lottery, the sponsor must decide whether making the
drug available under an emergency IND could jeopardize the conduct of
the ongoing trial. In all cases, even for emergency IND's, local
Internal Review Board oversight is required.
inspection of imported mushrooms
Question. I have been informed that the FDA and the State
Administration of Import and Export Commodity Inspection of China (SAC)
held a meeting in January of this year regarding the current automatic
detention order in effect for imports of canned mushrooms from China.
During that meeting, I understand that FDA discussed sending an
observation team to China. Has a trip to China been scheduled? Does FDA
have any plans to lift the automatic detention or change the lot by lot
release program?
Answer. A meeting was held on January 14, 1997, between
representatives of FDA and the State Administration of Import and
Export Commodity Inspection--SACI--of the Peoples' Republic of China,
or PRC. FDA's imposition of countrywide detention without physical
examination of canned mushrooms from PRC, due to the presence of
Staphylococcal enterotoxin--SET--was one of several items discussed.
PRC representatives indicated their concern with the FDA program, since
there had been a very low incidence of SET contamination of Chinese
mushrooms in the eight-year history of the program. The PRC
representatives also provided a summary of the improvements made by the
Chinese mushroom industry since 1989 and their government's oversight
of production and export.
FDA representatives informed SACI that the Agency still awaits the
information from PRC which was requested during a July 1996 meeting in
order to perform a thorough review of processing, shipment, and Chinese
government's oversight. FDA indicated that once this information is
received and reviewed, the Agency will determine whether a technical,
policy team should be sent to PRC to observe and evaluate the current
situation. To date, FDA has received some of the requested information,
which is now under review. FDA has also indicated that it is amenable
to scheduling a visit to PRC in the fall of 1997 and requested a letter
of invitation from SACI. However, pending the receipt of the remainder
of the requested information, results of the information review, and an
assessment of available agency resources, no FDA trip to PRC has been
scheduled to date.
Pending FDA's evaluation of the technical and regulatory
information provided by PRC, and verification that there has been
satisfactory resolution of the problems that resulted in the country-
wide detention without physical examination of canned mushrooms from
PRC, FDA would consider appropriate modifications to the current lot-
by-lot release program, and the necessity for country-wide detention
without physical examination of canned mushrooms from PRC. Currently,
FDA has no immediate plans to lift or change the lot-by-lot release
program.
Question. During 1996, were there any detentions or seizures of
imported canned mushrooms? If so, please provide the Subcommittee with
the details of each.
Answer. In fiscal year 1996 there were no seizures of imported
canned mushrooms from PRC for violations involving the presence of SET.
In addition, no shipments of product offered for entry under the lot-
by-lot program were refused entry.
______
Questions Submitted by Senator McConnell
recent court ruling and fda resources
Question. Last week, a United States District Court Judge ruled
that FDA lacks the statutory authority to regulate tobacco advertising
and promotion. The judge also stayed--or put a hold on--all of the
FDA's rules except for the minimum age rule and the rule requiring
retailers to card anyone who is younger than 27 years old.
Dr. Friedman, under the Synar Amendment, every state in the union
already is taking steps to increase its enforcement of its own minimum
age laws. Given these factors, does it make sense for FDA to continue
to expend resources on its tobacco rules, especially when the only
rules in effect duplicate ongoing state efforts?
Answer. There is a substantial difference between the provisions of
the Synar Amendment and the FDA tobacco regulations. The Synar
Amendment requires that, in order for State Substance Abuse Agencies to
receive federal block grants, States must enact and enforce legislation
prohibiting the sale of tobacco products to minors. Although all States
currently have such laws, their enforcement varies dramatically,
because block grant dollars cannot be used for such enforcement
efforts. In contrast, the FDA regulation establishes mandatory
conditions on the sale and distribution of tobacco products that apply
to manufacturers, distributors, and retailers of tobacco products.
FDA's regulation is enforceable through fines and other means for non-
compliance. The funds FDA has requested are for enforcement activities
to achieve compliance with the requirements of its regulation. Thus,
the funds requested by FDA are to be used for a different purpose than
those for the SAPT Block Grant related to Synar.
FDA believes that enforcement of its regulations is essential if
there is to be a reduction in the premature death and disease that
result from the use of cigarettes and smokeless tobacco. The problems
associated with nicotine addiction are so substantial, in fact, that it
will take the concerted efforts of everyone interested in improving and
protecting the health of children and adolescents to achieve the
Administration's goal of reducing the number of young people who use
cigarettes and smokeless tobacco by 50 percent over the next seven
years.
Question. For the record, please provide a revised estimate of the
resources (in dollars and FTE's) the FDA believes would be necessary to
implement the tobacco rules that have not been stayed by the United
States District Court.
Answer. The Administration is still requesting the full $34 million
for the tobacco initiative. The bulk of the money requested for fiscal
year 1998 is for state contracts to enforce the February 28 provisions
upheld by the court. Only a small portion--between $1 to $2 million--of
the planned outreach activities would have been devoted to the
advertising provisions overturned by the court. Those dollars will be
re-allocated to outreach for the access provisions already in effect.
fda's plan is redundant with state efforts to enforce tobacco minimum
age laws
Question. Under the Synar Amendment, a state risks losing federal
funding if it is not adequately enforcing its own tobacco minimum-age
laws. Please explain how the FDA's rules that took effect on February
28, 1997 are not duplicative of state minimum age laws already being
enforced by state officials?
Answer. The FDA rule complements all ongoing activities at the
state and local level aimed at reducing young people's use of tobacco.
Despite that fact that all states have minimum age laws for the sale of
tobacco, the incidence of young people's use of tobacco is rising
dramatically. Among 8th graders, the rate has climbed 50 percent in the
last six years. A coordinated effort between federal, state, and local
governments is essential to reduce the number of young people that use
tobacco products.
Question. Dr. Friedman, in FDA's April 23rd letter to me, FDA
indicated that the Substance Abuse and Mental Health Services
Administration has informed the FDA that ``all 50 States currently have
laws prohibiting tobacco sales to minors and that all States have
submitted their inspection methodologies and sampling designs'' to HHS.
Does FDA have any indication that the states are not adequately
enforcing their minimum age laws under the Synar Amendment?
Answer. According to SAMSHA, although all states have submitted
their block grant applications to SAMHSA describing their enforcement
efforts, not all applications have been reviewed by SAMHSA. Preliminary
results show that although states have begun enforcing their laws, the
level of enforcement varies from state to state.
Question. In the final rule implementing the Synar Amendment, HHS
indicated that states could use certain federal block grant funds
toward their retail inspection costs. Why is FDA requesting additional
expenditures to do a job that the states are already performing with
the aid of existing federal block grants?
Answer. There is a substantial difference between the provisions of
the Synar Amendment and the FDA tobacco regulations. The Synar
Amendment requires that, in order for State Substance Abuse Agencies to
receive federal block grants, States must enact and enforce legislation
prohibiting the sale of tobacco products to minors. Although all States
currently have such laws, their enforcement varies dramatically,
because block grant dollars cannot be used for such enforcement
efforts. In contrast, the FDA regulation establishes mandatory
conditions on the sale and distribution of tobacco products that apply
to manufacturers, distributors, and retailers of tobacco products.
FDA's regulation is enforceable through fines and other means for non-
compliance. The funds FDA has requested are for enforcement activities
to achieve compliance with the requirements of its regulation. Thus,
the funds requested by FDA are to be used for a different purpose than
those for the SAPT Block Grant related to Synar.
Question. FDA indicates its plan to ``commission'' state and local
officials to help enforce its tobacco rules. FDA also indicated in its
April 23rd letter to me that it does not ``necessarily'' plan to
commission only those state and local officials already responsible for
enforcing the state's own minimum age laws. Please explain why it would
be necessary for FDA to enforce its federal minimum age rules by
funding state officials other than those state officials currently
responsible for enforcing the State's own minimum age laws.
Answer. FDA is relying on the states to identify the appropriate
state agencies who will be contacted for contracting with the federal
government. It is possible that a state may identify an agency other
than the one currently responsible for enforcing the state's own
minimum age law.
fda's tobacco plan duplicates efforts
Question. FDA indicates that it wants to work with CDC to develop a
national survey of young people to determine, among other things, the
prevalence of tobacco usage and illegal purchase rates by minors.
Aren't such efforts duplicative in that state reports required under
the Synar Amendment are required to indicate illegal purchase rates?
Answer. No, these are not duplicative efforts. We are meeting and
working with both SAMHSA and CDC on this issue. SAMHSA, for purposes of
administering the Synar rule, is monitoring State inspection activities
and results. SAMHSA is not monitoring teen tobacco use rates.
Meanwhile, FDA is working with CDC to refine their existing
national survey of young people, to determine, among other things, the
prevalence of tobacco usage and illegal purchase rates by minors.
Question. FDA says that it wants to work with states to develop
comprehensive-tobacco-control demonstration projects. Don't the Centers
for Disease Control and Prevention and the National Cancer Institute
already provide millions of dollars to the states through the IMPACT
and ASSIST programs to help states develop comprehensive tobacco
control programs?
Answer. Enforcement of the FDA rule at the state and local level is
intended to complement all ongoing tobacco control activities including
those efforts underway under the auspices of IMPACT and ASSIST. FDA is
working and meeting with CDC and NIH to coordinate efforts.
fda should allocate its available resources to product review functions
Question. In the last Congress, this Committee repeatedly
encouraged FDA to reallocate its resources in order to meet its
statutory deadlines for the review of various product applications. If
FDA was able to find $34 million in its fiscal year 1998 request for
its tobacco rules, why hasn't FDA been able to find additional
resources for product review functions?
Answer. Improving the safety of the food supply and keeping tobacco
out of the hands of children are both initiatives of the utmost
importance and are very high priorities for FDA and this
Administration. While FDA's traditional activities in promoting and
protecting the public health through product review functions are of
vital importance, the Administration's budget for FDA should be viewed
in total, keeping in mind that it fits in with the President's plan for
an overall balanced budget by fiscal year 2002.
Question. From what functions did FDA take the $34 million?
Answer. The Administration's fiscal year 1998 budget for FDA
includes adequate funding to maintain our current level of activities
in our traditional areas of concern, as well as provides additional
funding for two important and high priority initiatives that correspond
with FDA's mission of protecting and promoting the public health--
reducing the incidence of death and illness associated with foodborne
pathogens through the Food Safety Initiative, and reducing the
availability and appeal of nicotine-containing tobacco products to
children.
prescription drug user fee act (pdufa)
Question. Dr. Friedman, during the House Commerce Committee hearing
you stated that FDA's base budget is not stable and this factor could
put PDUFA at risk of failure. If I recall correctly, user fees under
PDUFA can only be collected if appropriations for human drug
application review reach the level provided in fiscal year 1992 for
such costs multiplied by an adjustment factor. In your statement before
Commerce Committee, were you referring to the PDUFA I definition of a
base budget? If not, please define what a stable base fund for FDA is
measured by, and what level of funding is required?
Answer. Yes, Senator you are correct. PDUFA I was intended to
finance increases in the costs of the process to review new human drug
applications. Performance goals were established contingent to the
resources provided by user fees in addition to base appropriations
calculated by the level of FDA funding in fiscal year 1992 multiplied
by an adjustment factor.
Question. Did you make the President aware of the potential
consequences that an eight percent reduction in FDA budget authority
could have on the agency in light of the fact that no additional user
fees are authorized?
Answer. During the President's Budget development many proposals
were discussed fully. These fees are a part of a government-wide policy
to establish user fees. These user fees--tied to performance measures
in maintaining important government functions--are a key component to
achieving a balanced budget by the year 2002.
Question. Do you recommend authorization of the President's
proposed user fees as part of the PDUFA II reauthorization or in
separate legislation?
Answer. PDUFA has been a very successful program, facilitating the
availability of important new therapies to the public sooner than they
otherwise would have been available, and without sacrificing the
assurance of safety and effectiveness of these products. Obviously the
reauthorization of this program is a priority for the Agency and its
primary beneficiary, the public. Discussions with industry
representatives on PDUFA II have been productive in identifying several
areas where the overall process can be improved, including development
time. We would recommend reauthorization of this program either as
separate legislation or as part of the larger bill as proposed by the
Administration.
Question. FDA's fiscal year 1998 budget proposal states that the
agency intended to implement the new user fees, which supplant
appropriated resources, with performance measures and goals. In
addition, FDA stated it ``will work with its many constituencies,
including the regulated industry, to develop appropriate performance
goals.'' If FDA finds merit in setting performance measures and goals
for its obligations in food, devices, generics, animal drugs, and over-
the-counter drugs, why hasn't FDA pursued these to date?
Answer. FDA has always measured its performance. The fiscal year
1998 President's budget, with its inclusion of new user fees, provided
an excellent opportunity to tie our request with performance measures
and goals, as we prepare for a performance-based budget for fiscal year
1999, as required by the Government Performance Results Act.
Question. Why has future progress on these accountability
initiatives been staked to the implementation of substitution user
fees?
Answer. The performance measures described relate to the
availability of resources at the total levels indicated for each
program, whether those resources are from a combination of budget
authority and user fees or all budget authority. However, the proposal
for new user fees provided FDA with an opportunity to tie our budget
request to performance measures, as required by the Government
Performance Results Act, or GPRA. The fiscal year 1999 budget will be
the first under full coverage of GPRA, and will reflect progress on
performance goals and measures.
Question. I have noted with interest the FDA's response to my
questions from the FDA hearing before the Senate Labor and Human
Resources states that ``it is appropriate that the regulated industries
contribute a share of FDA's cost of ensuring the safety and
effectiveness of their products.'' Second, the FDA's budget states that
the FDA supports the development of ``appropriate performance goals to
ensure'' that user fees ``will be used to finance and enhance program
activities.'' Appropriate is a vague, relative term, Dr. Friedman. Are
members of this subcommittee to conclude that FDA means that it is
``appropriate'' for PDUFA to provide additive funds while any new user
fees substitute appropriated funds?
Answer. The President's fiscal year 1998 request includes a variety
of different user fees as part of FDA's budget, and in the overall
context of a balanced budget by the year 2002. User fees in need of
reauthorization--the Prescription Drug User Fee Act and the Mammography
Quality Standards Act--are additive. To meet the requirements of a
balanced budget by fiscal year 2002, the President's budget also
includes proposals for a number of new user fees which are not additive
to existing resources, but substitute for appropriated funds, as a way
to reduce the deficit. In either case, FDA remains committed to
developing performance goals that reflect the level of resources
anticipated.
Question. Relative to performance goals, how do ``appropriate''
performance goals differ from what FDA does now?
Answer. FDA has been working to develop additional performance
measures as well as working to fine tune its current performance
measures that will accurately reflect the important work done by the
Agency in our core activities of premarket review and postmarket
assurance. This work has been driven by the statutory requirement for a
performance-based budget for fiscal year 1999, stipulated by the
Government Performance Results Act.
FDA is making progress in defining results-oriented performance
measures through a vehicle which we are defining as ``process
improvement'' goals. These are goals that position the Agency to be
better able to strive toward outcome goals such as reduction in product
hazards. Process improvement goals can be one of two types, as
illustrated in connection with our request for additional funding for
the Food Safety Initiative.
First are those that reinvent programs to be better able to produce
outcomes. An example of this type of goal might be to establish a
collaborative arrangement with states, and the regulated industry, so
the appropriate persons are working together to produce results that
these institutions working alone are not able to accomplish. An example
of this would be the Agency's seafood initiative in which FDA, the
States, and the regulated industry work together to establish an
industry managed quality control system which will position the
industry to produce consistently high quality and safe seafood
products. The HACCP system--Hazard Analysis Critical Control Points--is
an illustration of a reinvention performance goal that will make major
differences in the safety of seafood to the U.S. consumer.
Second are those that establish a capability to measure and track
outcomes. Examples of such process improvement goals include the
establishment of a seafood data base which will collect information on
product hazard information. Another example would be the Agency's work
with other Federal regulators to establish a Sentinel System which
collects microbiological data on foods, and which will enhance the
government's capability of tracking food safety outcomes that will be
of interest to Congress and the public.
The challenges to such endeavors include the expense associated
with establishing such systems and institutional arrangements, the
continuing uncertainty that causal links can ever be established
between Agency efforts and desirable end outcomes, and the usual
cultural resistance of moving from traditional organizational
arrangements and measures that require reliance on influence rather
than control to produce desired effects.
Question. Dr. Friedman, you've expressed repeated concerns that
without at least level funding with fiscal year 1997, the FDA will not
be able to perform its statutory duties to protect the public's health
and safety. Third party review has generated much attention in recent
years as a means to reduce the time necessary for evaluating safety and
efficacy and to reduce resource demands on the FDA. How could third
party review entities alleviate FDA's budget constraints?
Answer. FDA is exploring this mechanism, but the concept of third
party reviews is problematic for several reasons. First, FDA's
scientific and clinical experts are charged with exercising independent
and unbiased judgment. They comply with stringent financial disclosure
and conflict-of-interest requirements designed to protect the decision-
making process against bias. It is not clear how or whether this
independence can be maintained with the private sector, particularly
since the sponsor gets to choose the private party and repeat business
may depend on the sponsor's satisfaction with the private party's
decision.
Second, FDA's reviewers have extensive knowledge about all of the
similar products that are made by different companies around the
country. When a reviewer looks at all of the drugs for arthritis and
other inflammatory diseases, or all of the heart valves, what that
reviewer learns from each review increases his/her understanding of
that group of drugs or devices and their effect on the body. As a
result, FDA reviewers see problems that reviewers with less information
may not see.
The third problem with privatization is the lack of continuity.
Third party reviewers may have little knowledge of the specific
development process for the product and/or of the development
agreements made during the process.
FDA believes that contracting out product review to third parties
should be done only if there is evidence that it can be done without
jeopardizing the public health. FDA has been working on a pilot program
to determine whether third parties can accomplish the goal of getting
safe and effective products to the American public.
Question. Dr. Friedman, FDA provided an incomplete answer to my
question regarding FDA's plan to respond to industry members who
request proof that a dollar in new user fees pays for a dollar in
review work within their specified account. FDA's letter notes that
PDUFA is independently audited and these funds are meticulously
accounted for. I commend the agency on its careful attention to the
concerns of drug companies. However, does the FDA believe that PDUFA
accounting methods should be used for future user fee proposals?
Answer. FDA believes that funds received for specific activities
should be used only for those activities. FDA has experience under the
Prescription Drug User Fee Act, or PDUFA, and the Mammography Quality
Standards Act, or MQSA, of assuring the use of any fees collected to
fund specific activities. FDA is committed to continuing this practice.
Let me assure you that any fees collected under legislative authority
that requires such fees to be used for specific programs or activities
will be used for the program areas so designated. Further, as we
continue discussions with Congress and industry on the proposed user
fees, we would be amenable to including this particular point as part
of those discussions.
Question. Would the FDA object to the consistent use of PDUFA
accounting methods throughout the agency? If so, what problems does FDA
foresee in such a system?
Answer. Providing for appropriate financial management procedures
and controls for the review process of Human Drug Applications, as
required by PDUFA, presented a number of challenges to FDA financial
and program managers. This is primarily because the Act created a
definition for the process which included a unique subset of activities
to be included, and specifically excluded other functions of the
offices involved in the process for which user fees could not be
allocated. To begin with, FDA first had to examine and amplify the
definition of what is included in the process and what is excluded from
it. In doing this, we found that none of FDA's accounting cost centers,
in their entirety, could be included in this definition. This required
an extra level of time reporting, in order to meet the unique
requirements. Pieces of each had to be excluded, because of specific
exclusions in the new statutory definition, and in the legislative
history.
Since these inclusions and exclusions defined a totally new subset
of FDA activities, it was necessary to develop and implement a
methodology that would allow the agency retrospectively to capture the
fiscal year 1992 costs from the ``base year'' for the newly defined
``Process for the Review of Human Drug Applications'' and allow that
same methodology design to be used for future year cost management and
calculations.
Costs are accumulated using a variety of methods including time
reporting, management surveys, and detailed interviews which are
specifically tailored to meet the requirements of PDUFA. In essence,
the procedural methods FDA utilizes for PDUFA are an overlay and in
addition to FDA's core accounting system to meet a unique set of needs.
While these techniques are very reasonable to apply for PDUFA, they do
add to our financial management costs and may be unnecessarily
burdensome to be implemented throughout FDA for existing needs.
However, if FDA were to implement new user fee programs, such as those
proposed in the fiscal year 1998 budget, with a defined subset of
activities, it is likely that many of the same methodologies for the
allocation and control of costs would be employed by the Agency.
fda--fte
Question. Dr. Friedman, can you provide information on the number
of full-time equivalent positions that have been supported exclusively
by user fees to date and the projected number of FTE's that would be
funded by user fees under the fiscal year 1998 budget?
Answer. During fiscal year 1996 the Agency financed 600 FTE with
collections authorized by PDUFA. The Agency expects to continue at
least this level of FTE in 1997 and 1998, and possibly more if
application workload and accompanying fees continue to increase. For
MQSA, FDA financed 43 FTE's, and estimates 35 for both fiscal years
1997 and 1998. For the new user fees proposed in the Administration's
budget, 1,120 FTE's would be financed.
Question. Dr. Friedman, during the House Agriculture Appropriations
Subcommittee hearing, you stated that each year FDA experiences a 2.5
percent reduction in FTE's, and that the FDA is prepared to absorb the
cost of inflation through efficiencies. Can you describe those
efficiencies for this subcommittee?
Answer. Our budget has been roughly flat in recent years. As a
result, FDA's budget has actually declined in real terms due to
increased inflationary costs for pay and benefits, and other operating
expenses. Even with this absorption, FDA is committed to making the
government work better and continues to be active in response to the
efforts of the National Performance Review, NPR, and the HHS
streamlining initiatives, and its own reviews to support its own
streamlining and reinvention efforts. To meet these inflationary costs,
we have initiated specific streamlining and reinvention initiatives.
Building on our central mission to promote and protect the public
health, we have embarked in the past year on five far-reaching
reinvention initiatives: reforming drug and medical device regulation;
overhauling regulation of drugs made from biotechnology; streamlining
food safety regulations; reinventing animal drugs; and increasing the
availability of new cancer therapies. When fully implemented it is
expected that these reinvention initiatives could save industry
millions of dollars, and help FDA attain its streamlining goals, while
investing agency resources in its core mission to promote and protect
the health of the American people.
The Agency is continuing with the Reinventing Administrative
Management Program, or RAMP, designed to gain further efficiencies in
administrative and management systems. Several RAMP initiatives have
helped by reducing the number of reviews and redundant steps in
administrative processes and more will follow.
The Streamlining Administrative Management project encourages
senior management officials to redelegate administrative authorities to
as low a level within their organizations as they consider appropriate.
In other streamlining efforts, FDA analyzed supervisory ratios and
spans of control agency-wide and initiated programs focusing on
eliminating redundant and unnecessary steps and on reducing internal
management controls. One such initiative is that over 100 policies
addressing principles and procedures to enhance committee integrity and
accountability were streamlined which eliminated bottlenecks in the
process and greatly reduced the amount of time and paperwork. We
reengineered the process for obtaining and reviewing financial
disclosure forms, thus reducing the time required to complete the forms
from 3 hours to 15 minutes. We reduced, from three levels to one, the
number of approvals required to clear conflict of interest waivers for
government employees serving on advisory committees. We implemented an
Administrative Quality Assurance Program in compliance with the Federal
Managers Financial Integrity Act. This program, a combined effort of
headquarters and field offices, is designed to assess the management
controls and programmatic requirements within selected administrative
field components and make improvements. Thus far, the program has
replaced three existing review programs, improved the follow-up on
findings, and reduced travel time and checklists.
GPRA has also played a large role in the reinvention process. FDA
implemented a broad-based training initiative to enhance manager
preparation for incorporation of performance measures as an integral
part of planning and managing their programs. To date, over 400 agency
managers have received hands-on training in performance measurement
techniques through the GPRA pilot and training efforts. The combination
of FDA's reinvention and streamlining initiatives will enable the
Agency to position itself for the 21st century and manage more
efficiently while carrying out its mission of protecting the public
health.
Question. Do I understand correctly that such efficiencies will
save 3 percent of the FDA's annual budget?
Answer. No, but these actions should help us absorb the roughly
three percent in anticipated inflationary costs for fiscal year 1998
for which we did not receive additional appropriations.
Question. Are these accounted for in the fiscal year 1998 budget?
Answer. Yes. The President's fiscal year 1998 budget request, taken
in total, would provide FDA the resources necessary to undertake our
core activities of premarket approval and postmarket assurance as we
fulfill our mission of promoting and protecting the public health.
Question. If so, do the savings apply to the total budget, Salaries
& Expenses, certain activities such as generics review?
Answer. Our ability to absorb inflation costs through increased
efficiencies would apply across all FDA programs.
Question. If not, why are they absent?
Answer. The President's fiscal year 1998 budget request, would
provide FDA the resources necessary to undertake our core activities of
premarket approval and postmarket assurance.
Question. I note with interest that the FDA budget justification
lists 329 FTE's as dedicated to Generic Drug Evaluation. Am I wrong in
my understanding that the Office of Generic Drugs has a 126 FTE
ceiling?
Answer. The Office of Generic Drugs has a 125 FTE ceiling.
Question. Can you explain the 200 FTE discrepancy?
Answer. The total number of FTE in the Agency allocated to the
generic drug review process is 329. Of these, 125 represent the ceiling
for the Office of Generic Drugs, Center for Drug Evaluation and
Research, or CDER. Their primary mission is to review and evaluate
Abbreviated New Drug Applications and Abbreviated Antibiotic Drug
Applications, establish bioequivalence specifications for drug
products, and develop guidelines for bioequivalence reviews. An
additional 90 FTE located in other CDER organizations also contribute
to the generic drug review process. These individuals include
additional reviewers, regulatory staff, information technology support
staff and other support staff. The remaining 114 FTE provide
inspectional support in the Office of Regulatory Affairs.
shifting of resources to user fees supported activities
Question. When questioned about deficiencies in performance, the
FDA points to a lack of adequate resources. Dr. Friedman, it appears to
me that FDA's management of resources is also a critical component in
the performance equation.
I note with interest that the FDA budget justification lists 329
FTE's as dedicated to Generic Drug Evaluation. Am I wrong in my
understanding that the Office of Generic Drugs has a 126 FTE ceiling?
Can you explain the 200 FTE discrepancy?
Dr. Friedman, several questions recently raised in the media
focused on FDA's practice of shifting assigned resources to other
activities. For example, the FDA has consistently told the generic drug
industry that the reason why generic drug reviews take so long is
because the agency lacks the resources needed to hire more reviewers.
Yet press reports indicate that the fundamental reason generic drug
reviews take so long is because FDA is shifting resources out of the
Office of Generic Drugs in order to meet the PDUFA goals for new drug
approvals. In addition, an FDA official testified that the reason food
additive petition reviews were so long was due in FDA's focus on
meeting PDUFA goals at a recent hearing before the House Subcommittee
on Government Reform and Oversight.
In contrast, I understand House Commerce Oversight and
Investigations Subcommittee Chairman Joe Barton expressed grave
concerns regarding the possible use of PDUFA funds for other FDA
activities.
Dr. Friedman, I know you share my concern that this subcommittee
faces difficult decisions regarding funding allocations. Reliable data
and budgeting are paramount in assuring member confidence that every
dollar of approved funding goes to the function that this subcommittee
assigns. Please clarify to this subcommittee FDA's response to these
reports of resource ``borrowing.'' What resource reporting methods
would provide this subcommittee with the necessary information to
evaluate the accuracy and legitimacy of questions regarding resource
``borrowing.''
Answer. The issue involves protection of certain activities from
reductions to which other activities are subject. Under PDUFA, fees can
only be collected and made available to cover increases in the costs
for the process to review human drug applications over and above a base
level of appropriated resources, as provided in the Federal Food, Drug
and Cosmetic Act, in section 736 (g)(2)(B). This provision of the PDUFA
legislation along with the requirement to apply an adjustment factor
calculation, defined in section 735 (8) of the FD&C Act, to the fiscal
year 1992 base level of appropriated funding for the process, was
enacted to ensure that user fees collected under PDUFA are indeed
additive resources for the review of human drug applications. In the
straight-lined budget environment to which FDA has been subject for the
past several years, when a significant portion of base appropriated
resources must remain stable or increase, other activities must take a
higher proportion reduction to absorb increased inflation costs.
fda priorities
Question. FDA's fiscal year 1998 budget request proposes about $244
million in regulatory fees to be paid by the industries it regulates.
The request also included $58 million for new agency initiatives.
Specifically, FDA requests $24 million to implement the President's
``Food Safety Initiative'' and $34 million to implement the FDA
regulation prohibiting advertising of tobacco products to children. FDA
consistently fails to meet its statutory deadlines for review of food,
drug, and medical device applications and petitions and claims that the
agency is unable to meet these deadlines because it lacks the necessary
resources. Dr. Friedman, on average, your agency fails to meet its
statutory deadlines to review petitions and applications for foods,
drugs, and medical devices. You claim that FDA lacks the resources
necessary to meet these statutory duties. Yet, FDA proposes two new
spending initiatives totaling $58 million. All of this comes in a year
when discretionary monies are tighter than ever. Let me ask you about
the priority setting issue this Committee will probably face. Should
existing FDA activities be cut to fund new spending initiatives or is
maintenance of existing agency activities a priority over new spending
initiatives?
Answer. The Administration's budget for FDA should be viewed in
total, keeping in mind that it fits in with the President's overall
balanced budget plan by fiscal year 2002. I am unable, at this time, to
prioritize among the new funding included in the budget versus our
traditional areas of concern. Improving the safety of the food supply
and keeping tobacco out of the hands of children are both initiatives
of the utmost importance and are very high priorities for FDA and this
Administration. However, FDA's traditional activities in promoting and
protecting the public health through premarket review and postmarket
assurance are also of vital importance.
FDA has made strides in improving performance its many programs.
For human drugs and biologics, we have consistently succeeded in
meeting and even exceeding all performance measures established in the
Prescription Drug User Fee Act, or PDUFA.
But even in areas where we did not receive additional resources, we
continue to make progress. In medical devices we have improved
premarket approval reviews, or PMA's, while maintaining review times
for abbreviated applications--the 510(k)'s. This latter category of
applications--which accounts for the vast majority of all device
submissions--covers devices that are substantially equivalent to those
already on the market. In fiscal year 1996, we approved 43 PMA's, a 6-
year high, and 24 major new products, an all-time high. Further, eight
of the 15 PMA's submitted to FDA in the first half of fiscal year 1996
received a first action within the 180-day deadline--significantly
better than in either 1994 or 1995.
Even though we are approving more PMA's for increasingly complex
devices, and we have improved the time to first action, the PMA
approval time is coming down only slowly. It takes too long--more than
two years--to get a device through the process. We continue to focus on
bringing down PMA review times, just as we have done in the human drug
area.
FDA has also successfully managed the review times for 510(k)
applications. In fiscal year 1996, the median review time for these
devices that received a finding of substantial equivalence was 85 days.
The reviews were almost 70 percent longer--144 days--at their peak in
1993. Even accounting for applications that had to be returned to the
manufacturer for more information, the average 510(k) review time in
fiscal year 1996 was 110 days, down from the peak of 184 days in fiscal
year 1994.
Even with our best efforts, there is still room for improvement,
particularly in the area of food additive petitions. In the past, we
have fallen short on average of meeting statutory deadlines. However,
in the past few years, we have made a concerted effort to improve in
this area by speeding up the review process and reducing the inventory
of pending petitions. Scientists from other program areas were shifted
to petition review, the existing electronic information processing
infrastructure was modernized, technical services were contracted out
to third parties, and we provided guidance to petitioners on how to
improve the quality of their submissions to the Agency. These efforts
have paid off. In June 1995, there were 295 petitions in the inventory.
By the end of fiscal year 1996, we had received an additional 82
petitions, yet the inventory was 60 below the total in June 1995. We
approved the highest number of petitions in a decade--54--during
calendar year 1996. Further, the median time from receipt to approval
of food and color additive petitions decreased from 37 months in fiscal
year 1993 to 27 months in fiscal year 1996. While we are still not
where we want to be, we clearly are continuing to make progress.
The new user fees proposed in the budget would allow us to continue
our current level of activity in each of these areas.
______
Questions Submitted by Senator Burns
user fees
Question. The fiscal year 1998 budget request has a nearly $68
million decrease for non-user fee budget authority, but a nearly $69
million increase in total funding. The increase is accounted for by new
user fees. What is the rationale for the decrease in budget authority,
and how will the decrease affect the FDA's ability to review new and
supplemental applications if new user fees are not authorized?
Answer. The Administration's budget for FDA should be viewed in
total, keeping in mind that it fits in with the President's plan for an
overall balanced budget by fiscal year 2002. The President's Budget
proposes new user fees for many FDA activities in the context of
constructing a balanced budget by 2002. The Administration believes
these new user fees are appropriate funding mechanisms in that the
industries regulated by FDA benefit from increased consumer confidence
in their products.
If the proposed user fees are not authorized and the base resources
replaced by these user fees are not restored, the impact across all FDA
programs would be tremendously detrimental. The Administration is
proposing new user fees of $131,643,000, of which $122,436,000 would
replace existing base appropriation resources, and 1,120 FTE. Without
new user fees or the restored base resources, the necessary reductions
would be felt across each program area of FDA.
Further, the President's budget included new funding for food
safety and tobacco regulation. At this point in time, I cannot say with
any degree of certainty where specific cuts would be taken, but given
the magnitude of the potential reduction, I can safely say that review
times and backlogs for all FDA-regulated products would increase
substantially. FDA's ability to fulfill its mission of protecting and
promoting the health of the American public would be seriously
undermined.
Question. Do you believe that new user fees, beyond those
authorized under the Prescription Drug User Fee Act (PDUFA), are
justified to offset decreased budget authority, and is this good policy
in light of the success of PDUFA?
Answer. We believe that PDUFA, with it's reliance on performance
measures, goals, and program improvements can be a successful model for
user fees in other FDA programs to enhance performance and efficiency.
The industries regulated by FDA derive valuable benefits from some FDA
activities, including increased customer confidence in their products
and significant protection from liability. FDA's reputation also
improves the competitive position of American firms in overseas
markets. The President's budget proposes that the regulated industries
contribute a share of FDA's cost of ensuring the safety and
effectiveness of their products. The following are the types of user
fees, by program area, being proposed by the Administration. We intend
to work with Congress, industry and other affected parties to develop
these or other proposals to achieve informed consideration of proposed
user fees, and to ensure necessary funding for important FDA public
health activities in fiscal year 1998. The new user fees proposed in
the President's Budget and before the Committee are based on the PDUFA
model but proposed in the context of balancing the budget by 2002.
______
Questions Submitted by Senator Bumpers
fiscal year 1998 program levels (user fees)
Question. The fiscal year 1998 budget shows an increased program
level, but assumes new user fees. What reception are you getting from
the authorization committee and the regulated community from the user
fee proposals?
Answer. New and expanded user fees were proposed across the Federal
Government as part of the overall plan the President proposed earlier
this year for a balanced budget by fiscal year 2002. FDA's authorizing
committees in the House and Senate have not yet held hearings or
invited testimony from FDA specifically on the user fee proposals, with
the exception of a House Commerce Committee hearing on the Prescription
Drug User Fee Act, or PDUFA. The House and Senate authorizing
committees have expressed interest in timely reauthorization of PDUFA,
which also has the highest support from industry. Although no extensive
discussions have been held on the other user fee proposals, the
regulated industry has not expressed support of these fees.
fda field operations
Question. Over the course of the past several years, FDA has
received overall increases in budget authority from this subcommittee.
In fiscal year 1994, the total made available (including user fees) was
$869.6 million. For fiscal year 1997, the amount is $995.9 million and
you propose an increase to $1.064 billion for fiscal year 1998. At the
same time, I hear of reductions in operational activities at the field
level. For example, I understand NCTR has lost 20 or more positions
over the same period due to budget shortfalls. Would you respond to
this issue.
Answer. In fiscal year 1994, NCTR utilized 249 budget authority
FTE. The estimate of budget authority FTE utilization for NCTR in
fiscal year 1997 and fiscal year 1998 is 223. This is a net loss of 26
FTE by the NCTR between fiscal year 1994 and fiscal year 1998. The bulk
of this reduction, 20 FTE, is the NCTR program share of the President's
initiative to reduce the deficit by streamlining Federal employment.
The remaining decrease of 6 FTE is the result of the NCTR absorbing a
share of agency-wide reductions.
NCTR base resources have been fairly consistent for the past
several years, both in dollar terms and as a percentage of the Agency's
total Salaries and Expenses appropriation. Fluctuations are
attributable to the amount of one-time contract support made available
to the NCTR. Reductions in funding for the NCTR and other programs have
resulted from the Agency absorbing contract and salary inflation
increases and a general decline in available operating costs to all FDA
programs.
Question. What amounts of the budget that would have otherwise gone
to NCTR have been used for other operational activities. What might
those activities be? Which of these activities might be referred to as
``initiatives''?
Answer. The adjustment of $5.7 million in the amount planned for
NCTR in fiscal year 1997 is not really a reallocation to other
programs, but an adjustment to reflect the true continuing costs of
FDA's major programs. The estimate for NCTR furnished to the Committee
in mid-1996 was too high because it was based on an unusually high
level of funding for NCTR in fiscal year 1995.
The reason that the obligations for NCTR were unusually high in
fiscal year 1995 relates to the nature of NCTR's operating budget,
which includes a number of support service contracts. NCTR relies on a
high level of contract support for managing its facilities, maintaining
its animal colonies, and for many other research support services. In
past years, FDA has redirected funds toward the end of the year from
other programs to NCTR for its contract support. NCTR's operating
budget is then reduced by the same amount at the beginning of the next
year so that the overall level of funding remains relatively constant.
The Agency is not able to provide these additional funds to the NCTR at
a consistent level every year, but endeavors to keep NCTR funding at a
``base'' level necessary to maintain its current level of operations.
The Agency's current estimate for NCTR for fiscal year 1997 of $31.3
million is very similar to NCTR's actual expenditures for fiscal year
1996 of just under $31 million. The current fiscal year 1997 estimate
reflects the current planned level of funding for NCTR and for all
other programs.
The reallocations from the NCTR to the other program areas are not
truly program increases or decreases, but adjustments to more
accurately reflect the continuing cost in fiscal year 1997 of the level
of program activities conducted in fiscal year 1996. However, since the
fiscal year 1997 appropriation did not include inflationary allowances,
all programs have had to absorb a reduction in their operating funds,
and NCTR has had to absorb its proportionate share of this reduction.
In partial compensation for this, the Agency did allocate an increase
of $533,000 to NCTR early in fiscal year 1997 to absorb some of the
inflation in NCTR's contract costs.
nctr lab construction
Question. I understand construction of the Arkansas Regional Lab
(NCTR) is underway. Will the amount requested for fiscal year 1998
complete construction of Phase II at NCTR?
Answer. The fiscal year 1997 appropriation of $13,000,000 for Phase
I of the Arkansas Regional Laboratory, ARL, will support construction
of the building, foundation, substructure, superstructure, exterior
enclosure and roofing as well as major building systems such as fire
protection, HVAC, electrical and some site work. The fiscal year 1998
request for $14,550,000 will complete Phase II, the laboratory portion
of the project, of the construction of the ARL, by completing building
systems and providing laboratory fit-out. This amount is based on the
Architecture and Engineering estimate. The construction bid process for
Phase I is underway and will determine the exact amount needed to
complete the ARL. Some portion of the ARL fit-out planned in Phase II
is likely to be deferred to Phase III.
Question. What will be the total remaining cost to complete Phase
III?
Answer. Phase III is estimated to be $9,800,000 and provides the
renovation of the existing NCTR Building 50 in its entirety to
accommodate the common ORA/NCTR administrative and support area. This
projection is based on the Architect/Engineer estimate. The
construction bid process for Phase I is underway and will determine the
exact amount to complete Phase III. Construction and construction
management costs are estimated at $37,400,000.
Question. Does FDA intend to seek a full request for Phase III in
the fiscal year 1999 budget?
Answer. FDA and the ORA Laboratory Consolidation Plan require the
completion of all Phases for the ARL project to be successful in
providing the state-of-the-art facility and quality of work life
environments which ORA and NCTR staff need. Hence, FDA will address the
ARL project and Phase III in subsequent years.
lab consolidation
Question. Your plan for lab consolidation includes the Arkansas
Regional Lab as a facility which will host operations current conducted
at several other facilities. What is the status of FDA field lab
consolidation?
Answer. In 1994, ORA received approval from the Secretary of Health
and Human Services to proceed with streamlining laboratory operations.
The plan calls for the creation of 5 large multipurpose laboratories in
Seattle, Washington; Los Angeles, California; Jefferson, Arkansas; New
York, New York; and Atlanta, Georgia; and 4 specialty laboratories in
San Juan, Puerto Rico; Winchester, Massachusetts; Philadelphia,
Pennsylvania; and Cincinnati, Ohio; for a total of nine field labs,
replacing the current network of eighteen laboratories, over a 20-year
period, from 1994 to 2014. FDA projects costs savings of $112.7
million, based on the fiscal year 1997 annual review and updated cost
estimates, namely rents and budget outlays toward lab consolidation.
FDA will maintain inspection, public affairs and enforcement operations
at the current District offices and resident posts. In fiscal year
1995, 1996 and 1997 appropriations, FDA received appropriations for the
design and land acquisition for the Los Angeles and Arkansas new
facilities; the construction of ARL Phase I core and shell.
Currently FDA has formulated Building and Facility plans including
new construction, expansion, restructuring, and decommissioning, as
well as personnel transfer plans which carry out the ORA 21 Laboratory
Consolidation goals and coincide with current facility lease expiration
dates.
In fiscal year 1997, three FDA laboratories, Buffalo, Chicago and
Cincinnati are scheduled to be closed and two laboratories,
Philadelphia and Winchester, MA, restructured. The fiscal year 1997
work plan comprehensively transferred the corresponding analytical
programs and resources to the respective multipurpose or specialty
laboratories. I would be happy to provide for the record a list of
dates for either closing or restructuring for each of these labs as
well as provide more detail on our planned laboratory consolidation.
[The information follows:]
Lab closure dates: Buffalo, October 1, 1996; Chicago, July 1, 1997;
and Cincinnati, June 30, 1997.
Lab restructure dates: Philadelphia, October 1, 1996; Winchester
Engineering and Analytical Center, July 1, 1997.
ORA 21 Multipurpose labs
1. New York-Northeast Regional Laboratory, Northeast Regional
Office and New York District Office-Jamaica, Queens.--An authorization
for prospectus was approved in 1994 with delineated area in the Borough
of Queens. An Architect and Engineering or A&E Program of Requirements
was prepared for 75,000 net sq. ft. laboratory and 100,000 net sq. ft.
regional and district office facility. In fiscal year 1996, GSA/FDA
finalized negotiations for the 4.5 acre site at York College, Jamaica
Queens. GSA had intended to award the lease by April 1997. We have now
been advised by GSA that the lead offeror has rescinded his proposal.
GSA will now go to other offerors to continue the project. FDA
occupancy has been scheduled for March-May 1999.
2. Arkansas Regional Laboratory.--In fiscal year 1995, Congress
authorized $2,500,000 for A&E design for the ARL. The ARL A&E design
was completed in March 1996. In fiscal year 1996, $3,800,000 was
appropriated for the joint ARL/NCTR facility. fiscal year 1996 funds
were used for A&E design items including construction of an animal
quarantine facility and preparation of space for an ORA Dioxin lab
facility. ARL facility construction is estimated at $37,400,000. Phase
I construction funds were approved in fiscal year 1997. In fiscal year
1998, $14,550,000 is requested to complete Phase II, the fit out of
Arkansas Regional laboratory. Construction bid process is underway and
award is anticipated summer of 1997. Phase III, the NCTR building 50
renovation and the new common ORA/NCTR administrative and support area
was initially estimated at $9,800,000.
3. Los Angeles-University of California at Irvine.--In fiscal year
1995, $9,800,000 was appropriated for A&E design and land acquisition.
FDA, through the Corps of Engineers, has awarded an A&E design contract
to Zimmer, Gunsul, Frasca/HDR, and acquired 10 acres of land, at
University of California at Irvine. FDA and the A&E firm have developed
a design concept for the replacement laboratory, which is planned to
house 75 laboratory staff and support personnel, estimated at
$26,500,000. No construction funds have been approved.
4. Southeast Regional Laboratory.--In fiscal year 1996, GSA issued
a sole source Solicitation for Offer to construct 42,000 net square
feet of lab and lab support space adjoining the current FDA complex at
8th and Peachtree Streets. The ground breaking ceremony occurred in
January 1997. Construction completion and FDA occupancy is expected by
December 1997.
5. Seattle Laboratory.--In fiscal year 1996, a 5,000 square feet
expansion project of the lab was completed.
ORA 21 Specialty Labs
6. Cincinnati.--National Forensics Chemistry Center and Cincinnati
District Office--The decommissioning of the current facility began in
1996. A prospectus was approved for 31,170 net square feet laboratory
space and 13,930 net square feet office space. Ground breaking occurred
in October 1996. Construction completion and FDA occupancy is scheduled
for late 1997 or early 1998.
7. Philadelphia.--GSA is proceeding to expand the U.S. Customhouse
facility in Philadelphia by 8,378 square feet and accommodate 16-20
additional laboratory staff. FDA occupancy of new space on floors 10
and 12 is expected by summer 1997.
8. San Juan.--FDA will renovate and expand the facility to house
20-25 total laboratory employees by the year 2000.
9. Winchester.--FDA building and facility funds were used to
establish an American Association for Accreditation of Laboratory
Animal Care, or AAALAC, facility. Design of additional AAALAC
facilities is under development and awaiting cost estimates.
Other Facility Activities
Decommissioning: Decommissioning schedules have been established
for each closing laboratory upon lease expiration. In fiscal year 1996,
FDA B&F funds totaling $2,600,000 were ear-marked for facilities
decommissioning activities at Buffalo, Cincinnati, Chicago, and New
Orleans. In fiscal year 1997, decommissioning activities are scheduled
for Baltimore, the Brooklyn complex in New York, and the Pico Blvd.
facility in Los Angeles. In fiscal year 1998, decommissioning
activities will commence for Dallas, Minneapolis and Detroit.
Personnel Activities: Voluntary transfers to other ORA labs:
In fiscal year 1995, 19 transfers at a cost of $910,000.
In fiscal year 1996, 9 transfers at a cost of $284,900.
In fiscal year 1997, the lateral transfer period has been extended
throughout the fiscal year; to date 16 have been approved at an
estimated cost of $525,000.
Total cost to date is $1,719,900.
Total transfers to date is 44.
Question. When will other field labs begin transferring operations
to the Arkansas Regional Lab?
Answer. Once the Chicago laboratory closes on July 1, 1997,
Chicago's dioxin program, 5 FTE, the high resolution mass spectrometer,
valued at $450,000, and, associated glassware and supplies will be
moved into an interim laboratory facility. The interim laboratory
facility is renovated space located in NCTR's Building 14. ORA plans to
start operations at the dioxin laboratory by late summer 1997. ARL is
anticipated to have 10-12 staff in Jefferson, Arkansas during 1997-
1999.
Other ORA personnel, programs and equipment are scheduled for
transfer upon their lease expiration dates. Laboratories in Detroit,
Minneapolis and Dallas will be transferred to ARL during 1999 and 2000,
and Denver and Kansas City during 2010-2014.
Question. When will transfer of all operations to the Arkansas
Regional Lab be complete?
Answer. The ORA Lab Consolidation Plan has scheduled full occupancy
and completion of all transfers to ARL by 2014.
The ARL facility has a capacity of approximately 140 operational
and support staff. Upon laboratory closures scheduled to take place by
2000, at Minneapolis, Detroit, Chicago and Dallas, approximately 55
operational FTE will be transferred to ARL. Additionally in between
2010 and 2014, upon lab closures in Denver and Kansas City,
approximately 85 additional operational FTE will be transferred to ARL.
Question. What are the projected savings of this consolidation
effort and what efficiencies will result?
Answer. FDA projects a costs savings of $112.7 million, through
2014, based on the fiscal year 1997 annual review and updated cost
estimates, namely rents and budget outlays toward laboratory
consolidation. FDA will maintain inspection, public affairs and
enforcement operations at the current District offices and resident
posts.
ARL is an integral part of the Laboratory Consolidation plan not
only from a programmatic efficiency standpoint but also because the
completion of ARL and closure of the six existing labs contributes
approximately 50 percent of the Lab Plan cost savings.
Let me provide for the record a statement made by the GAO about FDA
lab consolidation efforts to date:
[The information follows:]
``ORA has used the Southeast Regional Lab, SRL, located in Atlanta,
Georgia as the model of the future for the multipurpose/mega labs. SRL
services the southeastern United States from Louisiana to North
Carolina. This laboratory consistently meets time frames and has an
excellent rapport with its customers. More importantly, SRL has a large
enough cadre of scientists to conduct uninterrupted operations on a
day-to-day basis and meet emergency and other non-routine requests that
arise. It's this critical mass of experienced, equipped scientific
staff, housed in a state-of-the-art lab, which provides the wherewithal
to meet efficiency and effectiveness goals. Hence, the Lab
Consolidation Plan incorporates these essential elements to efficiency
at each of its planned mega-lab facilities.''
Similar efficiencies are expected from consolidation at ARL.
fiscal year 1998 initiatives
Question. The fiscal year 1998 budget contains a number of new
initiatives. One concerns tobacco. Another related to food safety. What
amount of the tobacco ``initiative'' will be used for normal
enforcement activities and please explain the items within this request
that are actually new activities for the agency.
Answer. The tobacco initiative is a new agency effort.
Implementation of the first provisions of the rule that went into
effect in February 1997 has been underway for some time. It is normal
for the Agency to train, commission, and contract with state and local
officials for the enforcement of FDA regulations. That is how the
tobacco rule will be enforced and, in that sense, the Agency considers
these to be ``normal enforcement activities.''
Question. What effect will the recent court decision regarding FDA
regulation of tobacco have on this initiative or similar activities at
FDA?
Answer. The February 28 access provisions have gone into effect and
the Agency will continue to implement and enforce those provisions. The
access and labeling provisions scheduled to go into effect this August
were upheld but stayed by the district court. The advertising and
promotion provisions scheduled to go into effect in August were
overturned by the district court. The parties have appealed.
Question. If full funding is not included for your Food Safety
initiative, will you be able to work with USDA, EPA, and CDC in a way
to blend all resources, government-wide, into this effort or do you
feel that FDA will not be a player to the extent of the other agencies?
Answer. FDA's fiscal year 1998 request provides adequate resources
to maintain our current level of activities that were funded in fiscal
year 1997. However, to go a step beyond our ``every day efforts'' to
reduce the risk to health that foodborne microorganisms pose to
consumers, we have requested additional funding for the Food Safety
Initiative, or FSI, which is an important extension of all ongoing food
safety efforts. Without this additional funding, we will not be able to
work toward the goal of reducing the incidence of foodborne illnesses.
Further, Seafood HACCP will be implemented at a much slower pace.
The federal food safety agencies will continue to respond to
problems once they are identified, until the goals of the Food Safety
Initiative are realized. The Food Safety Initiative will enable the
Agencies to develop systems with strategies and mechanisms to
anticipate and prevent most of the significant food safety problems. It
is clear that outbreaks such as hepatitis in frozen strawberries, E.
Coli in unpasteurized apple juice, and Cyclospora in raspberries, will
only increase in terms of frequency. The ability of the Federal
government, and in particular FDA's ability to prevent and respond to
these situations, will be greatly enhanced by this new funding. The
goal of the initiative is to reduce the incidence of deaths and
illnesses associated with foodborne pathogens.
______
Questions Submitted by Senator Harkin
safety of the blood supply
Question. I'm informed that prior to 1990 when blood was first
screened for Hepatitis C, an estimated 300,000 people annually were
infected with Hepatitis C from blood and blood products. While this has
now been reduced to about 180,000 a year, the continued prevalence and
increasing death rate from this disease merits attention. How has the
FDA followed up on the recommendation last year by the House Committee
on Government Reform and Oversight that the estimated 300,000 living
recipients of blood and blood products who were infected with Hepatitis
C prior to 1990 be notified of their potential infection so that they
might seek diagnosis and treatment?
Answer. An estimated 3.9 million Americans are infected with
Hepatitis C virus, or HCV. Seven percent, or about 300,000 people,
acquired their infection from blood transfusions received prior to
1990. The number of transfusion-associated Hepatitis C cases each year
has declined dramatically since the introduction of screening tests,
and CDC currently estimates the risk from blood to be between 0.01
percent and 0.001 percent, per unit transfused, or no more than 1,000
HCV infections from blood transfusions each year.
Transfusion-associated risk is only a small proportion of the
overall HCV infection burden in the United States. Most HCV infections
in the United States are acquired from other sources and 8,000 to
10,000 people die each year from HCV-associated chronic liver disease.
The issue of notification of recipients of blood products from
donors subsequently found to be infected with HCV, or look back
notification, has been publicly discussed at the Blood Products
Advisory Committee on several occasions.
In April 1997, the Department of Health and Human Services brought
this problem to the attention of the first meeting of the PHS Advisory
Committee on Blood Safety and Availability. This Committee includes
representatives of industry, consumers, scientific experts and
ethicists. Its purpose is to provide a forum to examine the broad
public health and societal implications of blood safety issues. The PHS
Advisory Committee provides advice to the Secretary of HHS. This issue
also has been considered by HHS's Blood Safety Committee which includes
the DHHS Blood Safety Director, the Director of NIH, the Director of
CDC, the Administrator of HCFA, and the Commissioner of Food and Drugs.
The Blood Safety Committee is involved in identifying issues for
discussion by the PHS Advisory Committee.
At its April 1997 meeting, the PHS Advisory Committee considered
the issue of HCV look back notification of recipients but did not issue
recommendations. Among the issues discussed at the Advisory Committee
meeting were the overall problem of HCV in our country; the patient's
right to know about possible infection; the difficulty of tracing blood
recipients; the utility of a targeted look back to certain populations
such as the hemophilia community; and other issues. The PHS Advisory
Committee indicated it would attempt to provide DHHS with
recommendations in a timely fashion. The FDA is awaiting the
recommendations from the PHS Advisory Committee on Blood Safety and
Availability.
Question. Has FDA developed guidelines or standards that blood
banks should use in notifying individuals of their exposure to
Hepatitis C through contaminated blood or blood products?
Answer. Most plasma derivatives undergo manufacturing or viral
inactivation procedures that will eliminate any HCV which may have come
from donors whose positive status was not detected by the current
screening tests. However, in some immune globulin products without
viral inactivation, there have been transmissions of Hepatitis C virus
in recent years. The FDA has acted in close concert with the CDC to
identify such events and manufacturers have initiated notifications to
alert individuals who received these blood products of their possible
exposure. These products are now either virally inactivated or else
tested for HCV by gene amplification and released for commercial
distribution only if found to be negative for HCV.
Transmission of HCV by blood component transfusion is more
complicated. At this time, the FDA has not developed guidelines or
standards to be used in notifying individuals of their exposure to
Hepatitis C through contaminated blood components. Although effective
donor screening has substantially reduced this risk since 1990, the
best approach to identifying persons who become infected by transfusion
both prior to and since 1990 remains undefined. This question has been
brought before the PHS Advisory Committee on Blood Safety and
Availability.
Options under consideration for recommendation by the Committee
include recipient tracing based on knowledge of a positive donor,
public health service announcements focusing on prior receipt of
transfusion, and physician education regarding disease prevention,
management and therapy. It is likely that some combination of these
approaches will be recommended.
The CDC already has begun implementing a broad nationwide
prevention and control plan for Hepatitis C. This program is aimed at
early identification of persons with chronic HCV infection, including
transfusion recipients, and reducing transmission in groups at high
risk of infection. Three approaches are being used to identify and
educate persons at risk of HCV infection: verbal, written, and visual
material directed to the public; educational efforts directed to health
care and public health professionals; and, development of community-
based prevention programs.
Conclusion of Hearings
Senator Cochran. Today's hearing concludes our review of
the budget request for the President's fiscal year 1998 budget.
The subcommittee will recess and reconvene at the call of
the Chair.
[Whereupon, at 11:50 a.m., Thursday, May 1, the hearings
were concluded and the subcommittee was recessed, to reconvene
subject to the call of the Chair.]
AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR
FISCAL YEAR 1998
----------
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
MATERIAL SUBMITTED BY AGENCIES NOT APPEARING FOR FORMAL HEARINGS
[Clerk's note.--The following agencies of the Department of
Agriculture and one related agency did not appear before the
subcommittee this year. Chairman Cochran requested these
agencies to submit testimony in support of their fiscal year
1998 budget request. Those statements follow:]
DEPARTMENT OF AGRICULTURE
National Appeals Division
Prepared Statement of Norman G. Cooper, Director
Mr. Chairman and members of the Subcommittee, I am pleased to
appear before you to discuss the fiscal year 1998 budget request for
the National Appeals Division--NAD.
mission
NAD was established by the Department of Agriculture Reorganization
Act of 1994, Public Law No. 103-354. The mission of NAD is to carry out
the provisions of that law in establishing an independent
administrative appeals process. NAD conducts evidentiary hearings and
reviews respecting adverse program decisions made by agencies of Rural
Development, the Natural Resources Conservation Service, the Risk
Management Agency, and the Farm Service Agency.
Program participants--appellants--have the right to appeal adverse
decisions and to have a hearing before an NAD hearing officer in their
State of residence. Once a hearing officer makes a determination, the
appellant or the affected agency head may request a review of the
hearing officer's determination by the NAD Director. NAD's final
determinations are reviewable by United States District Courts.
NAD is headquartered in Alexandria, Virginia, with a small review
and support staff, with three regional offices responsible for the
activities of more than 70 hearing officers in three geographic areas:
Eastern--Indianapolis, Indiana; Southern--Memphis, Tennessee; and
Western--Lakewood, Colorado.
current activities
Recent accomplishments include:
--NAD conducted a national training conference in fiscal year 1996,
and in fiscal year 1997 is conducting training conferences at
three regional sites and at headquarters. These conferences
provide development opportunities to ensure that NAD personnel
are kept current of Administrative proceedings, current laws
and regulations in the program areas that are subject to NAD
jurisdiction. In addition, training is provided in standards of
review, evidentiary considerations and judicial issues, ethics,
and EEO.
--In accordance with the Government Performance and Results Act, NAD
has drafted its 5-year Strategic Plan and 1997 Annual
Performance Plan.
--NAD interim final rules imposed a reconsideration requirement for
Director Review Determinations, and NAD has developed a
procedure for such reconsideration. Reconsideration of a
determination of the Director may be requested by the appellant
or the Agency within 10 days of receipt of the determination.
The Director has 5 days to issue a decision on the request for
reconsideration.
--An NAD directives system and a Hearing Officer Manual have been
developed to provide a systematic method of communicating
information and policy to the headquarters and field office
personnel.
--A Civil Rights and Equal Employment Opportunity Advisory Committee
consisting of representative employees from headquarters and
the field offices was established to advise and help the
Director.
--NAD has initiated a quality assurance program designed to enhance
quality of decisions, advance the rights of program
participants, and promote the lawful operation of agency
programs.
--During fiscal year 1996, there were 6,137 appeals requested and
1,263 Director Reviews. Of the 1,263 Director Reviews, 1,006
were requested by appellants and 257 were requested by heads of
agencies. Additionally, 54 requests for reconsideration were
received.
fiscal year 1998 budget request
For fiscal year 1998, NAD is requesting $13,359,000 in direct
appropriations. This request represents an increase of $1,641,000 over
the fiscal year 1997 appropriation. The increase consists of $143,000
for pay costs, and the remaining $1,498,000 will fund four initiatives.
The first initiative will enable NAD to replace the tracking system
that now track appeals only for former Farmers Home Administration's
cases. The current system cannot accommodate cases from other agencies
that are now appealed to NAD. For example, if information on an appeal
pertaining to a disaster program is requested, it must be obtained by a
manual search, which is costly and time consuming. This limits our
ability to provide Congress, USDA, and other interested parties,
accurate and timely information regarding appeals handled by NAD, as
well as to make informed management decisions. NAD needs to develop and
procure a new tracking system to meet these requirements.
The second initiative provides necessary training to NAD hearing
officers and review staff, as well as other employees. They must keep
abreast of current laws and regulations, administrative procedures, and
automation. To ensure fair and impartial determinations based upon
correct application of laws and regulations, and guarantee the rights
of program participants and the efficient operation of agency programs,
hearing officers, in particular, must be trained in the proper methods
of fact finding, hearing procedures, and application and analysis of
regulatory authority. The NAD staff is dispersed across the country,
and the development of a standard curriculum to include a minimum
number of quasi-judicial courses to be completed within specific time
frames would ensure a standard level of competency is reached and
maintained.
With proper training, hearing and review officers will be able to
render competent determinations based upon a required level of
knowledge. In addition, they will be supported in rendering timely,
complete, and correct determinations with assistance from NAD personnel
with extensive knowledge of computer systems that support the hearing
and review officers in affecting NAD's goal of timely, complete, and
correct determinations.
The third initiative will fund the development of an automated
system to provide hearing officers and the review staff electronic
access to previous NAD decisions. This system will establish a
mechanism that will be used by all NAD hearing and review officers to
ensure consistency in NAD determinations, and it will supplement an NAD
directive system that provides guidance on policy and law.
The fourth initiative provides for the enhancement of new computer
equipment to ensure NAD employees are able to provide quality internal
and external customer service in an efficient manner. Because of the
geographically dispersed nature of NAD operations and its customer
base, efficient and reliable data communications capabilities are
critical to achieve quality, timeliness, and completeness goals.
We urge the Committee to approve these initiatives in the interest
of improving the services that we provide to our stakeholders. NAD's
primary stakeholders include: four statutorily-defined client
agencies--Farm Service Agency, Rural Development, Natural Resources
Conservation Service, Risk Management Agency; potential appellants--
including all participants in programs administered by NAD's four
client agencies and applicants for such programs, and advocacy groups
that represent appellants.
NAD has streamlined its organizational structure effectively and
efficiently to carry out its statutory mandate. To sustain its mission
in delivery of high quality adjudication administrative appeals and
reviews, NAD requires the appropriation requested.
This concludes my statement Mr. Chairman. I will be happy to answer
any questions that the Subcommittee might have.
______
Office of the Chief Economist
Prepared Statement of Keith Collins, Chief Economist
This statement discusses the functions and fiscal year 1998 budget
request of the Office of the Chief Economist.
OCE is a small staff of economists, scientists, meteorologists and
support personnel all located in Washington, D.C. The Office reports
directly to the Secretary of Agriculture. OCE has three primary
missions: 1) provide economic analysis to executive branch and
Congressional policy officials on alternative policies, programs and
regulations; 2) serve as a focal point for the collection and reporting
of economic and weather data, forecasts and projections related to
agricultural commodities and the performance of the agricultural
economy; and 3) conduct statutory review and oversight responsibilities
related to risk assessment and cost-benefit analysis of major USDA
regulations. OCE consists of three functional units: the Immediate
Office, the World Agricultural Outlook Board--WAOB, and the Office of
Risk Assessment and Cost-Benefit Analysis--ORACBA. Recent activities
and accomplishments in each of these three areas are briefly discussed.
immediate office of the chief economist
The immediate office, with a staff of nine, directs a wide range of
analysis related to policy, program and legislative proposals, and
regulations. The focus is on only the most substantial, complex and
controversial issues, usually at the request of the Secretary, other
Administration officials, or members of Congress. The most important
products are briefings, and briefing and analysis papers prepared on
tight deadlines. These analyses generally focus on short-to medium-term
effects, involve staff from other agencies, and apply the results of
existing, basic economic research to specific policy issues. The
immediate office staff is also responsible for regulatory review. A key
role of the staff is to coordinate analyses among USDA agencies. OCE
staff include the directors responsible for coordinating agricultural
labor issues and sustainable development issues within USDA. Examples
of key activities are:
Farm Bill Implementation.--Since passage of the 1996 Farm Bill, the
staff of the Immediate Office has had a series of key implementation
responsibilities. OCE coordinated analysis of, and the decision process
for, the Secretary's decision to implement the Northeast Interstate
Dairy Compact. OCE briefed the President's Chief of Staff twice on this
issue and several members of Congress as well. OCE coordinated, with
the Assistant Secretary for Marketing and Regulation, a review of the
performance of the National Cheese Exchange--NCE--and analysis of
options to replace the use of the NCE price in Federal Milk Marketing
Orders. OCE also chaired USDA's Interagency Dairy Analysis Team which
served as the reviewer for the concept proposals prepared by the
Agricultural Marketing Service for Federal Milk Marketing Order
consolidation and reform. OCE reviews resulted in material changes to
the options released to the public for comment. OCE is also
participating in the preparation of the economic analysis for the
planned proposed rule on order consolidation and reform. OCE also
served on numerous decision teams for the Secretary to resolve issues
related to farm and conservation program implementation.
Commodity Market Analyses.--During the 1996/97 crop years, prices
of wheat, corn and milk reached record highs. In the spring of 1996,
cattle prices reached a 10-year low. OCE provided the Secretary regular
briefings on the developments in commodity markets during this period.
OCE coordinated development of the President's initiative to support
beef prices, announced in April 1996, and participated in the briefing
of the President. OCE coordinated the Secretary's initiative to
stabilize milk prices, announced in December 1996, after the
unprecedented decline in the Basic Formula Price.
Concentration.--OCE played a major role in the Department's efforts
to understand and address issues of concentration in agriculture. OCE
provided staff support to the Secretary's Advisory Committee on
Concentration in Agriculture and co-chaired the Department's Response
Team which reviewed the report and developed responses to its
recommendations. The Team's efforts resulted in a number of
programmatic changes in the collection and dissemination of market
information.
Karnal Bunt Compensation.--OCE assisted Animal and Plant Health
Inspection Service--APHIS--in establishing a compensation scheme for
producers, handlers and others adversely affected by the Federal
quarantine established for the eradication of Karnal Bunt. Activities
included directing analyses of the effects of the quarantine on the
wheat industry and developing compensation plans for producers,
handlers, and flour millers.
Crop and Revenue Insurance Evaluation.--OCE assisted the Risk
Management Agency--RMA--in evaluating the rating structure and
reinsurance implications of revenue insurance. In cooperation with
researchers at The Ohio State University and the Economic Research
Service, a model was developed to evaluate the performance of the 1996
reinsurance agreement and to assist RMA in negotiating the 1998
Standard Reinsurance Agreement with crop insurance companies.
Testimony and Congressional Analyses.--During the past year, the
staff responded to many Congressional requests for information or
analysis. During fiscal year 1996 and early fiscal year 1997, OCE
testified before Congress as the principal USDA hearing witness five
times. Testimony was provided on the following issues: the effects of
immigration reform on farm employers; risk assessment at USDA;
allegations of price manipulation on the National Cheese; renewable
fuels and energy security; estate and capital gains taxes. In addition,
the Chief Economist frequently appeared before Congress with the
Secretary, Deputy Secretary or others on issues ranging from the USDA
budget, the Conservation Reserve Program--CRP, concentration,
international trade to dairy policy.
Special Studies.--OCE has coordinated a number of special studies
bringing together analysts from various USDA agencies to ensure the
best expertise addresses the issue. For example, OCE coordinated the
Department's response to the Environmental Protection Agency's--EPA's--
proposed rule on particulate matter and ozone, and OCE has participated
in executive branch analysis of the effects of global climate change.
OCE chairs the Capper-Volstead Committee which responded to requests
related to permissible activities of cooperatives. OCE responded to
many requests for rapid analysis of issues such as the effects of the
Florida freeze; the relationship between price volatility and commodity
stocks policy; using cost of production to establish the Basic Formula
Price for milk; economic effects of U.S. grain imports from Canada;
effects of proposed changes in the Commodity Exchange Act; implications
of foot and mouth disease in Taiwan for U.S. pork exports to Japan and
for U.S. producers; U.S.-EU grain and oilseed Uruguay Round concerns;
North American Free Trade Agreement; and regionalization of plant and
animal health regulations. OCE participates in the USDA working group
on the 1999 World Trade Organization agricultural negotiations
including preparation of analysis of U.S. objectives and approaches.
OCE also provides staff support to the Secretary's Special Assistant
for Trade.
Regulatory Review and Clearance.--A major responsibility of the
immediate office staff is to review and clear regulatory impact
analyses of USDA regulations. During fiscal year 1996, OCE reviewed and
cleared approximately 70 significant or economically significant
regulations. This process often involves assisting the regulating
agency with identification of feasible alternatives and planning the
economic analysis. Examples of special rulemaking efforts this past
year included the Conservation Reserve Program, the Environmental
Quality Incentives Program, the Wildlife Habitat Incentives Program,
avocado imports, and organic certification.
Agricultural Labor.--OCE fulfills the statutory mandate to consult
with the Department of Labor--DOL--on regulations related to the H-2A
Temporary Agricultural Worker Program. A major effort this past year
involved working with DOL on a final rule issued in 1997 establishing
the conditions under which a farm employer would be jointly responsible
for actions of a farm labor contractor. Other key activities included
rulemaking support to EPA through analysis of pesticide protections for
farm workers, such as warning sign posting, decontamination sites, and
analysis of immigration reform on USDA programs and on farm employment.
Sustainable Development.--OCE advises the State Department, Foreign
Agricultural Service--FAS, and others of sustainable development issues
for negotiations, treaty formulation and implementation, and trade
discussions. For exam